AMERITECH CORP /DE/
S-3, 1995-06-08
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
Previous: NYNEX CORP, 8-K, 1995-06-08
Next: CAPITAL GROUP COMPANIES INC, SC 13G/A, 1995-06-08



<PAGE>
 
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 8, 1995
 
                                                      REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ----------------
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                               ----------------
         AMERITECH CORPORATION                     AMERITECH CAPITAL
                                                  FUNDING CORPORATION
           (EXACT NAME OF REGISTRANTS AS SPECIFIED IN THEIR CHARTERS)
                DELAWARE                                DELAWARE
    (STATE OR OTHER JURISDICTION OF         (STATE OR OTHER JURISDICTION OF
     INCORPORATION OR ORGANIZATION)          INCORPORATION OR ORGANIZATION)
               36-3251481                              36-3675771
  (I.R.S. EMPLOYER IDENTIFICATION NO.)    (I.R.S. EMPLOYER IDENTIFICATION NO.)
                                                 THOMAS P. HESTER, ESQ.
         30 SOUTH WACKER DRIVE                   AMERITECH CORPORATION
        CHICAGO, ILLINOIS 60606                  30 SOUTH WACKER DRIVE
             (312) 750-5000                     CHICAGO, ILLINOIS 60606
   (ADDRESS, INCLUDING ZIP CODE, AND                 (312) 750-5000
      TELEPHONE NUMBER, INCLUDING       (NAME, ADDRESS, INCLUDING ZIP CODE, AND
    AREA CODE, OF BOTH REGISTRANTS'      TELEPHONE NUMBER, INCLUDING AREA CODE,
      PRINCIPAL EXECUTIVE OFFICES)           OF AGENT FOR SERVICE FOR BOTH
                                                      REGISTRANTS)
                               ----------------
                  PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
         SUSAN E. CREMIN, ESQ.                   ROBERT E. CURLEY, ESQ.
            WINSTON & STRAWN                      EDWARD S. BEST, ESQ.
          35 WEST WACKER DRIVE                    MAYER, BROWN & PLATT
        CHICAGO, ILLINOIS 60601                 190 SOUTH LASALLE STREET
                                                CHICAGO, ILLINOIS 60603
                               ----------------
  APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of the Registration Statement, as determined by
market conditions.
                               ----------------
  If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
  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. [X]
 
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
 
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
 
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
                        CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                       PROPOSED
                                                        PROPOSED       MAXIMUM
                                                        MAXIMUM       AGGREGATE      AMOUNT OF
     TITLE OF EACH CLASS OF         AMOUNT TO BE     OFFERING PRICE    OFFERING     REGISTRATION
  SECURITIES TO BE REGISTERED        REGISTERED       PER UNIT(1)      PRICE(1)         FEE
- ------------------------------------------------------------------------------------------------
<S>                               <C>                <C>            <C>            <C>
Debt Securities--to be issued by
 Ameritech Capital Funding Cor-
 poration.......................   $1,000,000,000(2)      100%      $1,000,000,000    $344,830
Guarantees of the Debt Securi-
 ties by Ameritech Corporation..                                                        (3)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee.
(2) The aggregate principal amount of the Debt Securities to be issued may be
    increased, if any Debt Securities are issued at an original issue discount,
    by an amount such that the net proceeds to be received by Ameritech Capital
    Funding Corporation shall be equal to the above amount to be registered.
    Any offering of Debt Securities denominated other than in U.S. dollars will
    be treated as the equivalent in U.S. dollars based on the exchange rate
    applicable to the purchase of such Debt Securities from Ameritech Capital
    Funding Corporation.
(3) Pursuant to Rule 457(n), no fee is payable with respect to the Guarantees.
  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 SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
 
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A         +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE   +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY  +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT        +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR   +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE      +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE    +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF  +
+ANY SUCH STATE.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
 
                   SUBJECT TO COMPLETION, DATED JUNE 8, 1995
 
                     AMERITECH CAPITAL FUNDING CORPORATION
 
                                DEBT SECURITIES
 
             UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL,
                        PREMIUM, IF ANY, AND INTEREST BY
 
                             AMERITECH CORPORATION
                                  -----------
 
  Ameritech Capital Funding Corporation ("Capital Funding") from time to time
may offer its unsecured notes, debentures, or other debt securities (the "Debt
Securities"), in one or more series, in an aggregate principal amount
sufficient to result in net proceeds to Capital Funding of up to U.S.
$1,000,000,000 (or its equivalent in foreign denominated currencies or European
Currency Units or other composite currencies). Debt Securities may be issued in
registered form without coupons ("Registered Securities"), bearer form with or
without coupons attached ("Bearer Securities") or in the form of one or more
global securities (each a "Global Security"). All Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest (the "Guarantees") by Ameritech Corporation ("Ameritech").
 
  When a particular series of Debt Securities is offered, a supplement to this
Prospectus will be delivered (the "Prospectus Supplement") together with this
Prospectus setting forth the terms of such Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, currency or
currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate (which may be fixed or variable) and time of
payment of interest, any terms for redemption, any terms for repayment at the
option of the holder, any terms for sinking fund payments, the initial public
offering price, the names of, and the principal amounts to be purchased by or
sold through, underwriters, agents or dealers and the compensation of such
underwriters, agents or dealers, any listing of the Debt Securities on a
securities exchange and other terms or information in connection with the
offering and sale of such Debt Securities.
 
  Capital Funding may sell the Debt Securities to or through dealers or
underwriters, directly to other purchasers or through agents. If an agent of
Capital Funding or a dealer or an underwriter is involved in the sale of the
Debt Securities in respect of which this Prospectus is being delivered, the
agent's commission or dealer's or underwriter's discount will be set forth in,
or may be calculated from, the Prospectus Supplement. The net proceeds to
Capital Funding from such sale, which will be set forth in the Prospectus
Supplement, will be the purchase price of such Debt Securities less such
commission in the case of an agent, the purchase price of such Debt Securities
in the case of a dealer or the public offering price less such discount in the
case of an underwriter, and less, in each case, the other attributable issuance
expenses. See "Plan of Distribution" for possible indemnification arrangements
for any agents, dealers or underwriters.
 
  This Prospectus may not be used to consummate sales of Debt Securities unless
accompanied by the Prospectus Supplement applicable to the Debt Securities
being sold.
                                  -----------
 
  THESE   SECURITIES  HAVE  NOT  BEEN  APPROVED   OR
   DISAPPROVED  BY  THE   SECURITIES  AND  EXCHANGE
    COMMISSION OR ANY  STATE SECURITIES COMMISSION
     NOR   HAS   THE  SECURITIES   AND   EXCHANGE
      COMMISSION   OR   ANY   STATE    SECURITIES
      COMMISSION  PASSED  UPON THE  ACCURACY  OR
       ADEQUACY   OF   THIS   PROSPECTUS.   ANY
        REPRESENATION  TO  THE CONTRARY  IS  A
         CRIMINAL OFFENSE.
 
                                  -----------
 
                 The date of this Prospectus is         , 1995.
<PAGE>
 
  IN CONNECTION WITH ANY OFFERING OF DEBT SECURITIES, UNDERWRITERS OR AGENTS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF THE DEBT SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
 
                             AVAILABLE INFORMATION
 
  Ameritech is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Ameritech may be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
Commission's Regional Offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and at Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials can be
obtained by mail from the Public Reference Branch of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such material
may also be inspected and copied at the offices of the New York, Boston,
Chicago, Philadelphia and Pacific Stock Exchanges, on each of which exchanges
certain of Ameritech's securities are listed.
 
  Ameritech and Capital Funding have filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
 
  The Commission's Office of Chief Counsel, Division of Corporate Finance, has
indicated to Capital Funding that, in connection with the issuance of the Debt
Securities, it will not raise any objection if Capital Funding does not file
periodic reports pursuant to Sections 13(a) and 15(d) of the Exchange Act.
Accordingly, Capital Funding will not file such periodic reports.
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
  The following documents filed by Ameritech with the Commission (File No. 1-
8612) are incorporated herein by reference:
 
    1. Ameritech's Annual Report on Form 10-K for the fiscal year ended
  December 31, 1994.
 
    2. Ameritech's Quarterly Report on Form 10-Q for the quarter ended March
  31, 1995.
 
    3. Ameritech's Current Reports on Form 8-K dated January 18, 1995, March
  28, 1995 and April 19, 1995.
 
  All documents filed by Ameritech pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents.
 
  Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
 
  Ameritech and Capital Funding will provide without charge to each person,
including any beneficial owner, to whom a Prospectus is delivered, upon written
or oral request of such person, a copy of any
 
                                       2
<PAGE>
 
or all of the documents which are incorporated by reference herein, other than
exhibits to such documents which are not specifically incorporated by reference
therein. Requests should be directed to the Director of Investor Relations,
Ameritech Corporation, 30 South Wacker Drive, Chicago, Illinois 60606
(telephone number (312) 750-5000).
 
                             AMERITECH CORPORATION
 
  Ameritech, a holding company incorporated in 1983 under the laws of the State
of Delaware, has its principal executive offices at 30 South Wacker Drive,
Chicago, Illinois 60606 (telephone number (312) 750-5000). Ameritech is a
leading global supplier of full-service communications services and advanced
information services.
 
                     AMERITECH CAPITAL FUNDING CORPORATION
 
  Capital Funding was established to provide financing to Ameritech and to the
direct and indirect subsidiaries of Ameritech. Capital Funding may raise funds
through the offering of Debt Securities in the United States, Europe, and other
overseas markets and will lend the net proceeds to Ameritech or one or more
subsidiaries of Ameritech. Capital Funding does not and will not engage in any
separate business activities. All of the Debt Securities will be
unconditionally guaranteed as to payment of principal, premium, if any, and
interest by Ameritech.
 
  Capital Funding was incorporated under the laws of the State of Delaware in
May, 1989 and is a wholly owned subsidiary of Ameritech. Capital Funding became
a close corporation under Delaware law effective January 1, 1990. The principal
executive offices of Capital Funding are located at 30 South Wacker Drive,
Chicago, Illinois 60606 (telephone number (312) 750-5000).
 
                RATIO OF EARNINGS TO FIXED CHARGES OF AMERITECH
 
  The following table sets forth the ratio of earnings to fixed charges of
Ameritech for the periods indicated.
 
<TABLE>
<CAPTION>
      THREE MONTHS ENDED
          MARCH 31,                           YEAR ENDED DECEMBER 31,
      --------------------          ---------------------------------------------------------------------
       1995         1994            1994           1993           1992           1991           1990
      ------       ------           ----           ----           ----           ----           ----
      <S>          <C>              <C>            <C>            <C>            <C>            <C>
        8.73         1.63           4.45           5.25           4.52           3.63           4.37
</TABLE>
 
  For the purpose of calculating this ratio, earnings consist of income before
income and related taxes, fixed charges, extraordinary items and the cumulative
effect of change in accounting principles. Fixed charges are primarily
consolidated interest cost and the estimated interest component of rental
expense. Earnings for the first quarter of 1995 reflect a $256.3 million pretax
credit primarily from settlement gains resulting from lump-sum pension payments
from the Ameritech Pension Plan to former employees associated with a
nonmanagement work force restructuring. Earnings for the first quarter of 1994
reflect a $530.0 million pretax charge associated with the nonmanagement work
force restructuring. Costs of the work force restructuring program have largely
been funded from the Ameritech Pension Plan.
 
                                USE OF PROCEEDS
 
  The net proceeds from the sale of the Debt Securities will be used to provide
funds for Ameritech and subsidiaries of Ameritech.
 
  Capital Funding will invest in or loan to Ameritech or one or more of the
subsidiaries of Ameritech at least 85% of the cash raised by Capital Funding
hereunder as soon as practicable after receipt, but in no event later than six
months after Capital Funding receives such cash. In the interim, Capital
Funding will invest any funds held by it only in securities permitted by Rule
3a-5(a)(6) of the Commission under the Investment Company Act of 1940, as
amended.
 
 
                                       3
<PAGE>
 
                 DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
 
  The following description sets forth certain general terms and provisions of
the Debt Securities and Guarantees to which any Prospectus Supplement may
relate. The particular terms and provisions of the series of Debt Securities
offered by a Prospectus Supplement (the "Offered Debt Securities"), and the
extent to which such general terms and provisions described below may apply
thereto, will be described in the Prospectus Supplement relating to such
Offered Debt Securities.
 
  The Debt Securities are to be issued under an Indenture dated as of
  , 1995 (the "Indenture"), among Ameritech, Capital Funding and Harris Trust
and Savings Bank, as trustee (the "Trustee"), a form of which is incorporated
by reference as an exhibit to the Registration Statement of which this
Prospectus is a part.
 
  The following summaries of certain provisions of the Debt Securities, the
Guarantees and the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the Debt
Securities, the Guarantees and the Indenture, including the definitions therein
of capitalized terms which are used but are not defined herein. All section
references used herein are to sections in the Indenture.
 
GENERAL
 
  The Indenture does not limit the amount of Debt Securities that may be issued
thereunder and provides that Debt Securities may be issued thereunder from time
to time in one or more series. (Section 301). The Indenture does not limit the
amount of other indebtedness or securities which may be issued by Capital
Funding.
 
  Each series of Debt Securities will constitute unsecured and unsubordinated
indebtedness of Capital Funding, will rank on a parity with Capital Funding's
other unsecured and unsubordinated indebtedness and will have the benefit of
the Guarantees described below.
 
  The Indenture does not contain covenants or other provisions designed to
afford Holders (as defined in the Indenture) of the Debt Securities protection
in the event of a highly leveraged transaction, change in credit rating or
other similar occurrence.
 
  Reference is made to the Prospectus Supplement relating to the particular
Offered Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title of the Offered Debt Securities or the particular
series thereof; (ii) any limit on the aggregate principal amount of the Offered
Debt Securities; (iii) whether the Offered Debt Securities are to be issuable
as Registered Securities or Bearer Securities or both, whether any of the
Offered Debt Securities are to be issuable initially in temporary global form
and whether any of the Offered Debt Securities are to be issuable in permanent
global form; (iv) the price or prices (generally expressed as a percentage of
the aggregate principal amount thereof) at which the Offered Debt Securities
will be issued; (v) the date or dates on which the Offered Debt Securities will
mature; (vi) the rate or rates per annum, or the formula by which such rate or
rates shall be determined, at which the Offered Debt Securities will bear
interest, if any, and the dates from which any such interest will accrue; (vii)
the Interest Payment Dates on which any such interest on the Offered Debt
Securities will be payable, the Regular Record Date for any interest payable on
any Offered Debt Securities that are Registered Securities on any Interest
Payment Date and the extent to which, or the manner in which, any interest
payable on a Security issued in global form (a "Global Security") on an
Interest Payment Date will be paid if other than in the manner described below
under "Global Securities"; (viii) any mandatory or optional sinking fund or
analogous provisions; (ix) each office or agency where, subject to the terms of
the Indenture as described below under "Payments and Paying Agents", the
principal of and any premium and interest on the Offered Debt Securities will
be payable and each office or agency where, subject to the terms of the
Indenture as described below under
 
                                       4
<PAGE>
 
"Denominations, Registration and Transfer", the Offered Debt Securities may be
presented for registration of transfer or exchange; (x) the date, if any, after
which and the price or prices at which the Offered Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and provisions of any such
optional or mandatory redemption provisions; (xi) the date, if any, after which
and the price or prices at which the Offered Debt Securities will be repayable
at the option of the holder thereof prior to maturity; (xii) the denominations
in which any Offered Debt Securities which are Registered Securities will be
issuable, if other than denominations of U.S. $1,000 and any integral multiple
thereof, and the denominations in which any Offered Debt Securities which are
Bearer Securities will be issuable, if other than denominations of U.S. $5,000;
(xiii) the currency or currencies of payment of principal of and any premium
and interest on the Offered Debt Securities; (xiv) any index used to determine
the amount of payments of principal of and any premium and interest on the
Offered Debt Securities; (xv) any additional covenants applicable to the
Offered Debt Securities; and (xvi) any other terms and provisions of the
Offered Debt Securities not inconsistent with the terms and provisions of the
Indenture. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Offered
Debt Securities. (Section 301).
 
  If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
 
  Some of the Debt Securities may be issued as original issue discount
securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Federal income tax considerations and other
special considerations applicable to original issue discount securities will be
set forth in the applicable Prospectus Supplement.
 
GUARANTEES
 
  Ameritech will unconditionally guarantee the due and punctual payment of the
principal, premium, if any, and interest on the Debt Securities when and as the
same shall become due and payable, whether at maturity, upon redemption, or
otherwise. (Sections 311 and 312). The Guarantees will rank equally with all
other unsecured and unsubordinated obligations of Ameritech. Since Ameritech is
a holding company, the right of Ameritech and, hence, the right of creditors of
Ameritech (including the holders of the Debt Securities) to participate in any
distribution of the assets of any subsidiary of Ameritech, whether upon
liquidation, reorganization, or otherwise, is subject to prior claims of
creditors of each such subsidiary, except to the extent that claims of
Ameritech itself as a creditor of a subsidiary may be allowed. The right of
creditors of Ameritech (including the holders of the Debt Securities) to
participate in the distribution of the stock owned by Ameritech in certain
subsidiaries of Ameritech, including the Ameritech land-line telephone
companies, may also be subject to approval by certain state and federal
regulatory authorities having jurisdiction over such subsidiaries.
 
DENOMINATIONS, REGISTRATION AND TRANSFER
 
  The Debt Securities will be issuable as Registered Securities, Bearer
Securities or both. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Global Securities". Unless
otherwise provided in the applicable Prospectus Supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in the denomination of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal
 
                                       5
<PAGE>
 
to the aggregate principal amount of outstanding Debt Securities represented by
such Global Security. The Prospectus Supplement relating to Debt Securities
denominated in a foreign or composite currency will specify the denominations
thereof. (Sections 201, 203, 301 and 302).
 
  In connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States (as defined below
under "Certain Limitations on Issuance of Bearer Securities") and a Bearer
Security may be delivered in connection with its original issuance only if the
person entitled to receive such Bearer Security furnishes written
certification, in the form required by the Indenture, to the effect that such
Bearer Security is not being acquired by or on behalf of a United States person
(as defined below under "Certain Limitations on Issuance of Bearer
Securities"), or, if a beneficial interest in such Bearer Security is being
acquired by or on behalf of a United States person, that such United States
person is a financial institution which agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder. (Sections 303
and 304). See "Global Securities" and "Certain Limitations on Issuance of
Bearer Securities" below.
 
  Registered Securities of any series will be exchangeable for other Registered
Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations. In addition, if Debt Securities of
any series are issuable as both Registered Securities and as Bearer Securities,
at the option of the holder upon request confirmed in writing, and subject to
the terms of the Indenture, Bearer Securities (with all unmatured coupons,
except as provided below, and all matured coupons in default attached) of such
series will be exchangeable for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Unless otherwise indicated in an applicable Prospectus Supplement, any Bearer
Security surrendered in exchange for a Registered Security between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest shall be surrendered without the coupon relating to such date for
payment of interest attached and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the terms
of the Indenture. Except as provided in an applicable Prospectus Supplement,
Bearer Securities will not be issued in exchange for Registered Securities.
(Section 305).
 
  Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar designated by Capital Funding or at the office
of any transfer agent designated by Capital Funding for such purpose with
respect to any series of Debt Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent,
as the case may be, being satisfied with the documents of title and identity of
the person making the request. Capital Funding has initially appointed the
Trustee as the Security Registrar under the Indenture. (Section 305). If a
Prospectus Supplement refers to any transfer agent (in addition to the Security
Registrar) initially designated by Capital Funding with respect to any series
of Debt Securities, Capital Funding may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that, if Debt Securities of a series are
issuable only as Registered Securities, Capital Funding will be required to
maintain a transfer agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, Capital Funding will
be required to maintain (in addition to the Security Registrar) a transfer
agent in a Place of Payment for such series located outside the United States.
Capital Funding may at any time designate additional transfer agents with
respect to any series of Debt Securities. (Section 1002).
 
  In the event of any redemption in part, Capital Funding shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of
 
                                       6
<PAGE>
 
business 15 days before any selection of Debt Securities of that series to be
redeemed and ending at the close of business on (a) if Debt Securities of the
series are issuable only as Registered Securities, the day of mailing of the
relevant notice of redemption or (b) if Debt Securities of the series are
issuable only as Bearer Securities, the day of the first publication of the
relevant notice of redemption or, if Debt Securities of that series are also
issuable as Registered Securities and there is no publication, the mailing of
the relevant notice of redemption; (ii) register the transfer of or exchange
any Registered Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or (iii)
exchange any Bearer Security called for redemption, except that such a Bearer
Security may be exchanged for a Registered Security of that series and like
tenor, provided that such Registered Security is immediately surrendered for
redemption. (Section 305).
 
PAYMENTS AND PAYING AGENTS
 
  Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Registered Securities (other than
a Global Security) will be made at the office of such Paying Agent or Paying
Agents as Capital Funding may designate from time to time, except that, at the
option of Capital Funding, payment of any interest may be made (i) by check
mailed to the address of the payee entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by such payee as specified in the Security Register. (Sections 305,
307 and 1002). Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Registered Securities
will be made to the person in whose name such Registered Security is registered
at the close of business on the Regular Record Date for such interest payment.
(Section 307).
 
  Unless otherwise indicated in an applicable Prospectus Supplement, payment of
principal of and any premium and interest on Bearer Securities will be payable
(subject to applicable laws and regulations) at the offices of such Paying
Agent or Paying Agents outside the United States as Capital Funding may
designate from time to time, except that, at the option of Capital Funding,
payment of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. (Sections 307 and 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date.
(Section 1001). No payment with respect to any Bearer Security will be made at
any office or agency of Capital Funding in the United States or by check mailed
to any address in the United States or by transfer to an account maintained in
the United States. Payments will not be made in respect of Bearer Securities or
coupons appertaining thereto pursuant to presentation to Capital Funding or its
Paying Agents within the United States or any other demand for payment to
Capital Funding or its Paying Agents within the United States. Notwithstanding
the foregoing, payment of principal of and any premium and interest on Bearer
Securities denominated and payable in U.S. dollars will be made at the office
of Capital Funding's Paying Agent in the United States if, and only if, payment
of the full amount thereof in U.S. dollars at all offices or agencies outside
the United States is illegal or effectively precluded by exchange controls or
other similar restrictions. (Section 1002).
 
  Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will serve as Paying Agent and the principal office of the Trustee in
Chicago, Illinois will be designated as Capital Funding's Paying Agent office
for payments with respect to Debt Securities which are issuable solely as
Registered Securities. Any Paying Agent outside the United States and any other
Paying Agent in the United States initially designated by Capital Funding for
the Debt Securities will be named in the applicable Prospectus Supplement.
Capital Funding may at any time designate additional Paying Agents or rescind
the designation of any Paying Agent or approve a change in the office through
which any Paying Agent acts, except that, if Debt Securities of a series are
issuable only as Registered Securities, Capital Funding will be required to
maintain a Paying Agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, Capital Funding will
be required to
 
                                       7
<PAGE>
 
maintain (i) a Paying Agent in each Place of Payment for such series in the
United States for payments with respect to any Registered Securities of such
series (and for payments with respect to Bearer Securities of such series in
the circumstances described above, but not otherwise), (ii) a Paying Agent in
each Place of Payment located outside the United States where (subject to
applicable laws and regulations) Debt Securities of such series and any coupons
appertaining thereto may be presented and surrendered for payment; provided
that if the Debt Securities of such series are listed on The International
Stock Exchange, London or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, Capital Funding will maintain a Paying Agent in London or Luxembourg
City or any other required city located outside the United States, as the case
may be, for Debt Securities of such series, and (iii) a Paying Agent in each
Place of Payment located outside the United States where (subject to applicable
laws and regulations) Registered Securities of such series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon Capital Funding may be served. (Section 1002).
 
  All moneys paid by Capital Funding to a Paying Agent for the payment of
principal of and any premium and interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to Capital Funding and
thereafter the holder of such Debt Security or any coupon appertaining thereto
will look only to Capital Funding for payment thereof. (Section 1003).
 
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 will be deposited with, or on behalf of,
a depositary identified in the applicable Prospectus Supplement (the
"Depository"). Global Securities may be issued in either registered or bearer
form and in either temporary or permanent form. (Section 305). Unless and until
it is exchanged for Debt Securities in definitive form, a temporary Global
Security in registered form may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. (Section 304).
 
  The specific terms of the depositary arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. Capital Funding anticipates that the following
provisions will apply to all depositary arrangements relating to Global
Securities.
 
  Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit the accounts of persons holding a
beneficial interest in such Global Security with the respective principal
amounts of the Debt Securities represented by such Global Security. Such
accounts shall be designated by the underwriters or agents with respect to such
Debt Securities or by Capital Funding if such Debt Securities are offered and
sold directly by Capital Funding. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the Depository for
such Global Security or its nominee ("participants") or persons that may hold
interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Depository or its nominee
(with respect to interests of participants) for such Global Security and on the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limitation and such laws may impair the ability to transfer beneficial
interests in a Global Security.
 
  So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
 
                                       8
<PAGE>
 
Indenture. (Section 308). Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of such Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
 
  Payment of principal of and any premium and interest on Debt Securities
registered in the name of a Depository or its nominee will be made to the
Depository or its nominee, as the case may be, as the registered owner of the
Global Security representing such Debt Securities. Neither Capital Funding,
Ameritech, the Trustee, any Paying Agent nor the Security Registrar for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or receiving any records relating to such beneficial ownership
interests.
 
  Subject to the restrictions discussed under "Certain Limitations on Issuance
of Bearer Securities" below, Capital Funding expects that the Depository or its
nominee, as the case may be, upon receipt of any payment of principal, premium
or interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the Global Security for such Debt Securities as shown on the records
of such Depository or its nominee. Capital Funding also expects that payments
by participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name", and will be the
responsibility of such participants. Receipt by owners of beneficial interests
in a temporary Global Security of payments in respect of such temporary Global
Security will be subject to restrictions discussed under "Certain Limitations
on Issuance of Bearer Securities" below.
 
  If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by Capital Funding
within 90 days, Capital Funding will issue Debt Securities of such series in
definitive form in exchange for the Global Security representing such series of
Debt Securities. In addition, Capital Funding may at any time and in its sole
discretion determine not to have the Registered Securities of a series
represented by a Global Security and, in such event, Capital Funding will issue
Registered Securities of such series in definitive form in exchange for the
Global Security representing such series of Registered Securities. Further, if
Capital Funding so specifies with respect to the Debt Securities of a series,
an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to Capital Funding and the
Depository, receive Debt Securities of such series in definitive form. In any
such instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery in definitive form of Debt Securities of the
series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name (if
the Debt Securities of such series are issuable as Registered Securities). Debt
Securities of such series so issued in definitive form will be issued (i) as
Registered Securities in denominations, unless otherwise specified by Capital
Funding, of U.S. $1,000 and integral multiples thereof if the Debt Securities
of such series are issuable as Registered Securities, (ii) as Bearer Securities
in denominations, unless otherwise specified by Capital Funding, of U.S. $5,000
with coupons attached if the Debt Securities of such series are issuable as
Bearer Securities, or (iii) as either Registered or Bearer Securities, if the
Debt Securities of such series are issuable in either form. (Section 305). See,
however, "Certain Limitations on Issuance of Bearer Securities" below for a
description of certain restrictions on the issuance of a Bearer Security in
definitive form in exchange for an interest in a Global Security.
 
CERTAIN LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
 
  In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issue in the United States or to United
 
                                       9
<PAGE>
 
States persons (each as defined in the Code and the regulations thereunder)
other than to offices located outside of the United States of United States
financial institutions which agree to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder, and any
underwriters, agents and dealers participating in the offering of Debt
Securities must agree that they will not offer any Bearer Securities for sale
or resale in the United States or to United States persons (other than the
financial institutions described above) nor deliver Bearer Securities within
the United States. In addition, any such underwriters, agents and dealers must
agree to send confirmations to each purchaser of a Bearer Security confirming
that such purchaser represents that it is not a United States person or is a
financial institution described above and, if such person is a dealer, that it
will send similar confirmations to purchasers from it.
 
  Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code". Under Sections 165(j) and 1287(a) of the Code, holders
that are United States persons, with certain exceptions, will not be entitled
to deduct any loss on Bearer Securities and must treat as ordinary income any
gain realized on the sale or other disposition (including the receipt of
principal) of Bearer Securities.
 
  Other restrictions and additional tax considerations may apply to the
issuance and holding of Bearer Securities. A description of such restrictions
and tax consequences will be set forth in the applicable Prospectus Supplement.
 
LIENS ON ASSETS
 
  If at any time Capital Funding mortgages, pledges, or otherwise subjects to
any lien the whole or any part of any property or assets now owned or hereafter
acquired by it, except as hereinafter provided, Capital Funding will secure the
outstanding Debt Securities, and any other obligations of Capital Funding which
may be then outstanding and entitled to the benefit of a covenant similar in
effect to this covenant, equally and ratably with the indebtedness or
obligations secured by such mortgage, pledge, or lien, for as long as any such
indebtedness or obligation is so secured. The foregoing covenant does not apply
to the creation, extension, renewal or refunding of landlords' liens, liens
with respect to the sale or financing of accounts or chattel paper, purchase-
money mortgages or liens, liens arising under the Code or liens with respect to
taxes, assessments or other governmental charges or levies which may be owed by
Capital Funding from time to time and which, if delinquent, are being contested
in good faith, or other liens to which any property or asset acquired by
Capital Funding is subject as of the date of its acquisition by Capital Funding
or to the making of any deposit or pledge to secure public or statutory
obligations or with any governmental agency at any time required by law in
order to qualify Capital Funding to conduct its business or any part thereof or
in order to entitle it to maintain self-insurance or to obtain the benefits of
any law relating to workers' compensation, unemployment insurance, old age
pensions or other social security, or with any court, board, commission, or
governmental agency as security incident to the proper conduct of any
proceeding before it. Nothing contained in the Indenture prevents Ameritech or
any Person other than Capital Funding from mortgaging, pledging, or subjecting
to any lien any of its property or assets, whether or not acquired by such
Person from Capital Funding. (Section 1006).
 
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
 
  Neither Capital Funding nor Ameritech may consolidate with or merge into any
other corporation, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and neither Capital Funding nor
Ameritech shall permit any Person to consolidate with or merge into Capital
Funding or Ameritech or convey, transfer or lease its properties and assets
substantially as an entirety to Capital Funding or Ameritech unless (i) the
corporation formed by such consolidation or into which Capital Funding or
Ameritech is merged or the Person to which the properties and assets of Capital
Funding or Ameritech are transferred substantially as an entirety shall be a
corporation organized and existing under the laws of the United States, any
State thereof or the District of Columbia and shall
 
                                       10
<PAGE>
 
expressly assume the payment of the principal of, premium, if any, and
interest, if any, on the Debt Securities and the performance of the other
covenants of Capital Funding or Ameritech, as the case may be, under the
Indenture, (ii) after giving effect to such transaction, no Event of Default,
or event which after notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing and (iii) if, as a result of
such transaction, properties or assets of Capital Funding would become subject
to a Mortgage not permitted by Section 1006 of the Indenture without equally
and ratably securing the Debt Securities as provided therein (see "Liens On
Assets" above), steps shall have been taken to secure the Debt Securities
equally and ratably with (or prior to) all indebtedness secured thereby
pursuant to Section 1006 of the Indenture. (Section 801).
 
MODIFICATION AND WAIVER
 
  Certain modifications and amendments of the Indenture, including the rights
of Holders of a series of Outstanding Debt Securities, may be made by Capital
Funding and the Trustee only with the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by the modification or amendment, provided that no such modification
or amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (i) change the stated maturity date of the principal
of, or any installment of principal or interest on, any such Debt Security;
(ii) reduce the principal amount of, premium, if any, or interest, if any, on
any such Debt Security (including in the case of an Original Issue Discount
Security the amount payable upon acceleration of the Maturity thereof); (iii)
change the Place of Payment where, or the coin or currency in which, any
principal of, premium, if any, or interest, if any, on any such Debt Security
is payable; (iv) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (v) reduce the above-
stated percentage of Outstanding Debt Securities of any series the consent of
the Holders of which is necessary to modify or amend the Indenture; (vi) modify
the foregoing requirements or reduce the percentage of aggregate principal
amount of Outstanding Debt Securities of any series necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults; or (vii) change the substantive provisions of the Guarantees.
(Section 902).
 
  The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may, on behalf of the Holders of all Debt
Securities of such series, waive, insofar as such series is concerned,
compliance by Capital Funding with certain restrictive provisions of the
Indenture. (Section 1007). The Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series may on behalf of the
Holders of all Debt Securities of such series waive any past default under the
Indenture with respect to such series, except a default in the payment of the
principal of, premium, if any, or interest, if any, on any Debt Security of
such series or in respect of a provision under which the Indenture cannot be
modified or amended without consent of the Holder of each Outstanding Debt
Security of such series affected. (Section 513).
 
EVENTS OF DEFAULT
 
  The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 90 days in
any payment of interest on such series; (ii) default in any payment of
principal of, or premium, if any, on such series when due; (iii) default in the
payment of any sinking fund installment with respect to such series when due;
(iv) default for 90 days after appropriate notice by the Holders of at least 25
percent in aggregate principal amount of the Outstanding Debt Securities in
performance of any other covenant or warranty in the Indenture (other than a
covenant or warranty included in the Indenture solely for the benefit of series
of Debt Securities other than such series); or (v) certain events in
bankruptcy, insolvency or reorganization with respect to either of Capital
Funding or Ameritech. In case an Event of Default shall occur and be continuing
with respect to any series of Debt Securities, the Trustee or the Holders of
not less than 25 percent in aggregate principal amount of the Outstanding Debt
Securities of such series may declare the principal
 
                                       11
<PAGE>
 
of such series (or, if the Debt Securities of such series are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms of such series) to be due and payable. Any Event of Default with respect
to a particular series of Debt Securities may be waived by the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
such series, except in each case a failure to pay the principal of, premium, if
any, or interest, if any, on such Debt Security. (Sections 501, 502 and 513).
 
  Each of Capital Funding and Ameritech is required to furnish the Trustee, not
less often than annually, with a certificate as to its respective compliance
with all conditions and covenants under the Indenture.
 
  Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
 
  The Indenture provides that the Trustee may withhold notice to the Holders of
the Debt Securities of any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to the Debt Securities of
such series (except in the payment of principal of, premium, if any, or
interest, if any, or any sinking fund installment) if it considers it in the
interest of the Holders of the Debt Securities to do so. (Section 602).
 
  Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601 and 603). Subject to
such provisions for indemnification and certain other rights of the Trustee,
the Indenture provides that the Holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series affected shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Debt Securities of such series. (Sections 512
and 603).
 
  No Holder of any Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless (i) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to Debt Securities of such
series, (ii) the Holders of not less than 25 percent in aggregate principal
amount of the Outstanding Debt Securities of such series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and (iii) the Trustee shall not have received from
the Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of such series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Section 507).
However, the Holder of any Debt Security will have an absolute right to receive
payment of the principal of, premium, if any, and interest, if any, on such
Debt Security on or after the due dates expressed in such Debt Security and to
institute suit for the enforcement of any such payment. (Section 508).
 
DEFEASANCE
 
  Defeasance and Discharge. If the terms of a series of Debt Securities so
provide and Capital Funding deposits or causes to be deposited with the Trustee
as trust funds in trust for that purpose money and/or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay and discharge (i) the principal of, and premium, if any, and
each installment of principal and premium, if any, and interest, if any, on the
Outstanding Debt Securities of such series on the Stated Maturity Date of such
principal or installment of principal or interest (or on the Redemption Date of
the Outstanding Debt
 
                                       12
<PAGE>
 
Securities of such series if Capital Funding has elected to redeem such
Outstanding Debt Securities in accordance with Section 1102 of the Indenture),
and (ii) any mandatory (or, if applicable, optional) sinking fund payments
applicable to the Outstanding Debt Securities of such series on the day on
which such payments are due and payable, then the Indenture will cease to be of
further effect with respect to such series (except for certain obligations to
compensate, reimburse and indemnify the Trustee, to register the transfer or
exchange of Debt Securities, to replace stolen, lost or mutilated Debt
Securities, to maintain paying agencies and to hold monies for payment in trust
and to pay any tax indemnity), and Capital Funding will be deemed to have
satisfied and discharged the Indenture with respect to such series. (Section
403). In the event of any such defeasance, holders of Debt Securities of such
series would be able to look only to such trust fund for payment of principal
of, premium, if any, and interest, if any, on their Debt Securities.
 
  Under current United States federal income tax law, such defeasance will be
treated as a taxable exchange of the related Debt Securities for an interest in
the trust. As a consequence, each holder of such Debt Securities will recognize
gain or loss equal to the difference between the holder's cost or other tax
basis for the Debt Securities and the value of the holder's interest in the
trust, and thereafter will be required to include in income a share of the
income, gain and loss of the trust, including gain or loss recognized in
connection with any substitution of collateral, as described below under
Substitution of Collateral. Prospective investors are urged to consult their
own tax advisors as to the specific consequences of such a defeasance.
 
  Defeasance of Certain Covenants and Certain Events of Default. If the terms
of the Debt Securities of any series so provide, Capital Funding may omit to
comply with certain restrictive covenants in Section 801 (Company and Guarantor
May Consolidate, Etc., Only on Certain Terms), Section 1005 (Purchase of
Securities by Company or Subsidiary) and Section 1006 (Lien on Assets), and
Sections 501(d), 501(e) and 501(f) of the Indenture, as described in clauses
(iv) and (v) under "Events of Default" above, shall not be deemed to be Events
of Default under the Indenture with respect to such series, upon the deposit
with the Trustee, in trust, of money and/or U.S. Government Obligations which
through the payment of interest and principal in respect thereof in accordance
with their terms will provide money in an amount sufficient to pay and
discharge (i) the principal (and premium, if any) and each installment of
principal, and premium, if any, and interest on the Outstanding Debt Securities
of such series on the Stated Maturity of such principal or installment of
principal or interest (or on the Redemption Date of the Outstanding Debt
Securities of such series if Capital Funding has elected to redeem such
Outstanding Debt Securities in accordance with Section 1102 of the Indenture)
and (ii) any mandatory (or, if applicable, optional) sinking fund payments
applicable to the Outstanding Debt Securities of such series on the day on
which such payments are due and payable. The obligations of Capital Funding
under the Indenture and the Debt Securities other than with respect to the
covenants referred to above and the Events of Default other than the Events of
Default referred to above shall remain in full force and effect. (Section
1008).
 
  In the event Capital Funding exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Debt Securities of any
series as described above and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default other than
Events of Default described in clauses (iv) and (v) under "Events of Default"
above, the amount of money and/or U.S. Government Obligations on deposit with
the Trustee will be sufficient to pay amounts due on the Debt Securities of
such series on their Stated Maturity or Redemption Date, but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, Capital Funding
shall remain liable for such payments. (Section 1008).
 
  Limitation on Defeasance. To exercise either option referred to above under
Defeasance and Discharge and Defeasance of Certain Covenants and Certain Events
of Default, Capital Funding is required to deliver to the Trustee an opinion of
outside counsel (which opinion, in the case of the option referred to under
Defeasance and Discharge above, is based on there having been, since the date
of
 
                                       13
<PAGE>
 
the Indenture, a change in the applicable United States federal income tax law
(including a change in official interpretation thereof)), or a ruling from or
published by the Internal Revenue Service, to the effect that the exercise of
such option will not cause holders of Debt Securities to recognize income, gain
or loss for United States federal income tax purposes, and that such holders of
Debt Securities will be subject to United States federal income tax on the same
amount and in the same manner and at the same time as would have been the case
if such option had not been exercised.
 
  Substitution of Collateral. If the terms of a series a Debt Securities so
provide, Capital Funding will be permitted at any time to withdraw any money or
U.S. Government Obligations deposited pursuant to the foregoing defeasance
provisions, provided that Capital Funding in substitution therefor
simultaneously deposits money and/or U.S. Government Obligations which would
then be sufficient to satisfy Capital Funding's payment obligations in respect
of the Debt Securities in the manner contemplated by such defeasance
provisions.
 
NOTICES
 
  Except as may otherwise be set forth in an applicable Prospectus Supplement,
notices to holders of Bearer Securities will be given by publication in a daily
newspaper in the English language of general circulation in The City of New
York and in London, and so long as such Bearer Securities are listed on the
Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall so require,
in a daily newspaper of general circulation in Luxembourg City or, if not
practical, elsewhere in Western Europe. Such publication is expected to be made
in The Wall Street Journal, the Financial Times and the Luxemburger Wort.
Notices to holders of Registered Securities will be given by mail to the
addresses of such holders as they appear in the Security Register. (Sections
101 and 106).
 
TITLE
 
  Title to any temporary global Debt Security, any permanent global Debt
Security, any Bearer Securities and any coupons appertaining thereto will pass
by delivery. Capital Funding, Ameritech, the Trustee and any agent of Capital
Funding, Ameritech or the Trustee may treat the bearer of any Bearer Security,
the bearer of any coupon and the registered owner of any Registered Security as
the absolute owner thereof (whether or not such Debt Security or coupon shall
be overdue and notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes. (Section 308).
 
REPLACEMENT OF SECURITIES AND COUPONS
 
  Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by Capital Funding at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or coupons that become
destroyed, stolen or lost will be replaced by Capital Funding at the expense of
the Holder upon delivery to the Trustee of the Security and coupons or evidence
of the destruction, loss or theft thereof satisfactory to Capital Funding and
the Trustee; in the case of any coupon which becomes destroyed, stolen or lost,
such coupon will be replaced by issuance of a new Security in exchange for the
Security to which such coupon appertains. In the case of a destroyed, lost or
stolen Security or coupon, an indemnity satisfactory to the Trustee and Capital
Funding may be required at the expense of the Holder of such Security or coupon
before a replacement Security will be issued. (Section 306).
 
GOVERNING LAW
 
  The Indenture, the Debt Securities and the Guarantees are governed by and
construed in accordance with the laws of the State of Illinois. The interest
rate on the Debt Securities will in no event be higher than the maximum rate
permitted by Illinois law as the same may be modified by United States law of
general application. Under present Illinois law, no maximum rate of interest
would apply to the Debt Securities.
 
                                       14
<PAGE>
 
CONCERNING THE TRUSTEE
 
  Ameritech and Capital Funding maintain banking relationships in the ordinary
course of business with the Trustee, and the Trustee has a commitment under a
revolving credit facility available to Ameritech. In addition, the Trustee
serves as trustee of trusts in connection with retirement and other employee
benefit plans for Ameritech and certain of its subsidiaries and provides
ancillary services in connection therewith. The Trustee also serves as
indenture trustee under a mortgage granted by Illinois Bell Telephone Company,
a wholly-owned subsidiary of Ameritech, in connection with its publicly issued
First Mortgage Bonds and under certain other unsecured indentures entered into
with other subsidiaries of Ameritech.
 
  Under the Indenture, the Trustee is required to transmit annual reports to
all Holders regarding its eligibility and qualifications as Trustee under the
Indenture and certain related matters. (Section 703).
 
                              PLAN OF DISTRIBUTION
 
  Capital Funding may sell the Debt Securities being offered hereby: (i)
directly to purchasers, (ii) through agents, (iii) through underwriters, (iv)
through dealers or (v) through a combination of any such methods of sale.
 
  The distribution of the Debt Securities may be effected from time to time in
one or more transactions either (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices, and may
include delayed delivery arrangements providing for payment and delivery at a
future date.
 
  Offers to purchase Debt Securities may be solicited directly by Capital
Funding or by agents designated by Capital Funding from time to time. Any such
agent, which may be deemed to be an underwriter, as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities in respect
of which this Prospectus is delivered will be named, and any commissions
payable by Capital Funding to such agent will be set forth, in the Prospectus
Supplement or in a pricing supplement thereto (the "Pricing Supplement").
Unless otherwise indicated in the Prospectus Supplement or Pricing Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
 
  If an underwriter or underwriters are utilized in the sale, Capital Funding
and Ameritech will execute an underwriting agreement with such underwriters at
the time of sale to them and the names of the underwriters and the terms of the
transaction will be set forth in the Prospectus Supplement, which will be used
by the underwriters to make resales of the Debt Securities.
 
  If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, Capital Funding will sell such Debt
Securities to the dealer, as principal. The dealer may then resell such Debt
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
 
  Underwriters, dealers, agents, and other persons may be entitled, under
agreements which may be entered into with Capital Funding and Ameritech, to
indemnification against, or contribution with respect to, certain civil
liabilities, including liabilities under the Securities Act. Underwriters,
dealers and agents may be customers of, engage in transactions with, or perform
services for, Capital Funding, Ameritech or subsidiaries of Ameritech in the
ordinary course of business.
 
                                       15
<PAGE>
 
                                    EXPERTS
 
  The consolidated financial statements and financial statement schedule of
Ameritech and its subsidiaries included in Ameritech's Annual Report on Form
10-K for the year ended December 31, 1994 have been audited by Arthur Andersen
LLP, independent public accountants, as set forth in the reports of such firm.
The consolidated financial statements and financial statement schedule referred
to above are incorporated by reference herein in reliance upon the authority of
Arthur Andersen LLP as experts in giving said reports.
 
                                 LEGAL OPINIONS
 
  Certain matters relating to the legality of the Debt Securities and the
Guarantees to be offered hereby will be passed upon for Capital Funding and
Ameritech by Bruce B. Howat, Esq., Counsel & Secretary of Ameritech, and by
Winston & Strawn, 35 West Wacker Drive, Chicago, Illinois 60601, and for the
agents or underwriters, if any, by Mayer, Brown & Platt, 190 South LaSalle
Street, Chicago, Illinois 60603. The opinions of Mr. Howat, Winston & Strawn
and Mayer, Brown & Platt with respect to the Debt Securities and the Guarantees
may be conditioned upon, and subject to certain assumptions regarding, future
action to be taken by Capital Funding, Ameritech and the Trustee in connection
with the issuance and sale of particular Debt Securities, the specific terms of
Debt Securities and other matters that may affect the validity of Debt
Securities but that cannot be ascertained on the date of such opinions. Mayer,
Brown & Platt from time to time acts as counsel in certain matters for
Ameritech and certain of its subsidiaries. As of the date of this Prospectus,
Mr. Howat owned beneficially and had options to acquire shares of the common
stock of Ameritech which in the aggregate constituted less than .01% of the
total issued and outstanding shares of the common stock of Ameritech.
 
                                       16
<PAGE>
 
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PRO-
SPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES
IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AF-
FAIRS OF CAPITAL FUNDING OR AMERITECH SINCE THE DATE AS OF WHICH INFORMATION
IS GIVEN IN THIS PROSPECTUS OR THAT THE INFORMATION CONTAINED HEREIN IS COR-
RECT AS OF ANY TIME SUBSEQUENT TO THIS DATE.
 
                                ---------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
 
                                  PROSPECTUS
 
<S>                                                                         <C>
Available Information......................................................   2
Incorporation of Certain Documents by Reference............................   2
Ameritech Corporation......................................................   3
Ameritech Capital Funding Corporation......................................   3
Ratio of Earnings to Fixed Charges of Ameritech............................   3
Use of Proceeds............................................................   3
Description of Debt Securities and Guarantees..............................   4
Plan of Distribution.......................................................  15
Experts....................................................................  16
Legal Opinions.............................................................  16
</TABLE>
 
                     AMERITECH CAPITAL FUNDING CORPORATION
 
     UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL AND INTEREST BY
 
                             AMERITECH CORPORATION
 
                                     LOGO
 
<PAGE>
 
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
<TABLE>
       <S>                                                            <C>
       Securities and Exchange Commission Filing Fee................  $344,830*
       Rating Fees..................................................    56,000
       Fees and Expenses of Trustee.................................    10,000
       Blue Sky Fees and Expenses...................................     5,000
       Printing and Distributing Registration Statement, Prospectus,
        Prospectus Supplement, Indenture and Miscellaneous Material.    52,000
       Accountants' Fees............................................    52,000
       Legal Fees & Expenses........................................    45,000
       Miscellaneous................................................    10,000
                                                                      --------
           Total....................................................  $574,830
                                                                      ========
</TABLE>
      --------
             *Actual. All other amounts are estimated.
 
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
      Section 145 of the Delaware General Corporation Law provides for the
    indemnification of directors and officers in certain circumstances.
 
      Article Seventh of the Certificate of Incorporation of Ameritech
    provides that Ameritech shall indemnify, in accordance with and to the
    full extent now or hereafter permitted by law, any person who was or is
    a party or is threatened to be made a party to any threatened, pending
    or completed action, suit or proceeding, whether civil, criminal,
    administrative or investigative (including, without limitation, an
    action by or in the right of Ameritech), by reason of his acting as a
    director, officer, employee or agent of, or his acting in any other
    capacity for or on behalf of, Ameritech, against any liability or
    expense actually and reasonably incurred by such person in respect
    thereof.
 
      Each of Article VI of the By-laws of Ameritech and Article VII of the
    By-laws of Capital Funding provides that such corporation shall
    indemnify any person who was or is a party or is threatened to be made
    a party to any threatened, pending or completed action, suit or
    proceeding, whether civil, criminal, administrative or investigative
    (other than an action by or in the right of such corporation) by reason
    of the fact that he (i) is or was a director, officer, employee or
    agent of such corporation or (ii) is or was serving at the request of
    such corporation as a director, officer, employee or agent of another
    corporation, partnership, joint venture, trust or other enterprise,
    against expenses (including attorneys' fees), judgments, fines and
    amounts paid in settlement actually and reasonably incurred by him in
    connection with such action, suit or proceeding if he acted in good
    faith and in a manner he reasonably believed to be in or not opposed to
    the best interests of such corporation, and, with respect to any
    criminal action or proceeding, had no reasonable cause to believe his
    conduct was unlawful.
 
      Furthermore, each of Ameritech and Capital Funding shall indemnify
    any person who was or is a party or is threatened to be made a party to
    any threatened, pending or completed action or suit by or in the right
    of such corporation to procure a judgment in its favor by reason of the
    fact that he (i) is or was a director, officer, employee or agent of
    such corporation, or (ii) is or was serving at the request of such
    corporation as a director, officer, employee or agent of another
    corporation, partnership, joint venture, trust or other enterprise
    against expenses
 
                                      II-1
<PAGE>
 
    (including attorneys' fees) actually and reasonably incurred by him in
    connection with the defense or settlement of such action or suit if he
    acted in good faith and in a manner he reasonably believed to be in or
    not opposed to the best interests of such corporation and except that
    no indemnification shall be made in respect of any claim, issue or
    matter as to which such person shall have been adjudged to be liable to
    such corporation unless and only to the extent that the Court of
    Chancery or the court in which such action or suit was brought shall
    determine upon application that, despite the adjudication of liability
    but in view of all the circumstances of the case, such person is fairly
    and reasonably entitled to indemnity for such expenses which the Court
    of Chancery or such other court shall deem proper.
 
      Article Twelfth of the Certificate of Incorporation of Ameritech
    provides that directors of such corporation shall have no personal
    liability to such corporation or its stockholders for monetary damages
    for breach of fiduciary duty as a director, except (i) for any breach
    of a director's duty of loyalty to such 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)
    under section 174 of the General Corporation Law of Delaware, or (iv)
    for any transaction from which a director derived an improper personal
    benefit. Article 8 of the Certificate of Incorporation of Capital
    Funding provides that stockholders (or stockholder representatives) of
    such corporation shall have no personal liability to such corporation
    or its stockholders for monetary damages for breach of fiduciary duty
    as a stockholder, except (i) for any breach of a stockholder's duty of
    loyalty to such 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) under Section 174 of the General
    Corporate Law of Delaware, or (iv) for any transaction from which a
    stockholder derived an improper personal benefit.
 
      The directors and officers of Ameritech and the officers and former
    directors of Capital Funding are covered by insurance policies
    indemnifying them against certain liabilities, including certain
    liabilities arising under the Securities Act of 1933, as amended, which
    might be incurred by them in such capacities and against which they
    cannot be indemnified by Ameritech and Capital Funding.
 
      AT&T Corp., formerly American Telephone and Telegraph Company
    ("AT&T"), has agreed to indemnify and hold harmless any director or
    officer of a regional holding company (including Ameritech) or any Bell
    telephone operating company, or any AT&T officer who has been
    designated to act on behalf of a regional holding company who is made,
    or threatened to be made, a party to an action or proceeding because of
    such officer's or director's involvement in the implementation of the
    Modification of Final Judgment or Plan of Reorganization against
    judgments, amounts paid in settlement, and reasonable expenses,
    including attorney's fees actually and necessarily incurred as a result
    of such action or proceeding or an appeal therein, to the extent
    permitted by applicable law, where such officer or director cannot
    legally be indemnified by the regional holding company or any Bell
    telephone operating company on whose behalf he acted, and to the extent
    such officer or director is not reimbursed by the Bell System Officers
    and Directors Liability Insurance or other insurance obtained by the
    regional holding company or Bell Communications Research, Inc.
 
      Any agents, dealers or underwriters who execute any of the agreements
    filed as exhibits to this Registration Statement will agree to
    indemnify the directors of Ameritech and the officers of Ameritech and
    Capital Funding who signed the Registration Statement against certain
    liabilities which might arise under the Securities Act of 1933, as
    amended, with respect to information furnished to Ameritech and Capital
    Funding by or on behalf of such agent, dealer or underwriter.
 
                                      II-2
<PAGE>
 
ITEM 16. EXHIBITS.
 
  The following exhibits are filed herewith or incorporated herein by
reference. Documents indicated by an asterisk (*) have been previously filed
and are incorporated herein by reference to the File No. indicated:
 
<TABLE>
     <S>       <C>
      1-a.     --Form of Selling Agency Agreement relating to the Debt Securities of
                Capital Funding.
      1-b.     --Form of Underwriting Agreement to be executed in connection with the
                Debt Securities of Capital Funding.
      4.       --Form of Indenture to be entered into among Ameritech Capital Funding
                Corporation, Ameritech Corporation, and Harris Trust and Savings Bank, as
                Trustee (the "Indenture"). The form of the guarantee of Ameritech to be
                endorsed on each of the Debt Securities is set forth in Section 311 of
                the Indenture. Forms of the Debt Securities are attached as Exhibits A
                and B to the form of Indenture. The form or forms of Debt Securities with
                respect to each particular series of Debt Securities registered hereunder
                that differ materially from the forms of the Debt Securities filed as a
                part of the Indenture will be filed as an exhibit to a Current Report on
                Form 8-K of Ameritech and incorporated herein by reference or otherwise
                made a part hereof.
      5.       --Opinion of Bruce B. Howat, Esq., Counsel & Secretary of Ameritech, as to
                the legality of the Debt Securities to be issued.
      8.       --Opinion of Winston & Strawn re: tax matters.
     *12.      --Computation of Ratio of Earnings to Fixed Charges (File No. 1-8612,
                Ameritech Corporation's Annual Report on Form 10-K for the year ended
                December 31, 1994, Exhibit 12, and Quarterly Report on Form 10-Q for the
                quarter ended March 31, 1995, Exhibit 12).
     23-a.     --Consent of Arthur Andersen LLP, independent public accountants.
     23-b.     --Consents of counsel are contained in the opinions of counsel filed as
                Exhibits 5 and 8, respectively.
     24.       --Powers of Attorney.
     25.       --Statement of Eligibility of Trustee.
</TABLE>
 
ITEM 17. UNDERTAKINGS.
 
      Ameritech and Capital Funding hereby undertake that, for purposes of
    determining any liability under the Securities Act of 1933, each filing
    of Ameritech's Annual Report pursuant to Section 13(a) or Section 15(d)
    of the Securities Exchange Act of 1934 (and where applicable, each
    filing of an employee benefit plan's annual report pursuant to 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 therein, and
    the offering of such securities at that time shall be deemed to be the
    initial bona fide offering thereof.
 
      Insofar as indemnification for liabilities arising under the
    Securities Act of 1933 may be permitted to directors, officers, and
    controlling persons of Ameritech and Capital Funding pursuant to the
    provisions referred to in Item 15 (other than the insurance policies
    referred to therein), or otherwise, Ameritech and Capital Funding 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
    Ameritech or Capital Funding of expenses incurred or paid by a
    director, officer, or controlling person of Ameritech or Capital
 
                                      II-3
<PAGE>
 
    Funding in the successful defense of any action, suit, or proceeding)
    is asserted against Ameritech or Capital Funding by such director,
    officer, or controlling person in connection with the securities being
    registered, Ameritech and Capital Funding will, unless in the opinion
    of their 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.
 
      Ameritech and Capital Funding 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.
 
                (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 the undertakings set forth in paragraphs (i)
      and (ii) above do not apply if the information required to be
      included in a post-effective amendment by those paragraphs is
      contained in periodic reports filed by Ameritech pursuant to Section
      13 or Section 15(d) of the Securities Exchange Act of 1934 that are
      incorporated by reference in this 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.
 
      Ameritech and Capital Funding hereby undertake that:
 
        (1) For purposes of determining any liability under the Securities
      Act of 1933, the information omitted from the form of prospectus
      filed as part of a registration statement in reliance upon Rule 430A
      and contained in the form of prospectus filed by the registrant
      pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
      shall be deemed to be part of the registration statement as of the
      time it was declared effective.
 
        (2) For the purpose of determining any liability under the
      Securities Act of 1933, each post-effective amendment that contains
      a form of prospectus shall be deemed to be a new registration
      statement relating to the securities offered therein, and the
      offering of such securities at that time shall be deemed to be the
      initial bona fide offering thereof.
 
                                      II-4
<PAGE>
 
                                   SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AMERITECH CORPO-
RATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, STATE OF ILLINOIS, ON THE
7TH DAY OF JUNE, 1995.
 
                                          Ameritech Corporation
 
                                                 /s/ Richard W. Pehlke
                                          By___________________________________
                                                    Richard W. Pehlke,
                                               Vice President and Treasurer
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATE INDICATED.
 
Principal Executive Officer:
 
     /s/ Richard C. Notebaert
- -----------------------------------
       Richard C. Notebaert,
     Chairman of the Board and
      Chief Executive Officer
 
Principal Financial Officer:
 
        /s/ Oren G. Shaffer
- -----------------------------------
         Oren G. Shaffer,
Executive Vice President and Chief
         Financial Officer
 
Principal Accounting Officer:
 
  /s/ Betty F. Elliott
- -----------------------------------
         Betty F. Elliott,
  Vice President and Comptroller
 
Directors:
 
  R. H. Brown*           L. M. Martin*
  D. C. Clark*           A. C. Martinez*
  M. R. Goodes*          R. C. Notebaert*
  H. H. Gray*            J. D. Ong*
  J. A. Henderson*       A. B. Rand*
  S. B. Lubar*           J. A. Unruh*
 
     /s/ Richard W. Pehlke
  *By____________________________
         Richard W. Pehlke
         Attorney-in-Fact
 
Dated: June 7, 1995
 
                                      II-5
<PAGE>
 
                                   SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AMERITECH CAPITAL
FUNDING CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CHICAGO, STATE OF
ILLINOIS, ON THE 7TH DAY OF JUNE, 1995.
 
                                          Ameritech Capital Funding
                                           Corporation
 
                                                 /s/ Robert F. Crichton
                                          By___________________________________
                                               Robert F. Crichton, President
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATE INDICATED.
 
Principal Executive Officer:
        /s/ Robert F. Crichton
  -------------------------------------
      Robert F. Crichton, President
 
Principal Financial Officer:
 
        /s/ F. Arthur Naranjo
  -------------------------------------
    F. Arthur Naranjo, Vice President
                   and
         Chief Financial Officer
 
Principal Accounting Officer:
 
        /s/ F. Arthur Naranjo
  -------------------------------------
    F. Arthur Naranjo, Vice President
                   and
         Chief Financial Officer
 
Sole Shareholder Acting in Lieu of Board of Directors:**
 
  Ameritech Corporation
 
      /s/ Oren G. Shaffer
  By_____________________________
         Oren G. Shaffer,
     Executive Vice President
   and Chief Financial Officer
 
**Pursuant to Delaware close corporation law and Ameritech Capital Funding
 Corporation's Certificate of Incorporation, Ameritech Corporation, as the sole
 shareholder of Ameritech Capital Funding Corporation, acts in lieu of any
 board of directors.
 
Dated: June 7, 1995
 
                                      II-6
<PAGE>
 
                                 EXHIBIT INDEX
 
  Documents indicated by an asterisk (*) have been previously filed and are
incorporated herein by reference to the File No. indicated:
 
<TABLE>
<CAPTION>
                                                                                        SEQUENTIAL
  EXHIBIT                                                                                  PAGE
  NUMBER                              DOCUMENT DESCRIPTION                                NUMBER
  -------                             --------------------                              ----------
 <C>       <S>                                                                          <C>
  1-a.     --Form of Selling Agency Agreement relating to the Debt Securities of
            Capital Funding.
  1-b.     --Form of Underwriting Agreement to be executed in connection with the
            Debt Securities of Capital Funding.
   4.      --Form of Indenture to be entered into among Ameritech Capital Funding
            Corporation, Ameritech Corporation, and Harris Trust and Savings Bank, as
            Trustee (the "Indenture"). The form of the guarantee of Ameritech to be
            endorsed on each of the Debt Securities is set forth in Section 311 of
            the Indenture. Forms of the Debt Securities are attached as Exhibits A
            and B to the form of Indenture. The form or forms of Debt Securities with
            respect to each particular series of Debt Securities registered hereunder
            that differ materially from the forms of the Debt Securities filed as a
            part of the Indenture will be filed as an exhibit to a Current Report on
            Form 8-K of Ameritech and incorporated herein by reference or otherwise
            made a part hereof.
   5.      --Opinion of Bruce B. Howat, Esq., Counsel & Secretary of Ameritech, as to
            the legality of the Debt Securities to be issued.
   8.      --Opinion of Winston & Strawn re: tax matters.
 *12.      --Computation of Ratio of Earnings to Fixed Charges (File No. 1-8612,
            Ameritech Corporation's Annual Report on Form 10-K for the year ended De-
            cember 31, 1994, Exhibit 12, and Quarterly Report on Form 10-Q for the
            quarter ended March 31, 1995, Exhibit 12).
  23-a.    --Consent of Arthur Andersen LLP, independent public accountants.
  23-b.    --Consents of counsel are contained in the opinions of counsel filed as
            Exhibits 5 and 8, respectively.
  24.      --Powers of Attorney.
  25.      --Statement of Eligibility of Trustee.
</TABLE>

<PAGE>
 
                                                                     EXHIBIT 1-A
                                                                     -----------


                     Ameritech Capital Funding Corporation

                   $__________ Medium-Term Notes, Series __
                                Due __________
                              From Date of Issue

                         Unconditionally Guaranteed by

                             Ameritech Corporation

                           Selling Agency Agreement


                                                             __________ __, ____
                                                              New York, New York

To the Agents listed in
  Schedule II hereto

Dear Sirs:

     Ameritech Capital Funding Corporation, a Delaware corporation (the
"Company"), and Ameritech Corporation, a Delaware corporation ("Ameritech"),
hereby confirm their agreement with each of you with respect to the issue and
sale by the Company of up to $__________ aggregate principal amount (excluding
the amount of any original issue discount) of its Medium-Term Notes, Series __
Due __________ from Date of Issue (the "Notes"). The Notes will be guaranteed
unconditionally as to principal, premium, if any, and interest (the
"Guarantees") by Ameritech and will be issued under an indenture (the
"Indenture") dated as of __________ __, ____ among the Company, Ameritech and
Harris Trust and Savings Bank, as trustee (the "Trustee"). The Notes will be
issued in minimum denominations of $__________ and in denominations exceeding
such amount by integral multiples of $__________, will be issued only in fully
registered form and will have the semi-annual or annual interest rates, which
may be zero, or interest rate formulae, if any (the term "interest rate" as used
herein denoting all such possibilities), maturities and, if appropriate, other
terms and conditions set forth in a supplement to the Prospectus referred to
below. The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and, in the case of Notes sold pursuant to Section
2(a), the Medium-Term Notes Administrative Procedures attached hereto as Exhibit
A (the "Procedures"). The Procedures may only be amended by written agreement of
the Company, Ameritech and you after notice to, and with the approval of, the
Trustee. For purposes of this Agreement, the term "Agent" shall refer to any of
you acting solely in the capacity as agent for the Company pursuant to Section
2(a) and not as principal (collectively, the "Agents", the term the "Purchaser"
shall refer to any one of you acting solely
<PAGE>
 
as principal pursuant to Section 2(b) and not as agent, and the term "you" shall
refer to you collectively whether at any time any of you is acting in both such
capacities or in either such capacity.

     1.   Representations and Warranties. The Company and Ameritech, jointly and
          ------------------------------                             
severally, represent and warrant to, and agree with, you as set forth below in
this Section 1. Certain capitalized terms used in this Section 1 are defined in
paragraph (d) of this Section.

          (a)  The Company and Ameritech meet the requirements for the use of
     Form S-3 under the Securities Act of 1933, as amended (the "Act"), and have
     filed with the Securities and Exchange Commission (the "Commission") a
     joint registration statement on such Form (File Number: 33-_____),
     including a basic prospectus, which has become effective, for the
     registration under the Act of $1,000,000,000 aggregate principal amount
     (excluding the amount of any original issued discount) of debt securities
     (the "Securities"), including the Notes, and the Guarantees.  Such
     registration statement, as amended as of the date of this Selling Agency
     Agreement (the "Agreement"), meets the requirements set forth in Rule
     415(a)(1)(x) under the Act and complies in all other material respects with
     said Rule.  The Company and Ameritech have included in such registration
     statement, or have filed or will file with the Commission pursuant to the
     applicable paragraph of Rule 424(b) under the Act, a supplement to the form
     of prospectus included in such registration statement relating to the Notes
     and the plan of distribution thereof (the "Prospectus Supplement").  In
     connection with the sale of Notes, the Company and Ameritech propose to
     file with the Commission pursuant to the applicable paragraph of Rule
     424(b) under the Act further supplements to the Prospectus Supplement
     specifying the interest rates, maturity dates and, if appropriate, other
     terms and conditions of the Notes sold pursuant hereto.

          (b)  As of the Execution Time, on the Effective Date, when any
     supplement to the Prospectus is filed with the Commission, as of the date
     of any Terms Agreement (as defined in Section 2(b)) and at the date of
     delivery by the Company of any Notes sold hereunder (a "Closing Date"), (i)
     the Registration Statement, as amended as of any such time, and the
     Prospectus, as amended or supplemented as of any such time, and the
     Indenture complied or will comply in all material respects with the
     applicable requirements of the Act, the Trust Indenture Act of 1939, as
     amended (the "Trust Indenture Act"), and the Securities Exchange Act of
     1934, as amended (the "Exchange Act"), and the respective rules thereunder;
     (ii) the Registration Statement, as amended as of any such date, did not or
     will not contain any untrue

                                      -2-
<PAGE>
 
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary in order to make the statements therein not
     misleading; and (iii) the Prospectus, as amended or supplemented as of any
     such time, did not or will not contain any untrue statement of a material
     fact or omit to state a material fact necessary in order to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading; provided, however, that neither the Company nor
                           --------  -------                              
     Ameritech makes any representations or warranties as to (i) that part of
     the Registration Statement which shall constitute the Statement of
     Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
     the Trustee or (ii) the information contained in or omitted from the
     Registration Statement or the Prospectus (or any supplement thereto), in
     either case as amended as of any such time, in reliance upon and in
     conformity with information furnished in writing to the Company or
     Ameritech by any of you specifically for use in connection with the
     preparation of the Registration Statement or the Prospectus (or any
     supplement thereto).

          (c)  The Notes have been duly authorized by the Company and, when
     executed and authenticated in accordance with the provisions of the
     Indenture and delivered to and paid for by the purchasers thereof, will
     constitute legal, valid and binding obligations of the Company entitled to
     the benefits of the Indenture; the Guarantees have been duly authorized by
     Ameritech, and when executed in accordance with the provisions of the
     Indenture, will constitute legal, valid and binding obligations of
     Ameritech; each Note, as of the Closing Date with respect thereto, will
     have been duly authorized, executed, authenticated and delivered in
     accordance with the provisions of the Indenture and will constitute a
     legal, valid and binding obligation of the Company entitled to the benefits
     of the Indenture; and each Guarantee, as of the Closing Date with respect
     to the Note upon which it is endorsed, will have been duly authorized and
     executed in accordance with the provisions of the Indenture and will
     constitute a legal, valid and binding obligation of Ameritech.  The
     foregoing representations are subject as to enforcement of remedies to
     applicable bankruptcy, reorganization, insolvency, moratorium and other
     laws affecting creditors' rights generally and from time to time in effect
     and to general equitable principles.

          (d)  The terms which follow, when used in this Agreement, shall have
     the respective meanings indicated. "Effective Date" shall mean each date
     that the Registration Statement and any post-effective amendment or
     amendments thereto became or become effective.  "Execution Time" shall mean
     the date and time that this Agreement is executed and delivered by the
     parties hereto.  "Basic Prospectus" shall

                                      -3-
<PAGE>
 
     mean the form of basic prospectus relating to the Securities contained in
     the Registration Statement at the Effective Date.  "Prospectus" shall mean
     the Basic Prospectus as supplemented by the Prospectus Supplement, as
     amended or supplemented.  "Registration Statement" shall mean the
     registration statement referred to in paragraph (a) above, including
     incorporated documents, exhibits and financial statements, as amended at
     the Execution Time.  "Rule 415" and "Rule 424" refer to such rules under
     the Act.  Any reference herein to the Registration Statement, the Basic
     Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to
     refer to and include the documents incorporated by reference therein
     pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on
     or before the Effective Date of the Registration Statement or the issue
     date of the Basic Prospectus, the Prospectus Supplement or the Prospectus,
     as the case may be; and any reference herein to the terms "amend" ,
     "amendment" or "supplement" with respect to the Registration Statement, the
     Basic Prospectus, the Prospectus Supplement or the Prospectus shall be
     deemed to refer to and include the filing of any document under the
     Exchange Act after the Effective Date of the Registration Statement or the
     issue date of the Basic Prospectus, the Prospectus Supplement or the
     Prospectus, as the case may be, deemed to be incorporated therein by
     reference.

     2.   Appointment of Agents; Solicitation by the Agents of Offers to
          --------------------------------------------------------------
Purchase; Sales of Notes to a Purchaser.
- --------------------------------------- 

     (a)  Subject to the terms and conditions set forth herein, the Company
hereby authorizes each of the Agents to act as its agent to solicit offers for
the purchase of all or part of the Notes from the Company.

     On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as an agent of
the Company, to use its best efforts to solicit offers to purchase the Notes
from the Company upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures.

     The Company reserves the right, in its sole discretion, to instruct the
Agents, or any of them, to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Notes.  Upon receipt of
instructions from the Company, the Agents, or any of them, will forthwith
suspend solicitation of offers to purchase Notes from the Company until such
time as the Company has advised them that such solicitation may be resumed.

     The Company agrees to pay each Agent a commission on the Closing Date with
respect to each sale of Notes by the Company as

                                      -4-
<PAGE>
 
a result of a solicitation made by such Agent in an amount equal to that
percentage specified in Schedule I hereto of the aggregate principal amount of
the Notes (excluding the amount of any original issue discount) sold by the
Company.  Such commission shall be payable as specified in the Procedures.

     Subject to the provisions of this Section and to the Procedures, offers for
the purchase of Notes may be solicited by an Agent as agent for the Company at
such time and in such amounts as such Agent deems advisable.  The Company may
from time to time offer Notes for sale otherwise than through an Agent; 
provided, however, that so long as this Agreement shall be it effect the Company
- --------  -------                                                               
shall not solicit or accept offers to purchase Notes through any agent other
than an Agent, except as provided in the immediately succeeding paragraph.

     The Company may authorize any other firm (an "Additional Agent") to act as
its agent to solicit offers for the purchase of Notes upon not less than one
day's prior written notice to such Agents as are at the time parties to this
Agreement.  Each Additional Agent shall execute a copy of this Agreement and
become a party hereto and shall specify its requirements for the delivery of the
certificates, letters and opinions previously delivered to the Agents under
Section 5.  From and after the time such Additional Agent shall have executed a
copy of this Agreement, the term Agent as used in this Agreement shall mean the
Agents and such Additional Agent.

     (b)  Subject to the terms and conditions stated herein, whenever the
Company and any Agent determines that the Company shall sell Notes directly to
such Agent as purchaser (the "Purchaser"), each such sale of Notes shall be made
in accordance with the terms of this Agreement and any supplemental agreement
relating thereto between the Company and the Purchaser. Each such supplemental
agreement is herein referred to as a "Terms Agreement". Each such Terms
Agreement shall be substantially in the form of Exhibit B. The Purchaser's
commitment to purchase Notes pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of the Company
and Ameritech herein contained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall describe the Notes to be purchased
by the Purchaser pursuant thereto, specify the principal amount of such Notes,
the price to be paid to the Company for such Notes, the rate at which interest
will be paid on the Notes, the Closing Date for such Notes, the place of
delivery of the Notes and payment therefor, the method of payment and any
modification of the requirements for the delivery of the opinions of counsel,
the certificates from the Company or its officers and Ameritech or its officers,
and the letter from Ameritech's independent public accountants, pursuant to
Section 6(b). Such Terms Agreement shall also specify the period of time
referred to in Section 4(m).

                                      -5-
<PAGE>
 
     Delivery of the certificates for Notes sold to the Purchaser pursuant to
any Terms Agreement shall be made as agreed to between the Company and the
Purchaser as set forth in such Terms Agreement, not later than the Closing Date
set forth in such Terms Agreement, against payment of funds to the Company in
the net amount due to the Company for such Notes by the method and in the form
set forth in such Terms Agreement.

     3.   Offering and Sale of Notes.  Each Agent, the Company and Ameritech
          --------------------------                                        
agree to perform the respective duties and obligations specifically provided to
be performed by them in the Procedures.

     4.   Agreements.  The Company and Ameritech, jointly and severally, agree
          ----------                                                          
with you that:

          (a)  Prior to the termination of the offering of the Notes, neither
     the Company nor Ameritech will file any amendment of the Registration
     Statement or supplement to the Prospectus (except for (i) periodic or
     current reports filed under the Exchange Act, (ii) a supplement relating to
     any offering of Notes providing solely for the specification of or a change
     in the maturity dates, interest rates, issuance prices or other similar
     terms of any Notes or (iii) a supplement relating to an offering of
     Securities other than the Notes) unless the Company or Ameritech, as
     appropriate, has furnished each of you a copy for your review prior to
     filing and given each of you a reasonable opportunity to comment on any
     such proposed amendment or supplement. Subject to the foregoing sentence,
     the Company and Ameritech will cause each supplement to the Prospectus to
     be filed with the Commission pursuant to the applicable paragraph of Rule
     424(b) within the time period prescribed and will provide evidence
     satisfactory to you of such filing. The Company and Ameritech will promptly
     advise each of you (i) when the Prospectus, and any supplement thereto,
     shall have been filed with the Commission pursuant to Rule 424(b), (ii)
     when, prior to the termination of the offering of the Notes, any amendment
     of the Registration Statement shall have been filed or become effective,
     (iii) of any request by the Commission for any amendment of the
     Registration Statement or supplement to the Prospectus or for any
     additional information, (iv) of the issuance by the Commission of any stop
     order suspending the effectiveness of the Registration Statement or the
     institution or, to the knowledge of the Company, threatening of any
     proceeding for that purpose and (v) of the receipt by the Company or
     Ameritech of any notification with respect to the suspension of the
     qualification of the Notes for sale in any jurisdiction or the initiation
     or, to the knowledge of the Company, threatening of any proceeding for such
     purpose. The Company and Ameritech will each use its best efforts to
     prevent the issuance of any such stop order and, if issued, to obtain as
     soon as possible the withdrawal thereof.

                                      -6-
<PAGE>
 
          (b)  If, at any time when a Prospectus relating to the Notes is
     required to be delivered under the Act, any event occurs as a result of
     which the Prospectus as then amended or supplemented would include any
     untrue statement of a material fact or omit to state any material fact
     necessary to make the statements therein, in the light of the circumstances
     under which they were made, not misleading, or if it shall be necessary to
     amend the Registration Statement or to supplement the Prospectus to comply
     with the Act or the Exchange Act or the respective rules thereunder, the
     Company or Ameritech promptly will (i) notify each of you to suspend
     solicitation of offers to purchase Notes (and, if so notified by the
     Company or Ameritech, each of you shall immediately suspend such
     solicitation and cease using the Prospectus as then supplemented), (ii)
     prepare and file with the Commission, subject to the first sentence of
     paragraph (a) of this Section 4, an amendment or supplement which will
     correct such statement or omission or effect such compliance and (iii)
     supply any amended or supplemented Prospectus to each of you in such
     quantities as you may reasonably request. If such amendment or supplement,
     and any documents, certificates and opinions furnished to each of you
     pursuant to paragraph (g) of this Section 4 in connection with the
     preparation or filing of such amendment or supplement are satisfactory in
     all respects to you, you will, upon the filing of such amendment or
     supplement with the Commission and upon the effectiveness of an amendment
     to the Registration Statement, if such an amendment is required, resume
     your obligation to solicit offers to purchase Notes hereunder.

          (c)  Ameritech, during the period when a prospectus relating to the
     Notes is required to be delivered under the Act, will file promptly all
     documents required to be filed with the Commission pursuant to Section
     13(a), 13(c), 14 or 15(d) of the Exchange Act and will furnish to each of
     you copies of such documents.  In addition, as soon as practicable after
     the date on which Ameritech makes any announcement to the general public
     concerning earnings or concerning any other event which is required to be
     described, or which Ameritech proposes to describe, in a document filed
     pursuant to the Exchange Act, Ameritech will furnish to each of you the
     information contained or to be contained in such announcement.  Ameritech
     also will furnish to each of you copies of all other press releases or
     announcements to the general public.  The Company or Ameritech will
     immediately notify each of you of any downgrading in the rating of the
     Notes or any other debt securities of the Company or Ameritech by
     [__________], or if [any] such organization shall have publicly announced
     that it has under surveillance or review, with possible negative
     implications, its rating of the Company's or Ameritech's debt securities,
     as soon as the

                                      -7-
<PAGE>
 
     Company or Ameritech learns of any such downgrading or proposal to
     downgrade.

          (d)  As soon as practicable, Ameritech will make generally available
     to its security holders and to each of you an earnings statement or
     statements of Ameritech and its subsidiaries which will satisfy the
     provisions of Section 11(a) of the Act and Rule 158 under the Act.

          (e)  The Company or Ameritech will furnish to each of you and your
     counsel, without charge, copies of the Registration Statement (including
     exhibits thereto) and, so long as delivery of a Prospectus may be required
     by the Act, as many copies of the Prospectus and any supplement thereto as
     you may reasonably request.

          (f)  The Company and Ameritech will arrange for the qualification of
     the Notes for sale under the laws of such jurisdictions as any of you may
     designate, will maintain such qualifications in effect so long as required
     for the distribution of the Notes, and will arrange for the determination
     of the legality of the Notes for purchase by institutional investors;
     provided, however, that neither the Company nor Ameritech shall be
     obligated to qualify as a foreign corporation in, or to execute or file any
     general consent to service of process under the laws of, any jurisdiction.

          (g)  The Company and Ameritech shall furnish to each of you such
     information or documents relating to the business, operations and affairs
     of the Company, the Registration Statement, the Prospectus, and any
     amendments thereof or supplements thereto, the Indenture, the Notes, this
     Agreement, the Procedures and the performance by the Company  and you of
     its and your respective obligations hereunder and thereunder as any of you
     may from time to time and at any time prior to the termination of this
     Agreement reasonably request.

          (h)  The Company or Ameritech shall, whether or not any sale of the
     Notes is consummated, (i) pay all expenses incident to the performance of
     their obligations under this Agreement, including the fees and
     disbursements of its accountants and counsel, the cost of printing or other
     production and delivery of the Registration Statement, the Prospectus, all
     amendments thereof and supplements thereto, the Indenture, this Agreement
     and all other documents relating to the offering, the cost of preparing,
     printing, packaging and delivering the Notes, the fees and disbursements,
     including fees of counsel not in excess of $_____, incurred in compliance
     with Section 4(f), the fees and disbursements of the Trustee and the fees
     of any agency

                                      -8-
<PAGE>
 
     that rates the Notes, (ii) reimburse each of you on a monthly basis for all
     out-of-pocket expenses (including without limitation advertising expenses)
     incurred by you and approved in advance by the Company in connection with
     this Agreement and (iii) pay the reasonable fees (not in excess of $______)
     and expenses of your counsel incurred in connection with this Agreement.

          (i)  Each acceptance by the Company of an offer to purchase Notes will
     be deemed to be a reconfirmation to you of the representations and
     warranties of the Company and Ameritech in Section 1(b).

          (j)  Each time that the Registration Statement or the Prospectus is
     amended or supplemented (other than by an amendment or supplement relating
     to any offering of Securities other than the Notes or providing solely for
     the specification of or a change in the maturity dates, the interest rates,
     the issuance prices or other similar terms of any Notes sold pursuant
     hereto) and each time a document filed under the Exchange Act is
     incorporated by reference into the Prospectus, the Company and Ameritech
     will deliver or cause to be delivered promptly to each of you a certificate
     of each of the Company and Ameritech, dated the date of the effectiveness
     of such amendment or the date of the filing of such supplement, in form
     reasonably satisfactory to you, of the same tenor as the certificates
     referred to in Sections 5(e)(i) and (ii) but modified to relate to the last
     day of the fiscal quarter for which financial statements of Ameritech were
     last filed with the Commission and to the Registration Statement and the
     Prospectus as amended and supplemented to the time of the effectiveness of
     such amendment or the filing of such supplement.

          (k)  Each time that the Registration Statement or the Prospectus is
     amended or supplemented (other than by an amendment or supplement (i)
     relating to any offering of Securities other than the Notes or (ii)
     providing solely for the specification of or a change in the maturity
     dates, the interest rates, the issuance prices or other similar terms of
     any Notes sold pursuant hereto) and each time a document filed under the
     Exchange Act is incorporated by reference into the Prospectus, the Company
     and Ameritech shall furnish or cause to be furnished promptly to each of
     you a written opinion of counsel for the Company and Ameritech reasonably
     satisfactory to each of you, which opinion may be given in whole or in part
     by the General Counsel, the Associate General Counsel, Counsel or General
     Attorney of Ameritech ("Ameritech Counsel"), dated the date of the
     effectiveness of such amendment or the date of the filing of such
     supplement, in form satisfactory to each of you, of the same tenor as the

                                      -9-
<PAGE>
 
     opinion referred to in Section 5(b) and (c) (or, in the case of a document
     incorporated by reference into the Prospectus which sets forth or
     incorporates by reference financial statements or other information as of
     and for a fiscal quarter, an opinion which shall be of the same tenor as
     the opinion referred to in the last clause of Section 5(b)(iv)) but
     modified to relate to the Registration Statement and the Prospectus as
     amended and supplemented to the time of the effectiveness of such amendment
     or the filing of such supplement or, in lieu of such opinion, the counsel
     last furnishing such an opinion to you may furnish each of you with a
     letter to the effect that you may rely on such last opinion to the same
     extent as though it were dated the date of such letter authorizing reliance
     (except that statements in such last opinion will be deemed to relate to
     the Registration Statement and the Prospectus as amended and supplemented
     to the time of the effectiveness of such amendment or the filing of such
     supplement).

          (l)  Each time that the Registration Statement or the Prospectus is
     amended or supplemented to set forth amended or supplemental financial
     information or a document filed under the Exchange Act setting forth
     amended or supplemented financial information is incorporated by reference
     into the Prospectus, Ameritech shall cause its independent public
     accountants promptly to furnish each of you a letter, dated the date of the
     effectiveness of such amendment or the date of the filing of such
     supplement, in form satisfactory to each of you, of the same tenor as the
     letter referred to in Section 5(f) with such changes as may be necessary to
     reflect the amended and supplemental financial information included or
     incorporated by reference in the Registration Statement and the Prospectus,
     as amended or supplemented to the date of such letter; provided, however,
                                                            --------  ------- 
     that, if the Registration Statement or the Prospectus is amended or
     supplemented solely to include or incorporate by reference financial
     information as of and for a fiscal quarter, Ameritech's independent public
     accountants may limit the scope of such letter, which shall be satisfactory
     in form to each of you, to the unaudited financial statements, the related
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations" and any other information of an accounting, financial or
     statistical nature included in such amendment or supplement, unless, in the
     reasonable judgment of any of you, such letter should cover other
     information or changes in specified financial statement line items.

          (m)  During the period, if any, specified in any Terms Agreement,
     neither the Company nor Ameritech shall, without the prior consent of the
     Purchaser thereunder, issue or announce the proposed issuance of (i) any
     debt securities, including Notes, of the Company or Ameritech with terms

                                      -10-
<PAGE>
 
     substantially similar to the Notes being purchased pursuant to such Terms
     Agreement, or (ii) any guarantee of Ameritech of debt securities, including
     Notes, with terms substantially similar to the Notes being purchased
     pursuant to such Terms Agreement.

     5.   Conditions to the Obligations of the Agents.  The obligations of each
          -------------------------------------------                          
Agent to solicit offers to purchase Notes shall be subject to the accuracy of
the representations and warranties of the Company and Ameritech contained herein
as of the Execution Time, on the Effective Date, when any supplement to the
Prospectus is filed with the Commission and as of each Closing Date, to the
accuracy of the statements of the Company and Ameritech made in any certificates
pursuant to the provisions hereof, to the performance by the Company and
Ameritech of their respective obligations hereunder and to the following
additional conditions:

          (a)  If filing of the Prospectus, or any supplement thereto, is
     required pursuant to Rule 424(b), the Prospectus, and any such supplement,
     shall have been filed in the manner and within the time period required by
     Rule 424(b), and no stop order suspending the effectiveness of the
     Registration Statement shall have been issued and no proceedings for that
     purpose shall have been instituted or threatened.

          (b)  The Company and Ameritech shall have furnished to each Agent the
     opinion of Winston & Strawn, counsel for the Company and Ameritech, dated
     as of the Execution Time, to the effect that:

                    (i)  the Notes conform to the description thereof contained
          in the Prospectus (subject to the insertion in the Notes of the
          maturity dates, the interest rates and other terms thereof which will
          be described in supplements to the Prospectus as contemplated by the
          fourth sentence of Section l(a) of this Agreement);

                   (ii)  the Indenture has been duly authorized, executed and
          delivered by the Company and Ameritech, has been duly qualified under
          the Trust Indenture Act, and constitutes a legal, valid and binding
          instrument enforceable against the Company and Ameritech in accordance
          with its terms (subject, as to enforcement of remedies, to applicable
          bankruptcy, reorganization, insolvency, moratorium or other laws
          affecting creditors' rights generally from time to time in effect and
          to general equitable principles); and the Notes have been duly
          authorized and, when executed and authenticated in accordance with the
          provisions of the Indenture and delivered to and paid for by the

                                      -11-
<PAGE>
 
          purchasers thereof, will constitute legal, valid and binding
          obligations of the Company entitled to the benefits of the Indenture;

                  (iii)  the Guarantees have been duly authorized, and when
          executed and delivered in accordance with the Indenture will
          constitute the legal, valid and binding obligation of Ameritech
          enforceable in accordance with their terms (subject, as to enforcement
          or remedies, to applicable bankruptcy, reorganization, insolvency,
          moratorium or other laws affecting creditors' rights generally from
          time to time in effect); and the Guarantees conform to the
          descriptions thereof in the Prospectus;

                   (iv)  the Registration Statement has become effective under
          the Act; any required filing of the Prospectus, and any supplements
          thereto, pursuant to Rule 424(b) has been made in the manner and
          within the time period required by Rule 424(b); to the best knowledge
          of such counsel, no stop order suspending the effectiveness of the
          Registration Statement has been issued, no proceedings for that
          purpose have been instituted or threatened, and the Registration
          Statement and the Prospectus (other than the financial statements and
          other financial and statistical information contained therein as to
          which such counsel need express no opinion) comply as to form in all
          material respects with the applicable requirements of the Act and the
          Exchange Act and the respective rules thereunder; and such counsel has
          no reason to believe that the Registration Statement at the Effective
          Date contained any untrue statement of a material fact or omitted to
          state any material fact required to be stated therein or necessary to
          make the statements therein not misleading or that the Prospectus
          includes any untrue statement of a material fact or omits to state a
          material fact necessary to make the statements therein, in the light
          of the circumstances under which they were made, not misleading;

                    (v)  this Agreement has been duly authorized, executed and
          delivered by the Company and Ameritech;

                   (vi)  such counsel confirms as its opinion with respect to
          the federal tax consequences to alien holders of the Notes the
          statements contained in the Prospectus under the caption "Material
          United States Tax Considerations" and its opinion that the discussion
          of "Material United States Tax Considerations" within the Prospectus
          Supplement is an accurate description of the

                                      -12-
<PAGE>
 
          material federal tax aspects of owning (including the purchase and
          sale of) the Notes; and

                  (vii)  assuming continued compliance with Rule 3a-5 under the
          Investment Company Act of 1940, as amended (the "Investment Company
          Act"), the Company is exempt from the provisions of the Investment
          Company Act, and Ameritech is not an "investment company" within the
          meaning of such Act.

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the States of Illinois and
New York, the corporate law of the State of Delaware or the United States, to
the extent deemed proper and specified in such opinion, upon the opinion of
other counsel of good standing believed to be reliable and who are satisfactory
to counsel for the Agent, (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and Ameritech and
public officials and (C) as to certain matters relating to the legality of the
issuance of the Notes and the Guarantees, on the opinion of Ameritech Counsel.
References to the Prospectus in this paragraph (b) include any supplements
thereto at the date such opinion is rendered.

     (c)  The Company and Ameritech shall have furnished to each Agent the
opinion of Ameritech Counsel, dated as of the Execution Time, to the effect
that:

                    (i)  each of the Company and Ameritech and Illinois Bell
          Telephone Company, Indiana Bell Telephone Company, Incorporated,
          Michigan Bell Telephone Company, The Ohio Bell Telephone Company and
          Wisconsin Bell, Inc. (individually a "Subsidiary" and collectively the
          "Subsidiaries") has been duly incorporated and is validly existing as
          a corporation in good standing under the laws of the jurisdiction in
          which it is chartered or organized, with full corporate power and
          authority to own its properties and conduct its business as described
          in the Prospectus, and is duly qualified to do business as a foreign
          corporation and is in good standing under the laws of each
          jurisdiction which requires such qualification, except where the
          failure to be so qualified would not have a material adverse effect on
          the condition (financial or other), earnings, business or property of
          Ameritech and its subsidiaries taken as a whole;

                   (ii)  all the outstanding shares of capital stock of each
          Subsidiary and the Company have been duly and validly authorized and
          issued and are fully paid and nonassessable, and, except as otherwise
          set forth in the Prospectus, all outstanding shares of capital stock
          of

                                      -13-
<PAGE>
 
          the Subsidiaries and of the Company are owned by Ameritech free and
          clear of any perfected security interest and, to the knowledge of such
          counsel, after due inquiry, any other security interests, claims,
          liens or encumbrances;

                    (iii)  to the best knowledge of such counsel, there is no
          pending or threatened action, suit or proceeding before any court or
          governmental agency, authority or body or any arbitrator involving the
          Company, Ameritech or any of its subsidiaries, of a character required
          to be disclosed in the Registration Statement which is not adequately
          disclosed in the Prospectus, and there is no franchise, contract or
          other document of a character required to be described in the
          Registration Statement or Prospectus, or to be filed as an exhibit,
          which is not described or filed as required; and the statements
          included or incorporated in the Prospectus describing any legal
          proceedings or material contracts or agreements relating to the
          Company or Ameritech fairly summarize such matters;

                   (iv)  no consent, approval, authorization or order of any
          court or governmental agency or body is required for the consummation
          of the transactions contemplated herein except such as have been
          obtained under the Act and such as may be required under the blue sky
          laws of any jurisdiction in connection with the sale of the Notes or
          the Guarantees as contemplated by this Agreement and such other
          approvals (specified in such opinion) as have been obtained;

                    (v)  neither the execution and delivery of the Indenture,
          the issue and sale of the Notes and the Guarantees nor the
          consummation of any other of the transactions herein contemplated nor
          the fulfillment of the terms hereof will conflict with, result in a
          breach of, or constitute a default under, the charter or by-laws of
          the Company or Ameritech or the terms of any indenture or other
          material agreement or material instrument known to such counsel and to
          which the Company or Ameritech or any of its Subsidiaries is a party
          or bound, or any order or regulation known to such counsel to be
          applicable to the Company or Ameritech or any of its Subsidiaries of
          any court, regulatory body, administrative agency, governmental body
          or arbitrator having jurisdiction over the Company or Ameritech or any
          of its Subsidiaries;

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Illinois, the
corporate law of the State of Delaware

                                      -14-
<PAGE>
 
or the United States, to the extent deemed proper and specified in such opinion,
upon the opinion of other counsel of good standing believed to be reliable and
who are satisfactory to counsel for the Agent and (B) as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and Ameritech and public officials.  References to the Prospectus in this
paragraph (b) include any supplements thereto at the date such opinion is
rendered.

     (d)  Each Agent shall have received from Mayer, Brown & Platt, counsel for
the Agents, such opinion or opinions, dated as of the Execution Time, with
respect to the issuance and sale of the Notes and the Guarantees, the Indenture,
the Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Agents may reasonably require, and the
Company and Ameritech shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.

     (e)  (i)  The Company shall have furnished to each Agent a certificate of
the Company, signed by the President and the principal financial or accounting
officer or Assistant Treasurer of the Company, dated the Execution Time, to the
effect that the signers of such certificate have examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this Agreement
and that:

          (A)  the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the date
hereof with the same effect as if made on the date hereof and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied as a condition to the obligation of the Agents to
solicit offers to purchase the Notes;

          (B)  no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to such officers' knowledge, threatened; and

          (C)  since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).

           (ii)  Ameritech shall have furnished to each Agent a certificate of
Ameritech, signed by the Chairman of the Board, a Vice Chairman, a President or
any Vice President and the principal

                                      -15-
<PAGE>
 
financial or accounting officer, Treasurer or Assistant Treasurer of Ameritech,
dated as of the Execution Time, to the effect that the signers of such
certificate have examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:

          (A)  the representations and warranties of Ameritech in this Agreement
are true and correct in all material respects on and as of the date hereof with
the same effect as if made on the date hereof and Ameritech has complied with
all the agreements and satisfied all the conditions on its part to be performed
or satisfied as a condition to the obligation of the Agents to solicit offers to
purchase the Notes;

          (B)  no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to such officers' knowledge, threatened; and

          (C)  since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other), earnings,
business or properties of Ameritech and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).

     (f)  At the Execution Time, Arthur Andersen LLP shall have furnished to
each Agent a letter or letters (which may refer to letters previously delivered
to the Agents), dated as of the Execution Time, in form and substance
satisfactory to the Agents, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and stating in effect that:

                    (i)  in their opinion the audited financial statements,
          financial statement schedules and pro forma financial statements, if
          any, included or incorporated in the Registration Statement and the
          Prospectus and reported on by them comply in form in all material
          respects with the applicable accounting requirements of the Act and
          the Exchange Act and the related published rules and regulations;

                   (ii)  on the basis of a reading of the latest unaudited
          financial statements made available by Ameritech and its subsidiaries,
          the carrying out of certain specified procedures (but not an
          examination in accordance with generally accepted auditing standards)
          which would not necessarily reveal matters of

                                      -16-
<PAGE>
 
          significance with respect to the comments set forth in such letter; a
          reading of the minutes of the meetings of the stockholders, directors
          and the executive and audit committees of Ameritech, and inquiries of
          certain officials of Ameritech who have responsibility for financial
          and accounting matters of Ameritech and its subsidiaries as to
          transactions and events subsequent to the date of the most recent
          audited financial statements included or incorporated in the
          Prospectus, nothing came to their attention which caused them to
          believe that:

               (1)  any unaudited financial statements included or incorporated
          in the Registration Statement and the Prospectus do not comply in form
          in all material respects with applicable accounting requirements and
          with the published rules and regulations of the Commission with
          respect to financial statements included or incorporated in quarterly
          reports on Form 10-Q under the Exchange Act; and said unaudited
          financial statements are not in conformity with generally accepted
          accounting principles applied on a basis substantially consistent with
          that of the audited financial statements included or incorporated in
          the Registration Statement and the Prospectus;

               (2)  with respect to the period subsequent to the date of the
          most recent financial statements (other than any capsule information),
          audited or unaudited, in or incorporated in the Registration Statement
          and the Prospectus, there were any changes, at a specified date not
          more than five business days prior to the date of the letter, in the
          long-term debt of Ameritech and its subsidiaries or capital stock of
          Ameritech or decreases in the stockholders' equity of Ameritech as
          compared with the amounts shown on the most recent consolidated
          balance sheet included or incorporated in the Registration Statement
          and the Prospectus, or for the period from the date of the most recent
          financial statements included or incorporated in the Registration
          Statement and the Prospectus to such specified date there were any
          decreases, as compared with the corresponding period in the preceding
          year in net revenues or income before income taxes or in total or per
          share amounts of net income of the Company and its subsidiaries,
          except in all instances for changes or decreases set forth in such
          letter, in which case the letter shall be accompanied by an
          explanation by Ameritech as to the significance thereof unless said
          explanation is not deemed necessary by the Agents; or

               (3)  the amounts included in any unaudited "capsule" information
          included or incorporated in the

                                      -17-
<PAGE>
 
          Registration Statement and the Prospectus do not agree with the
          amounts set forth in the unaudited financial statements for the same
          periods or were not determined on a basis substantially consistent
          with that of the corresponding amounts in the audited financial
          statements included or incorporated in the Registration Statement and
          the Prospectus;

               (iii)  they have performed certain other specified procedures
          as a result of which they determined that certain information of an
          accounting, financial or statistical nature (which is limited to
          accounting, financial or statistical information derived from the
          general accounting records of Ameritech and its subsidiaries) set
          forth in the Registration Statement and the Prospectus and in Exhibit
          12 to the Registration Statement, including certain information
          specified by the Agents and agreed to by Arthur Andersen LLP included
          or incorporated in Items 1, 2, 6, 7 and 11 of Ameritech's Annual
          Report on Form 10-K, incorporated in the Registration Statement and
          the Prospectus, and the information included in the "Management's
          Discussion and Analysis of Financial Condition and Results of
          Operations" included or incorporated in the Company's Quarterly
          Reports on Form 10-Q, incorporated in the Registration Statement and
          the Prospectus, agrees with the accounting records of Ameritech and
          its subsidiaries, excluding any questions of legal interpretation; and

               (iv) if unaudited pro forma financial statements are included
          or incorporated in the Registration Statement and the Prospectus, on
          the basis of a reading of the unaudited pro forma financial
          statements, carrying out certain specified procedures, inquiries of
          certain officials of the Company and the acquired company who have
          responsibility for financial and accounting matters, and proving the
          arithmetic accuracy of the application of the pro forma adjustments to
          the historical amounts in the pro forma financial statements, nothing
          came to their attention which caused them to believe that the pro
          forma financial statements do not comply in form in all material
          respects with the applicable accounting requirements of Rule 11-02 of
          Regulation S-X or that the pro forma adjustments have not been
          properly applied to the historical amounts in the compilation of such
          statements.

     References to the Prospectus in this paragraph (f) include any supplement
thereto at the date of the letter.

                                      -18-
<PAGE>
 
     (g)  Prior to the Execution Time, the Company and Ameritech shall have
furnished to each Agent such further information, documents, certificates and
opinions of counsel as the Agents may reasonably request.

     If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be cancelled at any time by the Agents.
Notice of such cancellation shall be given to the Company and Ameritech in
writing or by telephone or telegraph confirmed in writing.

     The documents required to be delivered by this Section 5 shall be delivered
at the offices of Mayer, Brown and Platt, 190 South LaSalle Street, Chicago,
Illinois 60603, on the date hereof.

     6.   Conditions to the Obligations of the Purchaser.  The obligations of
          ----------------------------------------------
the Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company and Ameritech herein
as of the date of any related Terms Agreement and as of the Closing Date for
such Notes, to the performance and observance by the Company and Ameritech of
all covenants and agreements herein contained on their parts to be performed and
observed and to the following additional conditions precedent:

          (a)  No stop order suspending the effectiveness of the Registration
          Statement shall have been issued and no proceedings for that purpose
          shall have been instituted or threatened.

          (b)  If specified by any related Terms Agreement and except to the
          extent modified by such Terms Agreement, the Purchaser shall have
          received, appropriately updated, (i) certificates of each of the
          Company and Ameritech, dated as of the Closing Date, to the effect set
          forth in Sections 5(e)(i) and (ii), respectively, (except that
          references to the Prospectus shall be to the Prospectus as
          supplemented at the time of execution of the Terms Agreement), (ii)
          the opinion of counsel for the Company and Ameritech, which opinion
          may be given in whole or in part by Ameritech Counsel, dated as of the
          Closing Date, to the effect set forth in Section 5(b) and (c), (iii)
          the opinion of Mayer, Brown & Platt, counsel for the Purchaser, dated
          as of the Closing Date, to the effect set forth in Section 5(d), and
          (iv) the letter of Arthur Andersen LLP, independent accountants

                                      -19-
<PAGE>
 
          for Ameritech, dated as of the Closing Date, to the effect set forth
          in Section 5(f).

          (c)  Prior to the Closing Date, the Company and Ameritech shall have
          furnished to the Purchaser such further information, certificates and
          documents as the Purchaser may reasonably request.

     If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement and
any Terms Agreement, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the Purchaser
thereunder and with respect to the Notes subject thereto may be cancelled at, or
at any time prior to, the respective Closing Date by the Purchaser.  Notice of
such cancellation shall be given to the Company and Ameritech in writing or by
telephone or telegraph confirmed in writing.

     7.   Right of Person Who Agreed to Purchase to Refuse to Purchase.  The
          ------------------------------------------------------------      
Company and Ameritech agree that any person who has agreed to purchase and pay
for any Note, including a Purchaser and any person who purchases pursuant to a
solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if, at the Closing Date therefor, either (a) any condition set forth
in Section 5 or 6, as applicable, shall not be satisfied or (b) subsequent to
the agreement to purchase such Note, any change in the business or properties of
Ameritech and its subsidiaries taken as a whole shall have occurred the effect
of which is, in the reasonable judgment of the Purchaser or the Agent which
presented the offer to purchase such Note, as applicable, so material and
adverse as to make it impractical or inadvisable to proceed with the delivery of
such Note.

     8.   Indemnification and Contribution.  (a)  The Company and Ameritech,
          --------------------------------                                  
jointly and severally, agree to indemnify and hold harmless each of you and each
person who controls each of you within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which you, they or any of you or them may become subject under
the Act, the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in the Prospectus or any preliminary
Prospectus, or in the amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact

                                      -20-
<PAGE>
 
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) neither the Company nor Ameritech will be liable in
- --------                                                                       
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company or Ameritech by any
of you specifically for use in connection with the preparation thereof, and (ii)
such indemnity with respect to the Prospectus or any preliminary Prospectus
shall not inure to the benefit of any of you (or any person controlling any of
you) from whom the person asserting any such loss, claim, damage or liability
purchased the Notes which are the subject thereof if such person did not receive
a copy of the Prospectus (or the Prospectus as supplemented) excluding documents
incorporated therein by reference at or prior to the confirmation of the sale of
such Notes to such person in any case where such delivery is required by the Act
and the untrue statement or omission of a material fact contained in the
Prospectus or any preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented).  This indemnity agreement will be in addition to
any liability which the Company and Ameritech may otherwise have.

     (b)  Each of you agrees to indemnify and hold harmless the Company and
Ameritech, each of their directors, each of their officers who signs the
Registration Statement and each person who controls the Company or Ameritech
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company or Ameritech to you, but only with
reference to written information relating to such of you furnished to the
Company or Ameritech by such of you specifically for use in the preparation of
the documents referred to in the foregoing indemnity.  This indemnity agreement
will be in addition to any liability which you may otherwise have.  The Company
and Ameritech acknowledge that, as of the Execution Date, the statements set
forth in the last paragraph of the cover page, and under the heading "Plan of
Distribution", of the Prospectus Supplement constitute the only information
furnished in writing by any of you for inclusion in the documents referred to in
the foregoing indemnity, and you confirm that such statements are correct.

     (c)  Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party

                                      -21-
<PAGE>
 
otherwise than under this Section 8. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
                                        --------  -------             
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties.  Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by you in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are parties
to such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that, if
clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii).

     (d)  In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company or Ameritech on grounds of policy or
otherwise, the Company, Ameritech and each of you shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which the Company, Ameritech and any of you may be subject in such proportion
so that each of you is responsible for that portion represented by the
percentage that the aggregate commissions received by such of you pursuant to
Section 2 in connection with the Note from which such losses,

                                      -22-
<PAGE>
 
claims, damages and liabilities arise (or, in the case of Notes sold pursuant to
a Terms Agreement, the aggregate commissions that would have been received by
such of you if such commissions had been payable), bears to the aggregate
principal amount of such Notes sold and the Company and Ameritech are
responsible for the balance; provided, however, that (y) in no case shall any of
                             --------  -------                                  
you be responsible for any amount in excess of the commissions received by such
of you in connection with the Notes from which such losses, claims, damages and
liabilities arise (or, in the case of Notes sold pursuant to a Terms Agreement,
the aggregate commissions that would have been received by such of you if such
commissions had been payable) and (z) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.  For purposes of this Section 8, each person who controls any
of you within the meaning of the Act shall have the same rights to contribution
as you and each person who controls the Company or Ameritech within the meaning
of either the Act or the Exchange Act, each officer of the Company and Ameritech
who shall have signed the Registration Statement and each director of the
Company and Ameritech shall have the same rights to contribution as the Company
and Ameritech, subject in each case to clauses (y) and (z) of this paragraph
(d).  Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this paragraph
(d).

     9.   Termination. (a)  This Agreement will continue in effect until
          -----------                                                   
terminated as provided in this Section 9.  This Agreement may be terminated by
either the Company and Ameritech as to any of you or any of you insofar as this
Agreement relates to such of you, giving written notice (or telecopied notice
confirmed promptly in writing) of such termination to such of you or the Company
and Ameritech, as the case may be.  This Agreement shall so terminate at the
close of business on the first business day following the receipt of such notice
by the party to whom such notice is given.  In the event of such termination, no
party shall have any liability to the other party hereto, except as provided in
the fourth paragraph of Section 2(a), Section 4(h), Section 8 and Section 10.

     (b)  Each Terms Agreement shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company and Ameritech prior
to delivery of any payment for Notes to be purchased thereunder, if prior to
such time (i) trading in Ameritech's Common Stock shall have been suspended by
the

                                      -23-
<PAGE>
 
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) there shall have
occurred any downgrading in the rating accorded to the Company's or Ameritech's
debt securities by [________] or [any] such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's or Ameritech's debt securities,
(iii) a banking moratorium shall have been declared either by Federal or New
York State authorities, or (iv) there shall have occurred any outbreak or
material escalation of hostilities or other calamity or crisis the effect of
which on the financial markets or the United States is such as to make it, in
the judgment of the Purchaser, impracticable to market such Notes.

     10.  Representations and Indemnities to Survive.  The respective
          ------------------------------------------                 
agreements, representations, warranties, indemnities and other statements of the
Company, Ameritech or their respective officers and of you set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of you or the Company, Ameritech or any
of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Notes.  The provisions
of Sections 4(h) and 8 hereof shall survive the termination or cancellation of
this Agreement.

     11.  Notices.  All communications hereunder will be in writing and
          -------                                                      
effective only on receipt, and, if sent to any of you, will be mailed,
delivered, telecopied or telegraphed and confirmed, to such of you, at the
address specified in Schedule I hereto; if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 30 South Wacker Drive, Chicago,
Illinois 60606, attention of _____________; or, if sent to Ameritech, will be
mailed, delivered, telecopied or telegraphed and confirmed to it at 30 South
Wacker Drive, Chicago, Illinois 60606, attention of the _______________.

     12.  Successors.  This Agreement will inure to the benefit of and be
          ----------                                                     
binding upon the parties hereto and their respective successors and the officers
and directors of controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.

     13.  Applicable Law.  This Agreement will be governed by and construed in
          --------------                                                      
accordance with the laws of the State of New York.

                                      -24-
<PAGE>
 
     If the foregoing is in accordance with your understanding of our agreement;
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, Ameritech and you.

                                                 Very truly yours,

                                                 Ameritech Capital Funding
                                                      Corporation
                                                                                

                                                 By:____________________________
                                                    Its:
                                                                                

                                                 Ameritech Corporation
                                                                                

                                                 By:____________________________
                                                    Its:


The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.

______________________


By:___________________________
   Its:

                                      -25-
<PAGE>
 
                                  SCHEDULE I


Commissions:
- ------------

          The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:



     Term                                                        Commission Rate
     ----                                                        ---------------



Address for Notice to Agent[s]:
- ------------------------------ 

          Notice to __________ shall be directed to it at __________, Attention
of __________, Telecopier (___) ___-____.

                                      -26-
<PAGE>
 
                                  SCHEDULE II



[List Agent[s]]

                                      -27-
<PAGE>
 
                                                                       EXHIBIT A
                                                                       ---------


                     Ameritech Capital Funding Corporation

                   $__________ Medium-Term Notes, Series __
                                Due __________
                              From Date of Issue

                         Unconditionally Guaranteed by

                             Ameritech Corporation

                  Medium-Term Note Administrative Procedures
                  ------------------------------------------
                              __________ __, ____

          The Medium-Term Notes, Series __, Due __________ from Date of Issue
(the "Notes") of Ameritech Capital Funding Corporation (the "Company") which
Notes will be unconditionally guaranteed as to principal, premium, if any, and
interest by Ameritech Corporation ("Ameritech") are to be offered on a
continuing basis. __________, as agents (each an "Agent" and collectively, the
"Agents"), have agreed to solicit purchases of Notes issued in fully registered
form.  The Agents will not be obligated to purchase Notes for their own account.
The Notes are being sold pursuant to a Selling Agency Agreement among the
Company, Ameritech and the Agents dated the date hereof (the "Agency
Agreement").  The Notes will rank equally with all other unsecured and
unsubordinated debt of the Company and have been registered with the Securities
and Exchange Commission (the "Commission").  The Notes will be issued under the
Indenture dated as of __________ __, ____ (the "Indenture"), among the Company,
Ameritech and Harris Trust and Savings Bank, as trustee (the "Trustee").

          Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to __________ ("[________]"), as agent for The Depository
Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC
(a "Book-Entry Note") or a certificate delivered to the Holder thereof or a
Person designated by such Holder (a "Certificated Note").  Only Notes
denominated and payable in U.S. dollars may be issued as Book-Entry Notes.  An
owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note.

          The procedures to be followed during, and the specific terms of, the
solicitation of orders by the Agents and the sale as a result thereof by the
Company are explained below.  Administrative and record-keeping responsibilities
will be handled for the Company by its Treasury Department.  The Company will
advise the Agents and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agents and the Trustee are to
communicate regarding orders to purchase Notes and the details of their
delivery.

                                      -28-
<PAGE>
 
          Administrative procedures and specific terms of the offering are
explained below.  Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted from time to
time in accordance with changes in DTC's operating requirements, and
Certificated Notes will be issued in accordance with the administrative
procedures set forth in Part II hereof.  Unless otherwise defined herein, terms
defined in the Indenture and the Notes shall be used herein as therein defined.
Notes for which interest is calculated on the basis of a fixed interest rate,
which may be zero, are referred to herein as "Fixed Rate Notes".  Notes for
which interest is calculated on the basis of a floating interest rate are
referred to herein as "Floating Rate Notes".  To the extent the procedures set
forth below conflict with the provisions of the Notes, the Indenture, DTC's
operating requirements or the Agency Agreement, the relevant provisions of the
Notes, the Indenture, DTC's operating requirements and the Agency Agreement
shall control.


                                    PART I

                         Administrative Procedures for
                         -----------------------------
                               Book-Entry Notes
                               ----------------

          In connection with the qualifications of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, [________] will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
from the Company and [________] to DTC dated as of the date hereof and a Medium-
Term Note Certificate Agreement between [________] and DTC and its obligations
as a participant in DTC, including DTC's Same-Day Funds Settlement system
("SDFS").

Issuance:                               On any date of settlement (as defined
- --------                                under "Settlement" below) for one or
                                        more Book-Entry Notes, the Company
                                        will issue a single global security
                                        in fully registered form without
                                        coupons (a "Global Security")
                                        representing up to U.S. $100,000,000
                                        principal amount of all such
                                        Book-Entry Notes that have the same
                                        original issue date, original issue
                                        discount provisions, if any, Interest
                                        Payment Dates, Regular Record Dates,
                                        Interest Payment Period, redemption
                                        provisions, if any, Maturity Date,
                                        and, in the case of Fixed Rate Notes,
                                        interest rate, or, in the case of
                                        Floating Rate Notes, initial interest
                                        rate, Base Rate, Index Maturity,
                                        Interest Reset Period, Interest
                                        Reset

                                      -29-
<PAGE>
 
                                        Dates, Spread or Spread Multiplier,
                                        if any, minimum interest rate, if
                                        any, and maximum interest rate, if
                                        any (collectively, the "Terms").
                                        Each Global Security will be dated
                                        and issued as of the date of its
                                        authentication by the Trustee.  Each
                                        Global Security will bear an original
                                        issue date, which will be (i) with
                                        respect to an original Global
                                        Security (or any portion thereof),
                                        the original issue date specified in
                                        such Global Security and (ii)
                                        following a consolidation of Global
                                        Securities, with respect to the
                                        Global Security resulting from such
                                        consolidation, the most recent
                                        Interest Payment Date to which
                                        interest has been paid or duly
                                        provided for on the predecessor
                                        Global Securities, regardless of the
                                        date of authentication of such
                                        resulting Global Security.  No Global
                                        Security will represent (i) both
                                        Fixed Rate and Floating Rate
                                        Book-Entry Notes or (ii) any
                                        Certificated Note.
 
Identification                          The Company has arranged with the
- --------------                          CUSIP Service Bureau of Standard &
Numbers:                                Poor's Corporation (the "CUSIP
- -------                                 Service Bureau") for the reservation
                                        of a series of CUSIP numbers, which
                                        series consists of approximately ___
                                        CUSIP numbers and relates to Global
                                        Securities representing Book-Entry
                                        Notes and book-entry medium term
                                        notes issued by the Company with
                                        other series designations.
                                        [________], the Company and DTC have
                                        obtained from the CUSIP Service
                                        Bureau a written list of such
                                        reserved CUSIP numbers.  The Company
                                        will assign CUSIP numbers to Global
                                        Securities as described below under
                                        Settlement Procedure "B".  DTC will
                                        notify the CUSIP Service Bureau
                                        periodically of the CUSIP numbers
                                        that the Company has assigned to
                                        Global Securities.  [________] will
                                        notify the Company at any time when
                                        fewer than ___ of the reserved CUSIP
                                        numbers remain unassigned to Global
                                        Securities, and, if it deems
                                        necessary, the Company will reserve
                                        additional CUSIP numbers for
                                        assignment to Global Securities.
                                        Upon

                                      -30-
<PAGE>
 
                                        obtaining such additional CUSIP
                                        numbers, the Company shall deliver a
                                        list of such additional CUSIP numbers
                                        to [________] and DTC.
 
 
Registration:                           Global Securities will be issued only
- ------------                            in fully registered form without
                                        coupons.  Each Global Security will
                                        be registered in the name of CEDE &
                                        CO., as nominee for DTC, on the
                                        securities register for the Notes
                                        maintained under the Indenture.  The
                                        beneficial owner of a Book-Entry Note
                                        (or one or more indirect participants
                                        in DTC designated by such owner) will
                                        designate one or more participants in
                                        DTC (with respect to such Book-Entry
                                        Note, the "Participants") to act as
                                        agent or agents for such owner in
                                        connection with the book-entry system
                                        maintained by DTC, and DTC will
                                        record in book-entry form, in
                                        accordance with instructions provided
                                        by such Participants, a credit
                                        balance with respect to such
                                        beneficial owner in such Book-Entry
                                        Note in the account of such
                                        Participants.  The ownership interest
                                        of such beneficial owner (or such
                                        participant) in such Book-Entry Note
                                        will be recorded through the records
                                        of such Participants or through the
                                        separate records of such Participants
                                        and one or more indirect participants
                                        in DTC.
 
Transfers:                              Transfers of a Book-Entry Note will
- ---------                               be accomplished by book entries made
                                        by DTC and, in turn, by Participants
                                        (and in certain cases, one or more
                                        indirect participants in DTC) acting
                                        on behalf of beneficial transferors
                                        and transferees of such Note.
 
Exchanges:                              [________] may deliver to DTC and the
- ---------                               CUSIP Service Bureau at any time a
                                        written notice of consolidation (a
                                        copy of which shall be attached to
                                        the resulting Global Security
                                        described below) specifying (i) the
                                        CUSIP numbers of two or more
                                        Outstanding Global Securities that
                                        represent (A) Fixed Rate Book-Entry
                                        Notes having the same Terms and for
                                        which interest has been paid to

                                      -31-
<PAGE>
 
                                        the same date or (B) Floating Rate
                                        Book-Entry Notes having the same
                                        Terms and for which interest has been
                                        paid to the same date, (ii) a date,
                                        occurring at least thirty days after
                                        such written notice is delivered and
                                        at least thirty days before the next
                                        Interest Payment Date for such
                                        Book-Entry Notes, on which such
                                        Global Securities shall be exchanged
                                        for a single replacement Global
                                        Security and (iii) a new CUSIP
                                        number, obtained from the Company, to
                                        be assigned to such replacement
                                        Global Security.  Upon receipt of
                                        such a notice, DTC will send to its
                                        participants (including [________]) a
                                        written reorganization notice to the
                                        effect that such exchange will occur
                                        on such date.  Prior to the specified
                                        exchange date, [________] will
                                        deliver to the CUSIP Service Bureau a
                                        written notice setting forth such
                                        exchange date and such new CUSIP
                                        number and stating that, as of such
                                        exchange date, the CUSIP numbers of
                                        the Global Securities to be exchanged
                                        will no longer be valid.  On the
                                        specified exchange date, [________]
                                        will exchange such Global Securities
                                        for a single Global Security bearing
                                        the new CUSIP number and the CUSIP
                                        numbers of the exchanged Global
                                        Securities will, in accordance with
                                        CUSIP Service Bureau procedures, be
                                        cancelled and not immediately
                                        reassigned.
                                        Notwithstanding the foregoing, if the
                                        Global Securities to be exchanged
                                        exceed U.S. $100,000,000 in aggregate
                                        principal amount, one Global Security
                                        will be authenticated and issued to
                                        represent each U.S. $100,000,000 of
                                        principal amount of the exchanged
                                        Global Securities and an additional
                                        Global Security will be authenticated
                                        and issued to represent any remaining
                                        principal amount of such Global
                                        Securities (see "Denominations"
                                        below).
 
Maturities:                             Each Book-Entry Note will mature on a
- ----------                              Date [_________] after the settlement
                                        date for such Note.
 
 

                                      -32-
<PAGE>
 

Denominations:                          Book-Entry Notes will be issued in
- -------------
                                        principal amounts of $100,000 or any
                                        amount in excess thereof that is an
                                        integral multiple of $1,000.  Global
                                        Securities will be denominated in
                                        principal amounts not in excess of
                                        U.S. $100,000,000.  If one or more
                                        Book-Entry Notes having an aggregate
                                        principal amount in excess of U.S.
                                        $100,000,000 would, but for the
                                        preceding sentence, be represented by
                                        a single Global Security, then one
                                        Global Security will be authenticated
                                        and issued to represent each U.S.
                                        $100,000,000 principal amount of such
                                        Book-Entry Note or Notes and an
                                        additional Global Security will be
                                        authenticated and issued to represent
                                        any remaining principal amount of
                                        such Book-Entry Note or Notes.  In
                                        such a case, each of the Global
                                        Securities representing such
                                        Book-Entry Note or Notes shall be
                                        assigned the same CUSIP number.
 
Interest:                               General.  Interest, if any, on each
- --------                                -------
                                        Book-Entry Note will accrue from the
                                        original issue date for the first
                                        interest period or the last date to
                                        which interest has been paid, if any,
                                        for each subsequent interest period,
                                        on the Global Security representing
                                        such Book-Entry Note, and will be
                                        calculated and paid in the manner
                                        described in such Book-Entry Note and
                                        in the Prospectus (as defined in the
                                        Agency Agreement), as supplemented by
                                        the applicable Pricing Supplement.
                                        Unless otherwise specified therein,
                                        each payment of interest on a
                                        Book-Entry Note will include interest
                                        accrued to but excluding the Interest
                                        Payment Date (provided, that in the
                                        case of Floating Rate Book-Entry
                                        Notes which reset daily or weekly,
                                        interest payments will include
                                        accrued interest to and including the
                                        Regular Record Date immediately
                                        preceding the Interest Payment Date)
                                        or to but excluding Maturity (other
                                        than a Maturity of a Fixed Rate
                                        Book-Entry Note occurring on the 31st
                                        day of a month, in which case such
                                        payment of interest will include
                                        interest accrued to but excluding
                                        the

                                      -33-
<PAGE>
 
                                        30th day of such month).  Interest
                                        payable at the Maturity of a
                                        Book-Entry Note will be payable to
                                        the Person to whom the principal of
                                        such Note is payable.  Standard &
                                        Poor's Corporation will use the
                                        information received in the pending
                                        deposit message described under
                                        Settlement Procedure "C" below in
                                        order to include the amount of any
                                        interest payable and certain other
                                        information regarding the related
                                        Global Security in the appropriate
                                        (daily or weekly) bond report
                                        published by Standard & Poor's
                                        Corporation.
 
                                        Regular Record Dates.  The Regular
                                        --------------------
                                        Record Date with respect to any
                                        Interest Payment Date shall be the
                                        date fifteen calendar days
                                        immediately preceding such Interest
                                        Payment Date.
 
                                        Interest Payment Dates on Fixed Rate
                                        ------------------------------------ 
                                        Book-Entry Notes.  Unless otherwise
                                        ----------------
                                        specified pursuant to Settlement
                                        Procedure "A" below, interest
                                        payments on Fixed Rate Book-Entry
                                        Notes will be made semiannually on
                                        [________] and [________] of each
                                        year or annually on [________] of
                                        each year and at Maturity; provided,
                                        however, that in the case of a Fixed
                                        Rate Book-Entry Note issued between a
                                        Regular Record Date and an Interest
                                        Payment Date, the first interest
                                        payment will be made on the Interest
                                        Payment Date following the next
                                        succeeding Regular Record Date.
 
                                        Interest Payment Dates on Floating
                                        ----------------------------------
                                        Rate Book-Entry Notes.  Interest
                                        ---------------------
                                        payments will be made on Floating
                                        Rate Book-Entry Notes monthly,
                                        quarterly, semi-annually or annually.
                                        Unless otherwise agreed upon,
                                        interest will be payable, in the case
                                        of Floating Rate Book-Entry Notes
                                        with a monthly Interest Payment
                                        Period, on the third Wednesday of
                                        each month; with a quarterly Interest
                                        Payment Period, on the third
                                        Wednesday of March, June, September
                                        and December of each year; with a
                                        semi-annual Interest Payment Period,
                                        on the third Wednesday of the two
                                        months specified pursuant to

                                      -34-
<PAGE>
 
                                        Settlement Procedure "A" below; and with
                                        an annual Interest Payment Period, on
                                        the third Wednesday of the month
                                        specified pursuant to Settlement
                                        Procedure "A" below; provided, however,
                                                             --------  -------
                                        that if an Interest Payment Date for a
                                        Floating Rate Book-Entry Note would
                                        otherwise be a day that is not a
                                        Business Day with respect to such
                                        Floating Rate Book-Entry Note, such
                                        Interest Payment Date will be the next
                                        succeeding Business Day with respect to
                                        such Floating Rate Book-Entry Note,
                                        except that in the case of a Floating
                                        Rate Book-Entry Note for which the Base
                                        Rate is LIBOR, if such Business Day is
                                        in the next succeeding calendar month,
                                        such Interest Payment Date will be the
                                        immediately preceding Business Day; and
                                        provided further, that in the case of a
                                        -------- -------
                                        Floating Rate Book-Entry Note issued
                                        between a Regular Record Date and an
                                        Interest Payment Date, the first
                                        interest payment will be made on the
                                        Interest Payment Date following the next
                                        succeeding Regular Record Date.
 
                                        Notice of Interest Payment and Regular
                                        --------------------------------------
                                        Record Dates.  On the first Business Day
                                        ------------
                                        of January, April, July and October of
                                        each year, [________] will deliver to
                                        the Company and DTC a written list of
                                        Regular Record Dates and Interest
                                        Payment Dates that will occur with
                                        respect to Book-Entry Notes during the
                                        six-month period beginning on such first
                                        Business Day. Promptly after each
                                        Interest Determination Date for Floating
                                        Rate Book-Entry Notes, [________], as
                                        Calculation Agent, will notify Standard
                                        & Poor's Corporation of the interest
                                        rates determined on such Interest
                                        Determination Date.
                                        
 
Calculation of                          Fixed Rate Book-Entry Notes.  Interest 
- --------------                          ---------------------------
Interest:                               on Fixed Rate Book-Entry Notes
- --------                                                                     
                                        (including interest for partial periods)
                                        will be calculated on the basis of a 
                                        360-day year of twelve 30-day months.
 
                                        Floating Rate Book-Entry Notes.
                                        -------------------------------
                                        Interest rates on Floating Rate

                                      -35-
<PAGE>
 
                                        Book-Entry Notes will be determined
                                        as referred to in the form of Notes.
                                        Interest on Floating Rate Book-Entry
                                        Notes, except as otherwise set forth
                                        therein, will be calculated on the
                                        basis of actual days elapsed and a
                                        year of 360 days, except that in the
                                        case of a Floating Rate Book-Entry
                                        Note for which the Base Rate is
                                        Treasury Rate, interest will be
                                        calculated on the basis of the actual
                                        number of days in the year.
 
Payments of                             Payment of Interest Only.  Promptly
- -----------                             ------------------------
Principal and                           after each Regular Record Date,
- -------------
Interest:                               [________] will deliver to the Company
- --------
                                        and DTC a written notice setting forth,
                                        by CUSIP number, the amount of interest
                                        to be paid on each Global Security on
                                        the following Interest Payment Date
                                        (other than an Interest Payment Date
                                        coinciding with Maturity) and the total
                                        of such amounts. DTC will confirm the
                                        amount payable on each Global Security
                                        on such Interest Payment Date by
                                        reference to the appropriate (daily or
                                        weekly) bond reports published by
                                        Standard & Poor's
                                        Corporation.  The Company will pay to
                                        [________], as Paying Agent, the
                                        total amount of interest due on such
                                        Interest Payment Date (other than at
                                        Maturity), and [________] will pay
                                        such amount to DTC, at the times and
                                        in the manner set forth below under
                                        "Manner of Payment".  If any Interest
                                        Payment Date for a Book-Entry Note is
                                        not a Business Day, the payment due
                                        on such day shall be made on the next
                                        succeeding Business Day and no
                                        interest shall accrue on such payment
                                        for the period from and after such
                                        Interest Payment Date.
 
                                        Payments at Maturity.  On or about
                                        --------------------
                                        the first Business Day of each month,
                                        [________] will deliver to the Company,
                                        DTC and the Trustee a written list of
                                        principal and interest to be paid on
                                        each Global Security maturing (on a
                                        Maturity or Redemption Date or
                                        otherwise) in the following month.
                                        [________], the Company and DTC will
                                        confirm the amounts of such principal

                                      -36-
<PAGE>
 
                                        and interest payments with respect to
                                        each such Global Security on or about
                                        the fifth Business Day preceding the
                                        Maturity of such Global Security.  On
                                        or before Maturity, the Company will
                                        pay to [________], as Paying Agent,
                                        the principal amount of such Global
                                        Security, together with interest due
                                        at such Maturity.  [________] will
                                        pay such amount to DTC at the times
                                        and in the manner set forth below
                                        under "Manner of Payment".  If any
                                        Maturity of a Global Security
                                        representing Book-Entry Notes is not
                                        a Business Day, the payment due on
                                        such day shall be made on the next
                                        succeeding Business Day and no
                                        interest shall accrue on such payment
                                        for the period from and after such
                                        Maturity.  Promptly after payment to
                                        DTC of the principal and interest due
                                        at Maturity of such Global Security,
                                        the Trustee will cancel such Global
                                        Security in accordance with the
                                        Indenture and so advise the Company.
                                        On the first Business Day of each
                                        month, [________] will deliver to the
                                        Trustee a written statement
                                        indicating the total principal amount
                                        of Outstanding Global Securities as
                                        of the immediately preceding Business
                                        Day.
 
                                        Manner of Payment.  The total amount
                                        -----------------
                                        of any principal and interest due on
                                        Global Securities on any Interest
                                        Payment Date or a Maturity shall be paid
                                        by the Company to [________] in
                                        immediately available funds no later
                                        than 9:30 A.M. (New York City time) on
                                        such Date. The Company will make such
                                        payment on such Global Securities by
                                        instructing [________] to withdraw funds
                                        from an account maintained by the
                                        Company at [________] or by wire
                                        transfer to [________]. The Company will
                                        confirm any such instructions in writing
                                        to [________]. Prior to 10 A.M. (New
                                        York City time) on the Date of Maturity
                                        or as soon as possible thereafter,
                                        [________] will pay by separate wire
                                        transfer (using Fedwire message entry
                                        instructions in a form previously
                                        specified by DTC) to an account at the

                                      -37-
<PAGE>
 
                                        Federal Reserve Bank of New York
                                        previously specified by DTC, in funds
                                        available for immediate use by DTC,
                                        each payment of principal (together
                                        with interest thereon) due on a
                                        Global Security on such Date.  On
                                        each Interest Payment Date (other
                                        than at Maturity), interest payments
                                        shall be made to DTC, in funds
                                        available for immediate use by DTC,
                                        in accordance with existing
                                        arrangements between [________] and
                                        DTC.  On each such Date, DTC will
                                        pay, in accordance with its SDFS
                                        operating procedures then in effect,
                                        such amounts in funds available for
                                        immediate use to the respective
                                        Participants in whose names the
                                        Book-Entry Notes represented by such
                                        Global Securities are recorded in the
                                        book-entry system maintained by DTC.
                                        None of the Company (as issuer or as
                                        paying agent), Ameritech, the Trustee
                                        or [________] shall have any direct
                                        responsibility or liability for the
                                        payment by DTC to such Participants
                                        of the principal of and interest on
                                        the Book-Entry Notes.
 
                                        Withholding Taxes.  The amount of any
                                        -----------------
                                        taxes required under applicable law
                                        to be withheld from any interest
                                        payment on a Book-Entry Note will be
                                        determined and withheld by the
                                        Participant, indirect participant in
                                        DTC or other Person responsible for
                                        forwarding payments and materials
                                        directly to the beneficial owner of
                                        such Note.
 
Procedure for Rate                      The Company and the Agents will discuss 
- ------------------                      
Setting and                             from time to time the aggregate 
- -----------                             
Posting:                                principal amount of, the issuance price 
- -------                                 
                                        of, and the interest rates to be borne
                                        by, Book-Entry Notes that may be sold as
                                        a result of the solicitation of orders
                                        by the Agents. If the Company decides to
                                        set prices of, and rates borne by, any
                                        Book-Entry Notes in respect of which the
                                        Agents are to solicit orders (the
                                        setting of such prices and rates to be
                                        referred to herein as "posting") or if
                                        the Company decides to change prices or
                                        rates previously posted by it, it will

                                      -38-
<PAGE>
 
                                        promptly advise the Agents of the
                                        prices and rates to be posted.
 
Acceptance and                          Unless otherwise instructed by the
- --------------                          
Rejection of                            Company, each Agent will advise the
- ------------                            
Orders:                                 Company promptly by telephone of all
- ------                                  
                                        orders to purchase Book-Entry Notes
                                        received by such Agent, other than
                                        those rejected by it in whole or in
                                        part in the reasonable exercise of
                                        its discretion.  Unless otherwise
                                        agreed by the Company and the Agents,
                                        the Company has the right to accept
                                        orders to purchase Book-Entry Notes
                                        and may reject any such orders in
                                        whole or in part.
 
Preparation of                          If any order to purchase a Book-Entry
- --------------                          
Pricing                                 Note is accepted by or on behalf of
- -------                                 
Supplement:                             the Company, the Company will prepare
- ----------                              
                                        a pricing supplement (a "Pricing
                                        Supplement") reflecting the terms of
                                        such Book-Entry Note and will arrange
                                        to have ten copies thereof filed with
                                        the Commission in accordance with the
                                        applicable paragraph of Rule 424(b)
                                        under the Act and will supply at
                                        least ten copies thereof (and
                                        additional copies if requested) to
                                        the Agent which presented the order
                                        (the "Presenting Agent").  The
                                        Presenting Agent will cause a
                                        Prospectus and a Pricing Supplement
                                        to be delivered to the purchaser of
                                        such Book-Entry Note.
 
                                        In each instance that a Pricing
                                        Supplement is prepared, the Presenting
                                        Agent will affix such Pricing Supplement
                                        to each Prospectus prior to its use.
                                        Outdated Pricing Supplements (other than
                                        those retained for files), will be
                                        destroyed.

Suspension of                           The Company may instruct the Agents, or 
- -------------                           
Solicitation;                           any of them, to suspend at any time, for
- -------------                           
Amendment or                            any period of time or permanently, the 
- ------------                            
Supplement:                             solicitation of orders to purchase Book-
- ----------                              
                                        Entry Notes. Upon receipt of such
                                        instructions, the Agents, or any of
                                        them, will forthwith suspend
                                        solicitation until such time as the
                                        Company has advised them that such
                                        solicitation may be resumed.
 

                                      -39-
<PAGE>
 
                                        In the event that at the time the
                                        Company suspends solicitation of
                                        purchases there shall be any orders
                                        outstanding for settlement, the
                                        Company will promptly advise the
                                        Agents, the Trustee and [________]
                                        whether such orders may be settled
                                        and whether copies of the Prospectus
                                        as in effect at the time of the
                                        suspension, together with the
                                        appropriate Pricing Supplement, may
                                        be delivered in connection with the
                                        settlement of such orders.  The
                                        Company will have the sole
                                        responsibility for such decision and
                                        for any arrangements that may be made
                                        in the event that the Company
                                        determines that such orders may not
                                        be settled or that copies of such
                                        Prospectus may not be so delivered.
                                        If the Company decides to amend or
                                        supplement the Registration Statement
                                        (as defined in the Agency Agreement)
                                        or the Prospectus, it will promptly
                                        advise the Agents and furnish the
                                        Agents with the proposed amendment or
                                        supplement and with such certificates
                                        and opinions as are required, all to
                                        the extent required by and in
                                        accordance with the terms of the
                                        Agency Agreement.  Subject to the
                                        provisions of the Agency Agreement,
                                        the Company may file with the
                                        Commission any such supplement to the
                                        Prospectus relating to the Notes.
                                        The Company will provide the Agents,
                                        the Trustee and [________] with
                                        copies of any such supplement, and
                                        confirm to the Agents that such
                                        supplement has been filed with the
                                        Commission pursuant to the applicable
                                        paragraph of Rule 424(b).
 
 
Procedures For                          When the Company has determined to
- --------------                          
Rate Changes:                           change the interest rates of
- ------------                            
                                        Book-Entry Notes being offered, it will
                                        promptly advise the Agents and the
                                        Agents will forthwith suspend
                                        solicitation of orders. The Agents will
                                        telephone the Company with
                                        recommendations as to the changed
                                        interest rates. At such time as the
                                        Company has advised the Agents of the
                                        new interest rates, the Agents may
                                        resume solicitation of orders. Until
                                        such time only "indications of interest"
                                        may be recorded. Within two Business

                                      -40-
<PAGE>
 
                                        Days after any sale of Book-Entry
                                        Notes, the Company will file with the
                                        Securities and Exchange Commission a
                                        Pricing Supplement to the Prospectus
                                        relating to such Book-Entry Notes
                                        that reflects the applicable interest
                                        rates and other terms and will
                                        deliver copies of such Pricing
                                        Supplement to the Agents.
 
 
Delivery of                             A copy of the Prospectus and a Pricing 
- -----------                             
Prospectus:                             Supplement relating to a Book-Entry Note
- ----------                              
                                        must accompany or precede the earliest
                                        of any written offer of such Book-Entry
                                        Note, confirmation of the purchase of
                                        such Book-Entry Note and payment for
                                        such Book-Entry Note by its purchaser.
                                        If notice of a change in the terms of
                                        the Book-Entry Notes is received by the
                                        Agents between the time an order for a
                                        Book-Entry Note is placed and the time
                                        written confirmation thereof is sent by
                                        the Presenting Agent to a customer or
                                        his agent, such confirmation shall be
                                        accompanied by a Prospectus and a
                                        Pricing Supplement setting forth the
                                        terms in effect when the order was
                                        placed. Subject to "Suspension of
                                        Solicitation; Amendment or Supplement"
                                        above, the Presenting Agent will deliver
                                        a Prospectus and Pricing Supplement as
                                        herein described with respect to each
                                        Book-Entry Note sold by it. The Company
                                        will make such delivery if such Book-
                                        Entry Note is sold directly by the
                                        Company to a purchaser (other than an
                                        Agent).
                                         
Confirmation:                           For each order to purchase a Book-Entry 
- ------------                            
                                        Note solicited by any Agent and accepted
                                        by or on behalf of the Company, the
                                        Presenting Agent will issue a
                                        confirmation to the purchaser, with a
                                        copy to the Company, setting forth the
                                        details set forth above and delivery and
                                        payment instructions.
 
Settlement:                             The receipt by the Company of 
- ----------                              
                                        immediately available funds in payment
                                        for a Book-Entry Note and the
                                        authentication and issuance of the
                                        Global Security representing such

                                      -41-
<PAGE>
 
                                        Book-Entry Note shall constitute
                                        "settlement" with respect to such
                                        Book-Entry Note.  All orders accepted
                                        by the Company will be settled on the
                                        [third] Business Day following the date
                                        of sale of such Book-Entry Note
                                        pursuant to the timetable for
                                        settlement set forth below unless the
                                        Company and the purchaser agree to
                                        settlement on another day which shall
                                        be no earlier than the next Business
                                        Day following the date of sale.
 
Settlement                              Settlement Procedures with regard to
- ----------                              
Procedures:                             each Book-Entry Note sold by the
- ----------                              
                                        Company through any Agent, as agent,
                                        shall be as follows:

                                             A.   The Presenting Agent will
                                                  advise the Company by
                                                  telephone of the following
                                                  settlement information:
 
 
                                                  1.   Principal amount.
 
                                                  2.   Maturity Date and, if
                                                       applicable, the Extension
                                                       Period and Final Maturity
                                                       Date.
 
                                                  3.   In the case of a Fixed
                                                       Rate Book-Entry Note, the
                                                       interest rate or, in the
                                                       case of a Floating Rate
                                                       Book-Entry Note, the Base
                                                       Rate, initial interest
                                                       rate (if known at such
                                                       time), Index Maturity,
                                                       Interest Reset Period,
                                                       Interest Reset Dates,
                                                       Spread or Spread
                                                       Multiplier (if any),
                                                       minimum interest rate (if
                                                       any) and maximum interest
                                                       rate (if any).
 
                                                  4.   In the case of Indexed
                                                       Notes, the Denominated
                                                       Currency, the Indexed
                                                       Currency, the Face
                                                       Amount, the Base Exchange
                                                       Rate, the Determination

                                      -42-
<PAGE>
 
                                                       Agent and the Reference
                                                       Dealers.

                                                  5.   Interest Payment Dates
                                                       and the Interest Payment
                                                       Period.
 
                                                  6.   Optional Reset Date, if
                                                       any.
 
                                                  7.   Redemption provisions, if
                                                       any.
                                                                                
                                                  8.   Repayment provisions, if
                                                       any.
                                                                                
                                                  9.   Settlement Date.
                                                                                
                                                  10.  Price. 
                                                                               
                                                  11.  Presenting Agent's
                                                       commission, determined as
                                                       provided in Section 2 of
                                                       the Agency Agreement.
                                                                                
                                                  12.  Whether such Book-Entry
                                                       Note is issued at an
                                                       original issue discount
                                                       and, if so, the total
                                                       amount of original issue
                                                       discount ("OID"), the
                                                       yield to maturity and the
                                                       initial accrual period
                                                       with respect to OID.
 
                                             B.   The Company will assign a
                                                  CUSIP number to the Global
                                                  Security representing such
                                                  Book-Entry Note and then
                                                  advise [________] by telephone
                                                  (confirmed in writing at any
                                                  time on the same Date) or
                                                  electronic transmission of the
                                                  information set forth in
                                                  Settlement Procedure "A"
                                                  above, such CUSIP number and
                                                  the name of the Presenting
                                                  Agent. The Company will also
                                                  notify the Presenting Agent by
                                                  telephone of such CUSIP number
                                                  as soon as practicable. Each
                                                  such communication by the

                                      -43-
<PAGE>
 
                                                  Company shall constitute a
                                                  representation and warranty by
                                                  the Company to [________], the
                                                  Trustee and the Agents that
                                                  (i) such Book-Entry Note is
                                                  then, and at the time of
                                                  issuance and sale thereof will
                                                  be, duly authorized for
                                                  issuance and sale by the
                                                  Company, (ii) such Book-Entry
                                                  Note, and the Global Security
                                                  representing such Book-Entry
                                                  Note, will conform with the
                                                  terms of the Indenture, (iii)
                                                  after giving effect to the
                                                  issuance of such Book-Entry
                                                  Note and any other Securities
                                                  (as defined in the Agency
                                                  Agreement) to be issued on or
                                                  prior to the settlement date
                                                  for the sale of such Book-
                                                  Entry Note, the aggregate
                                                  amount of Securities which
                                                  have been issued and sold by
                                                  the Company will not exceed
                                                  the amount of Securities
                                                  registered under the
                                                  Registration Statement (as
                                                  defined in the Agency
                                                  Agreement) and (iv) upon
                                                  authentication and delivery of
                                                  such Global Security, the
                                                  aggregate [initial offering
                                                  price][principal amount] of
                                                  all Notes issued under the
                                                  Indenture will not exceed U.S.
                                                  $__________ (excluding the
                                                  amount of any OID) or the
                                                  equivalent thereof in other
                                                  currencies (except for Notes
                                                  authenticated and delivered
                                                  upon registration of transfer
                                                  of, in exchange for, or in
                                                  lieu of Notes pursuant to
                                                  Sections [________] of the
                                                  Indenture).
 
                                             C.   [________] will enter a
                                                  pending deposit message
                                                  through DTC's Participant
                                                  Terminal System providing the
                                                  following settlement

                                      -44-
<PAGE>
 
                                                  information to DTC (which
                                                  shall route such information
                                                  to Standard & Poor's
                                                  Corporation), the Presenting
                                                  Agent and, upon request, the
                                                  Trustee:

                                                  1.   The information set forth
                                                       in Settlement Procedure
                                                       "A".
 
                                                  2.   Identification as a Fixed
                                                       Rate Book-Entry Note or a
                                                       Floating Rate Book-Entry
                                                       Note.
 
                                                  3.   Initial Interest Payment
                                                       Date for such Book-Entry
                                                       Note, number of days by
                                                       which such Date succeeds
                                                       the related Regular
                                                       Record Date (which, in
                                                       the case of Floating Rate
                                                       Notes that reset daily or
                                                       weekly, shall be the DTC
                                                       Record Date, which is the
                                                       date ____ calendar days
                                                       immediately preceding the
                                                       applicable Interest
                                                       Payment Date and, in the
                                                       case of all other Notes,
                                                       shall be the Regular
                                                       Record Date as defined in
                                                       the Notes) and amount of
                                                       interest payable on such
                                                       Interest Payment Date.
 
                                                  4.   The Interest Payment
                                                       Period.
 
                                                  5.   CUSIP number of the
                                                       Global Security
                                                       representing such Book-
                                                       Entry Note.
 
                                                  6.   Whether such Global
                                                       Security will represent
                                                       any other Book-Entry Note
                                                       (to the extent known at
                                                       such time).

                                      -45-
<PAGE>
 
                                                  7.   Numbers of the
                                                       participant accounts
                                                       maintained by DTC on
                                                       behalf of [________], the
                                                       Trustee and the
                                                       Presenting Agent.
 
                                             D.   To the extent the Company has
                                                  not already done so, the
                                                  Company will deliver to the
                                                  Trustee a Global Security in a
                                                  form that has been approved by
                                                  the Company, Ameritech, the
                                                  Agents and the Trustee.
 
                                             E.   The Trustee will complete such
                                                  Book-Entry Note, stamp the
                                                  appropriate legend, as
                                                  instructed by DTC, if not
                                                  already set forth thereon, and
                                                  authenticate the Global
                                                  Security representing such
                                                  Book-Entry Note.
 
                                             F.   DTC will credit such Book-
                                                  Entry Note to [________'s]
                                                  participant account at DTC.
 
                                             G.   [________] will enter an SDFS
                                                  deliver order through DTC's
                                                  Participant Terminal System
                                                  instructing DTC to (i) debit
                                                  such Book-Entry Note to
                                                  [________'s] participant
                                                  account and credit such Book-
                                                  Entry Note to the Presenting
                                                  Agent's participant account
                                                  and (ii) debit the Presenting
                                                  Agent's settlement account and
                                                  credit [________'s] settlement
                                                  account for an amount equal to
                                                  the price of such Book-Entry
                                                  Note less the Presenting
                                                  Agent's commission. The entry
                                                  of such a deliver order shall
                                                  constitute a representation
                                                  and warranty by [________] to
                                                  DTC that (i) the Global
                                                  Security representing such
                                                  Book-Entry Note has been
                                                  issued and authenticated and

                                      -46-
<PAGE>
 
                                                  (ii) [________] is holding
                                                  such Global Security pursuant
                                                  to the Medium-Term Note
                                                  Certificate Agreement between
                                                  [________] and DTC.
 
                                             H.   The Presenting Agent will
                                                  enter an SDFS deliver order
                                                  through DTC's Participant
                                                  Terminal System instructing
                                                  DTC (i) to debit such Book-
                                                  Entry Note to the Presenting
                                                  Agent's participant account
                                                  and credit such Book-Entry
                                                  Note to the participant
                                                  accounts of the Participants
                                                  with respect to such Book-
                                                  Entry Note and (ii) to debit
                                                  the settlement accounts of
                                                  such Participants and credit
                                                  the settlement account of the
                                                  Presenting Agent for an amount
                                                  equal to the price of such
                                                  Book-Entry Note.
 
                                             I.   Transfers of funds in
                                                  accordance with SDFS deliver
                                                  orders described in Settlement
                                                  Procedures "G" and "H" will be
                                                  settled in accordance with
                                                  SDFS operating procedures in
                                                  effect on the settlement date.
 
                                             J.   [________] will, upon receipt
                                                  of funds from the Agent in
                                                  accordance with Settlement
                                                  Procedure "G", credit to an
                                                  account of the Company
                                                  maintained at [________] funds
                                                  available for immediate use in
                                                  the amount transferred to
                                                  [________] in accordance with
                                                  Settlement Procedure "G".
 
                                             K.   The Presenting Agent will
                                                  confirm the purchase of such
                                                  Book-Entry Note to the
                                                  purchaser either by
                                                  transmitting to the
                                                  Participants with respect to
                                                  such Book-Entry Note a

                                      -47-
<PAGE>
 
                                                  confirmation order or orders
                                                  through DTC's institutional
                                                  delivery system or by mailing
                                                  a written confirmation to such
                                                  purchaser.

Settlement                              For orders of Book-Entry Notes solicited
- ----------
Procedures                              by any Agent and accepted by the Company
- ----------                              
Timetable:                              for settlement on the first Business Day
- ---------
                                        after the sale date, Settlement
                                        Procedures "A" through "K" set forth
                                        above shall be completed as soon as
                                        possible but not later than the
                                        respective times (New York City time)
                                        set forth below:

<TABLE> 
<CAPTION> 
                                        Settlement
                                        ----------
                                        Procedure      Time
                                        ---------      ----
                                        <S>            <C>  
                                        A              11:00 A.M. on the sale
                                                          date
                                        B              12:00 Noon on the sale
                                                          date
                                        C              2:00 P.M. on the sale
                                                          date
                                        D              3:00 P.M. on the day
                                                          before settlement
                                        E              9:00 A.M. on settlement
                                                          date
                                        F              10:00 A.M. on settlement
                                                          date
                                        G-H            2:00 P.M. on settlement
                                                          date
                                        I              4:45 P.M. on settlement
                                                          date
                                        J-K            5:00 P.M. on Settlement
                                                          date
</TABLE> 
 
                                        If a sale is to be settled more than one
                                        Business Day after the sale date,
                                        Settlement Procedures "A", "B" and "C"
                                        may be completed not later than 11:00
                                        A.M., 12:00 Noon and 2:00 P.M. on the
                                        Business Day next succeeding the trade
                                        date, respectively. If the initial
                                        interest rate for a Floating Rate Book-
                                        Entry Note has not been determined at
                                        the time that Settlement Procedure "A"
                                        is completed, Settlement Procedures "B"
                                        and "C" shall be completed as soon as
                                        such rate has been determined but not

                                      -48-
<PAGE>
 
                                        later than 12:00 Noon and 2:00 P.M.,
                                        respectively, on the Business Day
                                        next succeeding the trade date.
                                        Settlement Procedure "I" is subject
                                        to extension in accordance with any
                                        extension of Fedwire closing
                                        deadlines and in the other events
                                        specified in SDFS operating
                                        procedures in effect on the
                                        settlement date.
 
                                        If settlement of a Book-Entry Note is
                                        rescheduled or cancelled, [________]
                                        will deliver to DTC, through DTC's
                                        Participant Terminal System, a
                                        cancellation message to such effect
                                        by no later than 2:00 P.M. on the
                                        Business Day immediately preceding
                                        the scheduled settlement date.
 
Failure to Settle:                      If [________] fails to enter an SDFS
- -----------------
                                        deliver order with respect to a Book-
                                        Entry Note pursuant to Settlement
                                        Procedure "G", [________] may deliver to
                                        DTC, through DTC's Participant Terminal
                                        System, as soon as practicable, a
                                        withdrawal message instructing DTC to
                                        debit such Book-Entry Note to
                                        [________'s] participant account. DTC
                                        will process the withdrawal message,
                                        provided that [________'s] participant
                                        account contains a principal amount of
                                        the Global Security representing such
                                        Book-Entry Note that is at least equal
                                        to the principal amount to be debited.
                                        If a withdrawal message is processed
                                        with respect to all the Book-Entry Notes
                                        represented by a Global Security, the
                                        Trustee will cancel such Global Security
                                        in accordance with the Indenture and so
                                        advise the Company and [________], and
                                        [________] will make the appropriate
                                        entries in its records. The CUSIP number
                                        assigned to such Global Security shall,
                                        in accordance with CUSIP Service Bureau
                                        procedures, be cancelled and not
                                        immediately reassigned. If a withdrawal
                                        message is processed with respect to one
                                        or more, but not all, of the Book-Entry
                                        Notes represented by a Global Security,
                                        [________] will exchange such Book-Entry
                                        Note for two Global Securities, one of
                                        which shall represent such Book-Entry

                                      -49-
<PAGE>
 
                                        Notes and shall be canceled immediately
                                        after issuance and the other of which
                                        shall represent the other Book-Entry
                                        Notes previously represented by the
                                        surrendered Global Security and shall
                                        bear the CUSIP number of the surrendered
                                        Global Security.
 
                                        If the purchase price for any Book-Entry
                                        Note is not timely paid to the
                                        Participants with respect to such Note
                                        by the beneficial purchaser thereof (or
                                        a Person, including an indirect
                                        participant in DTC, acting on behalf of
                                        such purchaser), such Participants and,
                                        in turn, the Presenting Agent may enter
                                        SDFS deliver orders through DTC's
                                        Participant Terminal System reversing
                                        the orders entered pursuant to
                                        Settlement Procedures "H" and "G",
                                        respectively. Thereafter, [________]
                                        will deliver the withdrawal message and
                                        take the related actions described in
                                        the preceding paragraph. If such failure
                                        shall have occurred for any reason other
                                        than a default by the Presenting Agent
                                        in the performance of its obligations
                                        hereunder and under the Agency
                                        Agreement, then the Company will
                                        reimburse the Presenting Agent or
                                        [________], as applicable, on an
                                        equitable basis for the loss of the use
                                        of the funds during the period when they
                                        were credited to the account of the
                                        Company.
 
                                        Notwithstanding the foregoing, upon any
                                        failure to settle with respect to a 
                                        Book-Entry Note, DTC may take any
                                        actions in accordance with its SDFS
                                        operating procedures then in effect. In
                                        the event of a failure to settle with
                                        respect to one or more, but not all, of
                                        the Book-Entry Notes to have been
                                        represented by a Global Security,
                                        [________] will provide, in accordance
                                        with Settlement Procedure "E", for the
                                        authentication and issuance of a Global
                                        Security representing the other Book-
                                        Entry Notes to have been represented by
                                        such Global Security and

                                      -50-
<PAGE>
 
                                        will make appropriate entries in its
                                        records.
 
                                        
                                        
Trustee and                             Nothing herein shall be deemed to
- -----------                             
[________]                              require the Trustee or [________] to
- ----------                              
Not to Risk Funds:                      risk or expend its own funds in
- -----------------                       
                                        connection with any payment to the
                                        Company, Ameritech, DTC, the Agents or
                                        the purchaser, it being understood by
                                        all parties that payments made by the
                                        Trustee or [________] to the Company,
                                        Ameritech, DTC, the Agents or the
                                        purchaser shall be made only to the
                                        extent that funds are provided to the
                                        Trustee or [________] for such purpose.
 
 
Authenticity of                         The Company will cause the Trustee to
- ---------------                         
Signatures:                             furnish [________] and the Agents from 
- ----------                              
                                        time to time with the specimen
                                        signatures of each of the Trustee's
                                        officers, employees or agents who has
                                        been authorized by the Trustee to
                                        authenticate Book-Entry Notes, but
                                        neither [________] nor any Agent will
                                        have any obligation or liability to the
                                        Company, Ameritech or the Trustee in
                                        respect of the authenticity of the
                                        signature of any officer, employee or
                                        agent of the Company, Ameritech or the
                                        Trustee on any Book-Entry Note.
 
Payment of Expenses:                    Each Agent shall forward to the
- -------------------                     
                                        Company, on a monthly basis, a statement
                                        of the out-of-pocket expenses incurred
                                        by such Agent during that month that are
                                        reimbursable to it pursuant to the terms
                                        of the Agency Agreement. Subject to the
                                        terms of the Agency Agreement, the
                                        Company will remit payment to the Agents
                                        currently on a monthly basis.
 
Advertising Costs:                      The Company will determine with the
- ------------------
                                        Agents the amount of advertising that
                                        may be appropriate in soliciting offers
                                        to purchase the Book-Entry Notes.
                                        Subject to the terms of the Agency
                                        Agreement, Advertising expenses will be
                                        paid by the Company.

Periodic Statements                     Periodically, [________] will send to
- -------------------
from [________]:                        the Company a statement setting forth
- ---------------
                                        the principal amount of Book-Entry Notes

                                      -51-
<PAGE>
 
                                        Outstanding as of that date and
                                        setting forth a brief description of
                                        any sales of Book-Entry Notes as to
                                        which the Company has advised
                                        [________] but which have not yet
                                        been settled.
 

                                      -52-
<PAGE>
 
                                   PART II 
               Administration Procedures for Certificated Notes
               ------------------------------------------------

          __________ ("[________]") will serve as registrar and transfer agent
in connection with the Certificated Notes.

Issuance:                               Each Certificated Note will be dated
- --------
                                        and issued as of the date of its
                                        authentication by the Trustee. Each
                                        Certificated Note will bear an Original
                                        Issue Date, which will be (i) with
                                        respect to any original Certificated
                                        Note (or any portion thereof), its
                                        original issuance date (which will be
                                        the settlement date) and (ii) with
                                        respect to any Certificated Note (or
                                        portion thereof) issued subsequently
                                        upon transfer or exchange of a
                                        Certificated Note or in lieu of a
                                        destroyed, lost or stolen Certificated
                                        Note, the Original Issue Date of the
                                        predecessor Certificated Note,
                                        regardless of the date of authentication
                                        of such subsequently issued Certificated
                                        Note.
 
Registration:                           Certificated Notes will be issued
- ------------
                                        only in fully registered form without
                                        coupons.
 
Transfers and                           A Certificated Note may be presented
- -------------
for Exchanges:                          for transfer or exchange at the 
- -------------
                                        principal corporate trust office in
                                        Chicago, Illinois of [________].
                                        Certificated Notes will be exchangeable
                                        for other Certificated Notes having
                                        identical terms but different authorized
                                        denominations without service charge.
                                        Certificated Notes will not be
                                        exchangeable for Book-Entry Notes.
 
Maturities:                             Each Certificated Note will mature on
- ----------
                                        a date [________] after the settlement
                                        date for such Note.
 
Denominations:                          The denomination of any Certificated
- -------------
                                        Note denominated in U.S. dollars will be
                                        a minimum of $100,000 or any amount in
                                        excess thereof that is an integral
                                        multiple of $1,000. The authorized
                                        denominations of Certificated Notes

                                      -53-
<PAGE>
 
                                        denominated in any other currency will
                                        be specified pursuant to "Settlement
                                        Procedures" below.
 
Interest:                               General.  Interest, if any, on each
- --------                                -------
                                        Certificated Note will accrue from the
                                        original issue date for the first
                                        interest period or the last date to
                                        which interest has been paid, if any,
                                        for each subsequent interest period, and
                                        will be calculated and paid in the
                                        manner described in such Note and in the
                                        Prospectus, as supplemented by the
                                        applicable Pricing Supplement. Unless
                                        otherwise specified therein, each
                                        payment of interest on a Certificated
                                        Note will include interest accrued to
                                        but excluding the Interest Payment Date
                                        (provided that, in the case of
                                        Certificated Notes which reset daily or
                                        weekly, interest payments will include
                                        accrued interest to and including the
                                        Regular Record Date immediately
                                        preceding the Interest Payment Date) or
                                        to but excluding Maturity (other than a
                                        Maturity of a Fixed Rate Certificated
                                        Note occurring on the 31st day of a
                                        month, in which case such payment of
                                        interest will include interest accrued
                                        to but excluding the 30th day of such
                                        month).
 
                                        Regular Record Dates.  The Regular
                                        --------------------
                                        Record Dates with respect to any
                                        Interest Payment Date shall be the date
                                        fifteen calendar days immediately
                                        preceding such Interest Payment Date.
 
                                        Fixed Rate Certificated Notes. Unless
                                        -----------------------------
                                        otherwise specified pursuant to
                                        Settlement Procedure "A" below, interest
                                        payments on Fixed Rate Certificated
                                        Notes will be made semiannually on
                                        [________] and [________] of each year
                                        or annually on [________] of each year
                                        and at Maturity; provided, however, that
                                                         --------  -------
                                        in the case of a Fixed Rate Certificated
                                        Note issued between a Regular Record
                                        Date and an Interest Payment Date, the
                                        first interest payment will be made on
                                        the Interest Payment Date following the
                                        next succeeding Regular Record Date.

                                      -54-
<PAGE>
 
                                        Floating Rate Certificated Notes.
                                        --------------------------------
                                        Interest payments will be made on
                                        Floating Rate Certificated Notes
                                        monthly, quarterly, semi-annually or
                                        annually. Interest will be payable, in
                                        the case of Floating Rate Certificated
                                        Notes with a monthly Interest Payment
                                        Period, on the third Wednesday of each
                                        month; with a quarterly Interest Payment
                                        Period, on the third Wednesday of March,
                                        June, September and December of each
                                        year; with a semi-annual Interest
                                        Payment Period, on the third Wednesday
                                        of the two months specified pursuant to
                                        Settlement Procedure "A" below; and with
                                        an annual Interest Payment Period, on
                                        the third Wednesday of the month
                                        specified pursuant to Settlement
                                        Procedure "A" below; provided, however,
                                                             --------  -------
                                        that if an Interest Payment Date for a
                                        Floating Rate Certificated Note would
                                        otherwise be a day that is not a
                                        Business Day with respect to such
                                        Floating Rate Certificated Note, such
                                        Interest Payment Date will be the next
                                        succeeding Business Day with respect to
                                        such Floating Rate Certificated Note,
                                        except that in the case of a Floating
                                        Rate Certificated Note for which the
                                        Base Rate is LIBOR, if such Business Day
                                        is in the next succeeding calendar
                                        month, such Interest Payment Date will
                                        be the immediately preceding Business
                                        Day; and provided, further, that in the
                                                 --------  -------
                                        case of a Floating Rate Certificated
                                        Note issued between a Regular Record
                                        Date and an Interest Payment Date, the
                                        first interest payment will be made on
                                        the Interest Payment Date following the
                                        next succeeding Regular Record Date.
 
Calculation of                          Fixed Rate Certificated Note.
- --------------                          ----------------------------
Interest:                               Interest on Fixed Rate Certificated
- --------
                                        Notes (including interest for partial
                                        periods) will be calculated on the basis
                                        of a 360-day year of twelve 30-day
                                        months.
 
                                        Floating Rate Certificated Notes.
                                        --------------------------------
                                        Interest rates on Floating Rate
                                        Certificated Notes will be determined
                                        as referred to in the form of Notes.
                                        Interest on Floating Rate
                                        Certificated

                                      -55-
<PAGE>
 
                                        Notes, except as otherwise set forth
                                        therein, will be calculated on the basis
                                        of actual days elapsed and a year of 360
                                        days, except that in the case of a
                                        Floating Rate Certificated Note for
                                        which the Base Rate is the Treasury
                                        Rate, interest will be calculated on the
                                        basis of the actual number of days in
                                        the year.
 
Payments of                             [________] will pay the principal
- -----------    
Principal and                           amount of each Certified Note at 
- -------------                           
Interest:                               Maturity upon presentation of such
- --------                                
                                        Certificated Note to [________]. Such
                                        payment, together with the payment of
                                        interest due at Maturity of such
                                        Certificated Note, will be made in funds
                                        available for immediate use by
                                        [________] and in turn by the Holder of
                                        such Certificated Note. Certificated
                                        Notes presented to [________] at
                                        Maturity for payment will be cancelled
                                        by the Trustee in accordance with the
                                        Indenture. All interest payments on a
                                        Certificated Note (other than interest
                                        due at Maturity) will be made by check
                                        drawn on [________] (or another Person
                                        appointed by [________]) and mailed by
                                        [________] to the Person entitled
                                        thereto as provided in such Note and the
                                        Indenture; provided, however, that the
                                                   --------  -------
                                        holder of U.S. $10,000,000 (or the
                                        equivalent thereof in other currencies)
                                        or more of Certificated Notes with
                                        similar tenor and terms will be entitled
                                        to receive payment by wire transfer in
                                        U.S. dollars. Following each Regular
                                        Record Date and Special Record Date,
                                        [________] will furnish the Company and
                                        the Trustee with a list of interest
                                        payments to be made on the following
                                        Interest Payment Date for each
                                        Certificated Note and in total for all
                                        Certificated Notes. Interest at Maturity
                                        will be payable to the Person to whom
                                        the payment of principal is payable.
                                        [________] will provide monthly to the
                                        Company lists of principal and interest,
                                        to the extent ascertainable, to be paid
                                        on Certificated Notes maturing (on a
                                        Maturity or Redemption Date or
                                        otherwise) in the next month.

                                      -56-
<PAGE>
 
                                        [________] will be responsible for
                                        withholding taxes on interest paid on
                                        Certificated Notes as required by
                                        applicable law.
 
                                        If any Interest Payment Date for or
                                        the Maturity of a Certificated Note
                                        is not a Business Day, the payment
                                        due on such day shall be made on the
                                        next succeeding Business Day and no
                                        interest shall accrue on such payment
                                        for the period from and after such
                                        Interest Payment Date or Maturity, as
                                        the case may be.
 
Procedure for Rate                      The Company and the Agents will
- ------------------
Setting and Posting:                    discuss from time to time the aggregate 
- -------------------                     
                                        principal amount of, the issuance price
                                        of, and the interest rates to be borne
                                        by, Notes that may be sold as a result
                                        of the solicitation of orders by the
                                        Agents. If the Company decides to set
                                        prices of, and rates borne by, any Notes
                                        in respect of which the Agents are to
                                        solicit orders (the setting of such
                                        prices and rates to be referred to
                                        herein as "posting") or if the Company
                                        decides to change prices or rates
                                        previously posted by it, it will
                                        promptly advise the Agents of the prices
                                        and rates to be posted.
 
Acceptance and                          Unless otherwise instructed by the
- --------------
Rejection of Orders:                    Company, each Agent will advise the
- -------------------                     
                                        Company promptly by telephone of all
                                        orders to purchase Certificated Notes
                                        received by such Agent, other than those
                                        rejected by it in whole or in part in
                                        the reasonable exercise of its
                                        discretion. Unless otherwise agreed by
                                        the Company and the Agents, the Company
                                        has the sole right to accept orders to
                                        purchase Certificated Notes and may
                                        reject any such orders in whole or in
                                        part.
 
Preparation of                          If any order to purchase a
- --------------
Pricing Supplement:                     Certificated Note is accepted by or on 
- ------------------                      
                                        behalf of the Company, the Company will
                                        prepare a pricing supplement (a "Pricing
                                        Supplement") reflecting the terms of
                                        such Certified Note and will arrange to
                                        have ten copies thereof filed with the

                                      -57-
<PAGE>
 
                                        Commission in accordance with the
                                        applicable paragraph of Rule 424(b)
                                        under the Act and will supply at least
                                        ten copies if requested) to the Agent
                                        which presented the order (the
                                        "Presenting Agent"). The Presenting
                                        Agent will cause a Prospectus and
                                        Pricing Supplement to be delivered to
                                        the purchaser of such Certificated Note.
 
                                        In each instance that a Pricing
                                        Supplement is prepared, the Presenting
                                        Agent will affix such Pricing Supplement
                                        to each Prospectus prior to its use.
                                        Outdated Pricing Supplements (other than
                                        those retained for files) will be
                                        destroyed.
 
Suspension of                           The Company may instruct the Agents, or 
- -------------
Solicitation;                           any of them, to suspend at any time for 
- -------------
Amendment of                            any period of time or permanently, the 
- ------------                            
Supplement:                             solicitation of orders to purchase 
- ----------                              
                                        Certificated Notes. Upon receipt of such
                                        instructions, such Agent or Agents will
                                        forthwith suspend solicitation until
                                        such time as the Company has advised
                                        them that such solicitation may be
                                        resumed. In the event that at the time
                                        the Company suspends solicitation of
                                        purchases there shall be any orders
                                        outstanding for settlement, the Company
                                        will promptly advise the Agents, the
                                        Trustee and [________] whether such
                                        orders may be settled and whether copies
                                        of the Prospectus as in effect at the
                                        time of the suspension, together with
                                        the appropriate Pricing Supplement, may
                                        be delivered in connection with the
                                        settlement of such orders. The Company
                                        will have the sole responsibility for
                                        such decision and for any arrangements
                                        that may be made in the event that the
                                        Company determines that such orders may
                                        not be settled or that copies of such
                                        Prospectus may not be so delivered.
 
                                        If the Company decides to amend or
                                        supplement the Registration Statement or
                                        the Prospectus, it will promptly advise
                                        the Agents and furnish the Agents with
                                        the proposed amendments or supplement
                                        and with such certificates and opinions

                                      -58-
<PAGE>
 
                                        as are required, all to the extent
                                        required by and in accordance with the
                                        terms of the Agency Agreement. Subject
                                        to the provisions of the Agency
                                        Agreement, the Company may file with the
                                        Commission any supplement to the
                                        Prospectus relating to the Notes. The
                                        Company will provide the Agents, the
                                        Trustee and [________] with copies of
                                        any such supplement, and confirm to the
                                        Agents that such supplement has been
                                        filed with the Commission pursuant to
                                        the applicable paragraph of Rule 424(b).
 
Procedure for                           When the Company has determined to
- -------------
Rate Changes:                           change the interest rates of 
- ------------
                                        Certificated Notes being offered, it
                                        will promptly advise the Agents and the
                                        Agents will forthwith suspend
                                        solicitation of orders. The Agents will
                                        telephone the Company with
                                        recommendations as to the changed
                                        interest rates. At such time as the
                                        Company has advised the Agents of the
                                        new interest rates, the Agents may
                                        resume solicitation of orders. Until
                                        such time, only "indications of
                                        interest" may be recorded. Within two
                                        business days after any sale of Notes,
                                        the Company will file with the
                                        Securities and Exchange Commission a
                                        Pricing Supplement to the Prospectus
                                        relating to such Notes that reflects the
                                        applicable interest rates and other
                                        terms and will deliver copies of such
                                        Pricing Supplement to the Agents.
 
 
Delivery of                             A copy of the Prospectus and a
- -----------
Prospectus:                             Pricing Supplement relating to a
- ----------                              
                                        Certificated Note must accompany or
                                        precede the earliest of any written
                                        offer of such Certificated Note,
                                        confirmation of the purchase of such
                                        Certificated Note and payment for such
                                        Certificated Note by its purchaser. If
                                        notice of a change in the terms of the
                                        Certificated Notes is received by the
                                        Agents between the time an order for a
                                        Certificated Note is placed and the time
                                        written confirmation thereof is sent by
                                        the Presenting Agent to a customer or
                                        his agent, such confirmation shall be
                                        accompanied by a

                                      -59-
<PAGE>
 
                                        Prospectus and Pricing Supplement
                                        setting forth the terms in effect when
                                        the order was placed. Subject to
                                        "Suspension of Solicitation; Amendment
                                        or Supplement" above, the Presenting
                                        Agent will deliver a Prospectus and
                                        Pricing Supplement as herein described
                                        with respect to each Certificated Note
                                        sold by it. The Company will make such
                                        delivery if such Certificated Note is
                                        sold directly by the Company to a
                                        purchaser (other than any Agent).
 
Confirmation:                           For each order to purchase a 
- ------------
                                        Certificated Note solicited by any Agent
                                        and accepted by or on behalf of the
                                        Company, the Presenting Agent will issue
                                        a confirmation to the purchaser, with a
                                        copy to the Company, setting forth the
                                        details set forth above and delivery and
                                        payment instructions.
 
Settlement:                             The receipt by the Company of 
- ----------
                                        immediately available funds in exchange
                                        for an authenticated Certificated Note
                                        delivered to the Presenting Agency and
                                        the Presenting Agent's delivery of such
                                        Certificated Note against receipt of
                                        immediately available funds shall, with
                                        respect to such Certificated Note,
                                        constitute "settlement". All orders
                                        accepted by the Company will be settled
                                        on the [third] Business Day following
                                        the date of sale pursuant to the
                                        timetable for settlement set forth
                                        below, unless the Company and the
                                        purchaser agree to settlement on another
                                        day which shall be no earlier than the
                                        next Business Day following the date of
                                        sale.
 
Settlement                              Settlement Procedures with regard to
- ----------
Procedures:                             each Certificated Note sold by the
- -----------                             
                                        Company through any Agent, as agent,
                                        shall be as follows:
 
                                        A.   The Presenting Agent will advise
                                             the Company by telephone of the
                                             following settlement information:
 
                                             1.   Name in which such
                                                  Certificated Note is to be

                                      -60-
<PAGE>
 
                                                  registered ("Registered
                                                  Owner").
 
                                             2.   Address of the Registered
                                                  Owner and address for payment
                                                  of principal and interest.
 
                                             3.   Taxpayer identification number
                                                  of the Registered Owner (if
                                                  available).
 
                                             4.   Principal amount.
 
                                             5.   Maturity Date and, if
                                                  applicable, the Extension
                                                  Period and Final Maturity
                                                  Date.
 
                                             6.   In the case of a Fixed Rate
                                                  Certificated Note, the
                                                  interest rate or, in the case
                                                  of a Floating Rate
                                                  Certificated Note, the initial
                                                  interest rate (if known at
                                                  such time), Base Rate, Index
                                                  Maturity, Interest Reset
                                                  Period, Interest Reset Dates,
                                                  Spread or Spread Multiplier
                                                  (if any), minimum interest
                                                  rate (if any) and maximum
                                                  interest rate (if any).
 
                                             7.   In the case of Indexed Notes,
                                                  the Denominated Currency, the
                                                  Indexed Currency, the Face
                                                  Amount, the Base Exchange
                                                  Rate, the Determination Agent
                                                  and the Reference Dealers.
 
                                             8.   Interest Payment Dates and the
                                                  Interest Payment Period.
 
                                             9.   Specified Currency and whether
                                                  the option to elect payments
                                                  in a Specified Currency
                                                  applies and if the Specified
                                                  Currency is not U.S. dollars,
                                                  the authorized denominations.
 
                                             10.  Optional Reset Date, if any.
 
                                             11.  Redemption provisions, if any.
 

                                      -61-
<PAGE>
 
                                             12.  Repayment provisions, if any.
 
                                             13.  Settlement date.
 
                                             14.  Price (including currency).
 
                                             15.  Presenting Agent's commission,
                                                  determined as provided in
                                                  Section 2 of the Agency
                                                  Agreement.
 
                                             16.  Whether such Certificated Note
                                                  is issued at an original issue
                                                  discount, and, if so, the
                                                  total amount of OID, the yield
                                                  to maturity and the initial
                                                  accrual period OID.
 
                                        B.   The Company will advise [________]
                                             by telephone (confirmed in writing
                                             at any time on the sale date) or
                                             electronic transmission of the
                                             information set forth in Settlement
                                             Procedure "A" above and the name of
                                             the Presenting Agent. Each such
                                             communication by the Company shall
                                             constitute a representation and
                                             warranty by the Company to
                                             [________], the Trustee and the
                                             Agents that (i) such Certificated
                                             Note is then, and at the time of
                                             issuance and sale thereof will be,
                                             duly authorized for issuance and
                                             sale by the Company, (ii) such
                                             Certificated Note will conform with
                                             the terms of the Indenture, (iii)
                                             after giving effect to the issuance
                                             of such Certificated Note and any
                                             other Securities (as defined in the
                                             Agency Agreement) to be issued on
                                             or prior to the settlement date for
                                             the sale of such Certificated Note,
                                             the aggregate amount of Securities
                                             which have been issued and sold by
                                             the Company will not exceed the
                                             amount of Securities registered
                                             under the Registration Statement
                                             (as defined in the Agency
                                             Agreement) and (iv) upon
                                             authentication and delivery of such
                                             Certificated Note, the aggregate
                                             [initial offering price][principal

                                      -62-
<PAGE>
 
                                             amount] of all Notes issued under
                                             the Indenture will not exceed U.S.
                                             $__________ (excluding the amount
                                             of any OID) or the equivalent
                                             thereof in other currencies (except
                                             for Notes authenticated and
                                             delivered upon registration of
                                             transfer of, in exchange for, or in
                                             lieu of Notes pursuant to Sections
                                             [________] of the Indenture).
 
                                        C.   The Company will deliver to
                                             [________] a pre-printed five-ply
                                             packet for such Certificated Note,
                                             which packet will contain the
                                             following documents in forms that
                                             have been approved by the Company,
                                             Ameritech, the Agents and the
                                             Trustee:
 
                                             1.   Certificated Note with
                                                  customer confirmation.
 
                                             2.   Stub One - For the Trustee.
 
                                             3.   Stub Two - For the Agent.
 
                                             4.   Stub Three - For the Company.
 
                                             5.   Stub Four - For Ameritech.
 
                                        D.   The Trustee will complete such
                                             Certificated Note and will
                                             authenticate such Certificated Note
                                             and deliver it (with the
                                             confirmation) and Stubs One and Two
                                             to the Presenting Agent, and the
                                             Presenting Agent will acknowledge
                                             receipt of the Note by stamping or
                                             otherwise marking Stub One and
                                             returning it to the Trustee. Such
                                             delivery will be made only against
                                             such acknowledgment of receipt and
                                             evidence that instructions have
                                             been given by the Presenting Agent
                                             for payment to the account of the
                                             Company at [bank name, city, state]
                                             in funds available for immediate
                                             use, of an amount equal to the
                                             price of such Certificated Note
                                             less the Presenting Agent's
                                             commission. In the event that the

                                      -63-
<PAGE>
 
                                             instructions given by the
                                             Presenting Agent for payment to the
                                             account of the Company are revoked,
                                             the Company will as promptly as
                                             possible wire transfer to the
                                             account of the Presenting Agent an
                                             amount of immediately available
                                             funds equal to the amount of such
                                             payment made.

                                        E.   The Presenting Agent will deliver
                                             such Certificated Note (with the
                                             confirmation) to the customer
                                             against payment in immediately
                                             payable funds. The Presenting Agent
                                             will obtain the acknowledgement of
                                             receipt of such Certificated Note
                                             by retaining Stub Two.
 
                                        F.   [________] will send Stub Three to
                                             the Company by first-class mail.
 
Settlement                              For orders of Certificated Notes
- ----------
Procedures                              solicited by any Agent, as agent, and
- ----------
Timetable:                              accepted by the Company, Settlement
- ---------
                                        Procedures "A" through "F" set forth
                                        above shall be completed on or before
                                        the respective times (New York City
                                        time) set forth below:

<TABLE> 
<CAPTION> 
                                        Settlement
                                        Procedure      Time
                                        ---------      ----
                                        <S>            <C> 
                                         A             2:00 P.M. on the day
                                                         before settlement
                                        B-C            3:00 P.M. on the day
                                                         before settlement
                                         D             2:15 P.M. on settlement
                                                         date
                                         E             3:00 P.M. on settlement
                                                         date
                                         F             5:00 P.M. on settlement
                                                         date
</TABLE> 

Failure to                              If a purchaser fails to accept delivery 
- ----------
Settle:                                 of and make payment for any Certificated
- ------
                                        Note, the Presenting Agent will notify
                                        the Company and [________] by telephone
                                        and return such Certificated Note to the
                                        Trustee. Upon receipt of such notice,
                                        the Company will immediately wire

                                      -64-
<PAGE>
 
                                        transfer to the account of the
                                        Presenting Agent an amount equal to the
                                        amount previously credited to the
                                        account of the Company in respect of
                                        such Certificated Note. Such wire
                                        transfer will be made on the settlement
                                        date, if possible, and in any event not
                                        later than the Business Day following
                                        the settlement date. If the failure
                                        shall have occurred for any reason other
                                        than a default by the Presenting Agent
                                        in the performance of its obligations
                                        hereunder and under the Agency
                                        Agreement, then the Company will
                                        reimburse the Presenting Agent or
                                        [________], as appropriate, on an
                                        equitable basis for its loss of the use
                                        of the funds during the period when they
                                        were credited to the account of the
                                        Company. Immediately upon receipt of the
                                        Certificated Note in respect of which
                                        such failure occurred, the Trustee will
                                        cancel such Certificated Note in
                                        accordance with the Indenture and so
                                        advise the Company and [________] and
                                        [________] will make appropriate entries
                                        in its records.
 
Trustee and                             Nothing herein shall be deemed to
- -----------
[________]                              require the Trustee or [________] to
- ----------
Not to Risk Funds:                      risk or expend its own funds in
- -----------------
                                        connection with any payment to the
                                        Company, the Agents or the purchaser, it
                                        being understood by all parties that
                                        payments made by the Trustee or
                                        [________] to the Company, Ameritech,
                                        the Agents or the purchaser shall be
                                        made only to the extent that funds are
                                        provided to the Trustee, Ameritech or
                                        [________] for such purpose.
 
Authenticity of                         The Company will cause the Trustee to
- ---------------
Signatures:                             furnish [________] and the Agents
- ----------                              
                                        from time to time with the specimen
                                        signatures of each of the Trustee's
                                        officers, employees or agents who has
                                        been authorized by the Trustee to
                                        authenticate Certificated Notes, but
                                        neither [________] nor any Agent will
                                        have any obligation or liability to the
                                        Company or the Trustee in respect of the
                                        authenticity of the signature of any

                                      -65-
<PAGE>
 
                                        officer, employee or agent of the
                                        Company or the Trustee on any
                                        Certificated Note.

 
Payment of                              Each Agent shall forward to the Company,
- ----------
Expenses:                               on a monthly basis, a statement of the
- --------                                
                                        out-of-pocket expenses incurred by such
                                        Agent during that month that are
                                        reimbursable to it pursuant to the terms
                                        of the Agency Agreement. Subject to the
                                        terms of the Agency Agreement, the
                                        Company will remit payment to the Agents
                                        currently on a monthly basis.
 
Advertising Costs:                      The Company will determine with the
- -----------------
                                        Agents the amount of advertising that
                                        may be appropriate in soliciting orders
                                        to purchase the Certificated Notes.
                                        Subject to the terms of the Agency
                                        Agreement, advertising expenses will be
                                        paid by the Company.
                                        
Periodic Statements                     Periodically, [________] will send to
- -------------------
from [________]:                        the Company a statement setting forth
- ---------------                         
                                        the principal amount of Certificated
                                        Notes Outstanding as of that date and
                                        setting forth a brief description of any
                                        sales of Certificated Notes as to which
                                        the Company has advised [________] but
                                        which have not yet been settled.

                                      -66-
<PAGE>
 
                     Ameritech Capital Funding Corporation

                   $__________ Medium-Term Notes, Series __
                                Due __________
                              From Date of Issue

                         Unconditionally Guaranteed by

                             Ameritech Corporation

                                TERMS AGREEMENT

                                                            ______________, 19__


Ameritech Capital Funding Corporation
30 South Wacker Drive
Chicago, Illinois 60606

Attention:

          Subject in all respects to the terms and conditions of the Selling
Agency Agreement (the "Agreement") dated __________ __, ____, among __________,
and you and Ameritech Corporation, the undersigned agrees to purchase the
following Notes of Ameritech Capital Funding Corporation:

Aggregate Principal Amount:

Date of Maturity:

Purchase Price:                                   % of Principal Amount [plus
                                                     accrued interest from  
                                                       __________, 19__]    


Interest Rate Provisions:

Purchase Date and Time:

Place for Delivery of Notes
and Payment Therefor:

Commission:

Method of Payment:

                                      -67-
<PAGE>
 
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:

Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:

Modification, if any, to
Section 4(h) as to payment
of expenses of Purchaser:

Other Terms:


                                                   [Purchaser]              
                                                                           
                                                   By: _____________________ 



Accepted:

By: ____________________________
    Title:

                                      -68-

<PAGE>
 
                                                                     EXHIBIT 1-B
                                                                     -----------



                     AMERITECH CAPITAL FUNDING CORPORATION

                                DEBT SECURITIES

                         UNCONDITIONALLY GUARANTEED BY

                             AMERITECH CORPORATION

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

                                                           ____________ __, ____

To the Representatives of the
  several Underwriters named in the
  respective Pricing Agreements
  hereinafter described.

Dear Sirs:

          From time to time Ameritech Capital Funding Corporation, a Delaware
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities"). The Securities will be guaranteed
unconditionally as to payments of principal, premium, if any, and interest (the
"Guarantees") by Ameritech Corporation ("Ameritech").

          The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.

          1.  Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any
<PAGE>
 
of the Securities or as an obligation of any of the Underwriters to purchase the
Securities.  The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the currency of
such Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.

          2.  The Company and Ameritech jointly and severally represent and
warrant to and agree with each of the Underwriters that:

          (a) A joint registration statement in respect of the Securities and
     the Guarantees has been filed with the Securities and Exchange Commission
     (the "Commission"); such registration statement and any post-effective
     amendment thereto, each in the form heretofore delivered or to be delivered
     to the Representatives and, excluding exhibits to such registration
     statement but including all documents incorporated by reference in the
     prospectus contained therein, to the Representatives for each of the other
     Underwriters, have been declared effective by the Commission in such form;
     no other document with respect to such registration statement or document
     incorporated by reference therein has heretofore been filed or transmitted
     for filing with the Commission; and no stop order suspending the
     effectiveness of such registration statement has been issued and no
     proceeding for that purpose has been initiated or threatened by the
     Commission (any preliminary prospectus included in such registration
     statement or filed with the Commission pursuant to Rule 424(a) of the rules
     and regulations of the Commission under the Securities Act of 1933, as
     amended (the "Act"), being hereinafter called a "Preliminary Prospectus";
     the various parts of such registration statement, including all exhibits
     thereto (other than the Form T-1, as hereinafter defined) and the documents
     incorporated by reference in the

                                      -2-
<PAGE>
 
     prospectus contained in the registration statement at the time such part of
     the registration statement was declared effective, each as amended at the
     time such part became effective, being hereinafter collectively called the
     "Registration Statement"; the prospectus relating to the Securities, in the
     form in which it has most recently been filed, or transmitted for filing,
     with the Commission on or prior to the date of this Agreement, being
     hereinafter called the "Prospectus"; any reference herein to any
     Preliminary Prospectus or the Prospectus shall be deemed to refer to and
     include the documents incorporated by reference therein pursuant to the
     applicable form under the Act, as of the date of such Preliminary
     Prospectus or Prospectus, as the case may be; any reference to any
     amendment or supplement to any Preliminary Prospectus or the Prospectus
     shall be deemed to refer to and include any documents filed after the date
     of such Preliminary Prospectus or Prospectus, as the case may be, under the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
     incorporated by reference in such Preliminary Prospectus or Prospectus, as
     the case may be; any reference to any amendment to the Registration
     Statement shall be deemed to include any annual report of Ameritech filed
     pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective
     date of the Registration Statement that is incorporated by reference in the
     Registration Statement; and any reference to the Prospectus as amended or
     supplemented shall be deemed to refer to the Prospectus as amended or
     supplemented in relation to the applicable Designated Securities in the
     form in which it is filed with the Commission pursuant to Rule 424 under
     the Act in accordance with Section 5(a) hereof, including any documents
     incorporated by reference therein as of the date of such filing);

          (b) The documents incorporated by reference in the Prospectus, when
     they became effective or were filed with the Commission, as the case may
     be, conformed in all material respects to the requirements of the Act or
     the Exchange Act, as applicable, and the rules and regulations of the
     Commission thereunder, and none of such documents contained an untrue
     statement of a material fact or omitted to state a material fact required
     to be stated therein or necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading; and
     any further documents so filed and incorporated by reference in the
     Prospectus or any further amendment or supplement thereto, when such
     documents become effective or are filed with the Commission, as the case
     may be, will conform in all material respects to the requirements of the
     Act or the Exchange Act, as applicable, and the rules and regulations of
     the Commission thereunder and will not contain an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein not

                                      -3-
<PAGE>
 
     misleading; provided, however, that this representation and warranty shall
     not apply to any statements or omissions made in reliance upon and in
     conformity with information furnished in writing to the Company or
     Ameritech by an Underwriter of Designated Securities through the
     Representatives expressly for use in the Prospectus as amended or
     supplemented relating to such Securities;

          (c) The Registration Statement and the Prospectus conform, and any
     further amendments or supplements thereto will conform, in all material
     respects to the applicable requirements of the Act and the Trust Indenture
     Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
     regulations of the Commission thereunder and do not and will not, as of the
     applicable effective date as to the Registration Statement and any
     amendment thereto and as of the applicable filing date as to the Prospectus
     and any amendment or supplement thereto, contain an untrue statement of a
     material fact or omit to state a material fact required to be stated
     therein or necessary to make the statements therein, in the light of the
     circumstances under which they were made, not misleading; provided,
     however, that this representation and warranty shall not apply to (i) that
     part of the Registration Statement which shall constitute the Statement of
     Eligibility (Form T-1) of the Trustee under the Trust Indenture Act (the
     "Form T-1") or (ii) any statements or omissions made in reliance upon and
     in conformity with information furnished in writing to the Company or
     Ameritech by an Underwriter of Designated Securities through the
     Representatives expressly for use in the Prospectus as amended or
     supplemented relating to such Securities;

          (d) The filing of the Registration Statement with respect to the
     Securities and the Guarantees has been duly authorized by the Company and
     Ameritech; when Designated Securities are issued and delivered pursuant to
     this Agreement and the Pricing Agreement with respect to such Designated
     Securities, such Designated Securities will have been duly executed,
     authenticated, issued and delivered by the Company and will constitute
     legal, valid and binding obligations of the Company entitled to the
     benefits provided by the Indenture, which will be substantially in the form
     filed as an exhibit to the Registration Statement; when the Guarantees are
     endorsed on Designated Securities which are issued and delivered pursuant
     to this Agreement and the Pricing Agreement with respect to such Designated
     Securities, such Guarantees will have been duly executed and delivered and
     will constitute legal, valid and binding obligations of Ameritech
     enforceable in accordance with their terms; the Indenture has been duly
     authorized by the Company and Ameritech and, at each Time of Delivery (as
     defined in Section 4 hereof) for such Designated Securities the Indenture
     will be duly qualified under the

                                      -4-
<PAGE>
 
     Trust Indenture Act and will constitute a legal, valid and binding
     instrument of the Company and Ameritech, enforceable in accordance with its
     terms; and the Indenture conforms, and the Designated Securities and the
     Guarantees will conform, to the descriptions thereof in the Prospectus as
     amended or supplemented with respect to such Designated Securities.  The
     foregoing representations are subject, as to enforcement of remedies, to
     applicable bankruptcy, reorganization, insolvency, moratorium and other
     laws affecting creditors' rights generally from time to time in effect and
     to general equitable principles.

     3.   Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.

     4.   Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such areas
as the Representatives may request upon at least forty-eight hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor, payable to the
Company in the funds specified in such Pricing Agreement, all at the place and
time and date specified in such Pricing Agreement or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "Time of Delivery" for such
Securities.

     5.   The Company and Ameritech jointly and severally agree with each of the
Underwriters of any Designated Securities:

          (a) To prepare the Prospectus as amended or supplemented in relation
     to the applicable Designated Securities in a form approved by the
     Representatives and to file such Prospectus pursuant to Rule 424(b) under
     the Act, within the applicable time period prescribed for such filing,
     following the execution and delivery of the Pricing Agreement relating to
     the applicable Designated Securities or, if applicable, such other time as
     may be required by Rule 424(b); to make no further amendment or any
     supplement to the Registration Statement or Prospectus as amended or
     supplemented after the date of the Pricing Agreement relating to such
     Designated Securities and prior to the Time of Delivery which shall be
     disapproved upon a reasonable basis by the Representatives promptly after
     reasonable notice thereof; to advise the Representatives promptly of any
     such amendment or supplement

                                      -5-
<PAGE>
 
     after such Time of Delivery for such Designated Securities and furnish the
     Representatives with copies thereof; to file promptly all reports and any
     definitive proxy or information statements required to be filed by the
     Company or Ameritech with the Commission pursuant to Section 13(a), 13(c),
     14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus
     is required in connection with the offering or sale of such Securities or
     the Guarantees, and during such same period to advise the Representatives,
     promptly after either of them receives notice thereof, of the time when any
     amendment to the Registration Statement has been filed or becomes effective
     or any supplement to the Prospectus or any amended Prospectus has been
     filed, of the issuance by the Commission of any stop order or of any order
     preventing or suspending the use of any prospectus relating to the
     Securities, of the suspension of the qualification of such Securities for
     offering or sale in any jurisdiction, of the initiation or threatening of
     any proceeding for any such purpose, or any request by the Commission for
     the amending or supplementing of the Registration Statement or Prospectus
     or for additional information; and, in the event of the issuance of any
     such stop order or of any such order preventing or suspending the use of
     any prospectus relating to the Securities or suspending any such
     qualification, to use promptly their best efforts to obtain its withdrawal;

          (b) Promptly from time to time to take such action as the
     Representatives may reasonably request to qualify such Securities and the
     Guarantees for offering and sale under the securities laws of such
     jurisdictions as the Representatives may request and to comply with such
     laws so as to permit the continuance of sales and dealings therein in such
     jurisdictions for as long as may be necessary to complete the distribution
     of such Securities and the Guarantees, provided that in connection
     therewith neither the Company nor Ameritech shall be required to qualify as
     a foreign corporation or to file a general consent to service of process in
     any jurisdiction;

          (c) To furnish the Underwriters with copies of the Prospectus as
     amended or supplemented in such quantities as the Representatives may from
     time to time reasonably request, and, if the delivery of a prospectus is
     required at any time in connection with the offering or sale of the
     Securities and if at such time any event shall have occurred as a result of
     which the Prospectus as then amended or supplemented would include an
     untrue statement of a material fact or omit to state any material fact
     necessary in order to make the statements therein, in the light of the
     circumstances under which they were made when such Prospectus is delivered,
     not misleading, or, if for any other reason it shall be necessary during
     such same period to amend or supplement the Prospectus

                                      -6-
<PAGE>
 
     or to file under the Exchange Act any document incorporated by reference in
     the Prospectus in order to comply with the Act, the Exchange Act or the
     Trust Indenture Act, to notify the Representatives and upon their request
     to file such document and to prepare and furnish without charge to each
     Underwriter and to any dealer in securities as many copies as the
     Representatives may from time to time reasonably request of an amended
     Prospectus or a supplement to the Prospectus which will correct such
     statement or omission or effect such compliance;

          (d) To make generally available to Ameritech's security-holders as
     soon as practicable, but in any event not later than eighteen months after
     the effective date of the Registration Statement (as defined in Rule
     158(c)), an earnings statement of Ameritech and its subsidiaries (which
     need not be audited) complying with Section 11(a) of the Act and the rules
     and regulations of the Commission thereunder (including, at the option of
     the Company, Rule 158); and

          (e) During the period beginning from the date of the Pricing Agreement
     for such Designated Securities and continuing to and including the earlier
     of (i) the termination of trading restrictions, if any, for such Designated
     Securities, as notified to the Company and Ameritech by the Representatives
     named in Schedule II to the Pricing Agreement for such Designated
     Securities, and (ii) the Time of Delivery for such Designated Securities,
     not to offer, sell, contract to sell or otherwise dispose of (A) any debt
     securities of the Company or Ameritech which mature more than one year
     after such Time of Delivery and which are substantially similar to such
     Designated Securities or (B) any guarantee by Ameritech of debt securities
     which mature more than one year after such Time of Delivery and which are
     substantially similar to such Designated Securities, in either case,
     without the prior written consent of the Representatives.

     6.   The Company and Ameritech jointly and severally covenant and agree
with the several Underwriters that the Company or Ameritech will pay or cause to
be paid the following: (i) the fees, disbursements and expenses of the Company's
and Ameritech's counsel and accountants in connection with the registration of
the Securities and the Guarantees under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the Securities and the
Guarantees; (iii) all expenses in connection

                                      -7-
<PAGE>
 
with the qualification of the Securities and the Guarantees for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees (not in excess of $5,000 for the Designated Securities issued under the
Pricing Agreement relating to such Designated Securities) and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and Legal Investment Memoranda; (iv) any fees
charged by securities rating services for rating the Securities; (v) any filing
fees incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities and the Guarantees;
(vi) the cost of preparing the Securities; (vii) the fees and expenses of any
Trustee and any agent of any Trustee and the fees and disbursements of counsel
for any Trustee in connection with any Indenture and the Securities; and (viii)
all other costs and expenses incident to the performance of their respective
obligations hereunder which are not otherwise specifically provided for in this
Section.  It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.

     7.   The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company and Ameritech
herein are, at and as of the Time of Delivery for such Designated Securities,
true and correct, the condition that the Company and Ameritech shall have
performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:

          (a) The Prospectus as amended or supplemented in relation to the
     applicable Designated Securities shall have been filed with the Commission
     pursuant to Rule 424(b) within the applicable time period prescribed for
     such filing by the rules and regulations under the Act and in accordance
     with Section 5(a) of this Agreement; no stop order suspending the
     effectiveness of the Registration Statement shall have been issued and no
     proceeding for that purpose shall have been initiated or threatened by the
     Commission; and all requests for additional information on the part of the
     Commission shall have been complied with to the Representatives' reasonable
     satisfaction;

          (b) Mayer, Brown & Platt, counsel for the Underwriters, or such other
     counsel acting for the Underwriters, shall have furnished to the
     Representatives such opinion or opinions, dated the Time of Delivery for
     such Designated Securities, with respect to the incorporation of each of
     the Company and

                                      -8-
<PAGE>
 
     Ameritech, the validity of the Indenture, the Designated Securities, the
     Guarantees, the Registration Statement, the Prospectus as amended or
     supplemented and such other related matters as the Representatives may
     reasonably request, and such counsel shall have received such documents and
     information as they may reasonably request to enable them to pass upon such
     matters;

          (c) The Company and Ameritech shall have furnished to the
     Representatives the opinion of Winston & Strawn, counsel for the Company
     and Ameritech, or such other counsel reasonably satisfactory to the
     Representatives, dated the Time of Delivery for such Designated Securities,
     in form and substance reasonably satisfactory to the Representatives, to
     the effect that:

               (i) the Designated Securities, the Guarantees and the Indenture
          conform to the descriptions thereof contained in the Prospectus as
          amended or supplemented;

              (ii) the Indenture has been duly qualified under the Trust
          Indenture Act;

              (iii)  the Registration Statement has become effective under the
          Act; any required filing of the Prospectus, and any supplements
          thereto, pursuant to Rule 424(b) has been made in the manner and
          within the time period required by Rule 424(b); to the best knowledge
          of such counsel, no stop order suspending the effectiveness of the
          Registration Statement has been issued, no proceedings for that
          purpose have been instituted or threatened, and the Registration
          Statement and the Prospectus as amended or supplemented and, if any,
          any further amendments and supplements thereto made by the Company or
          Ameritech prior to the Time of Delivery for the Designated Securities
          (other than material incorporated by reference therein, the financial
          statements and other financial and statistical information contained
          therein and the Statement of Eligibility of the Trustee (Form T-1)
          under the Trust Indenture Act, as to which such counsel need express
          no opinion) comply as to form in all material respects with the
          applicable requirements of the Act and the Exchange Act and the
          respective rules thereunder; and such counsel has no reason to believe
          that the Registration Statement at its effective date contained any
          untrue statement of a material fact or omitted to state any material
          fact required to be stated therein or necessary to make the statements
          therein not misleading or that, as of its date, the Prospectus as
          amended or supplemented and any further amendments and supplements
          thereto made by the Company or Ameritech (other than financial
          statements and other financial and statistical

                                      -9-
<PAGE>
 
          information contained therein and the Statement of Eligibility of the
          Trustee (Form T-1) under the Trust Indenture Act, as to which such
          counsel need express no opinion) includes any untrue statement of a
          material fact or omits to state a material fact necessary to make the
          statements therein, in light of the circumstances under which they
          were made, not misleading; and

              (iv) assuming continued compliance with Rule 3a-5 under the
          Investment Company Act of 1940, as amended (the "Investment Company
          Act"), the Company is exempt from the provisions of the Investment
          Company Act, and Ameritech is not an "investment company" within the
          meaning of such Act.

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws other than the laws of the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are reasonably satisfactory to
counsel for the Representatives, (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company and Ameritech and
public officials and (C) as to certain matters relating to the legality of the
issuance of the Designated Securities and the Guarantees, on the opinion of the
counsel specified in subparagraph (d) below.

     (d) The Company and Ameritech shall have furnished to the Representatives
the opinion of the General Counsel, the Associate General Counsel, a Counsel or
a General Attorney of Ameritech, dated the Time of Delivery of the Designated
Securities, in form and substance reasonably satisfactory to the
Representatives, to the effect that:

          (i) each of the Company and Ameritech and Illinois Bell Telephone
     Company, Indiana Bell Telephone Company, Incorporated, Michigan Bell
     Telephone Company, The Ohio Bell Telephone Company and Wisconsin Bell, Inc.
     (individually a "Significant Subsidiary" and collectively the "Significant
     Subsidiaries") has been duly incorporated and is validly existing as a
     corporation in good standing under the laws of the jurisdiction in which it
     is chartered or organized, with full corporate power and authority to own
     its properties and conduct its business as described in the Prospectus as
     amended or supplemented or in any further amendments or supplements thereto
     made by the Company or Ameritech prior to the Time of Delivery for the
     Designated Securities, and is duly qualified to do business as a foreign
     corporation and is in good standing under the laws of each jurisdiction
     which requires such qualification, except where the failure to be so
     qualified would not have a material adverse affect on the

                                      -10-
<PAGE>
 
     condition (financial or other), earnings, business or property of Ameritech
     and its subsidiaries taken as a whole;

         (ii) all the outstanding shares of capital stock of each Significant
     Subsidiary and the Company have been duly and validly authorized and issued
     and are fully paid and nonassessable, and, except as otherwise set forth in
     the Prospectus as amended or supplemented, all outstanding shares of
     capital stock of the Significant Subsidiaries and of the Company are owned
     by Ameritech free and clear of any perfected security interest and, to the
     knowledge of such counsel, after due inquiry, any other security interests,
     claims, liens or encumbrances;

        (iii)  to the best knowledge of such counsel, there is no pending or
     threatened action, suit or proceeding before any court or governmental
     agency, authority or body or any arbitrator involving the Company,
     Ameritech or any of its subsidiaries, of a character required to be
     disclosed in the Registration Statement which is not adequately disclosed
     in the Prospectus as amended or supplemented, and there is no franchise,
     contract or other document of a character required to be described in the
     Registration Statement or Prospectus as amended or supplemented, or to be
     filed as an exhibit, which is not described or filed as required; and the
     statements included or incorporated in the Prospectus as amended or
     supplemented describing any legal proceedings or material contracts or
     agreements relating to the Company or Ameritech fairly summarize such
     matters;

         (iv) no consent, approval, authorization or order of any court or
     governmental agency or body is required for the consummation of the
     transactions contemplated in this Agreement except such as have been
     obtained under the Act and such as may be required under the blue sky laws
     of any jurisdiction in connection with the sale of the Designated
     Securities or the Guarantees as contemplated by this Agreement and the
     Pricing Agreement with respect to the Designated Securities and such other
     approvals (specified in such opinion) as have been obtained;

          (v) neither the execution and delivery of the Indenture, the issue and
     sale of the Designated Securities and the Guarantees nor the consummation
     of any other of the transactions contemplated in this Agreement nor the
     fulfillment of the terms hereof or the Pricing Agreement with respect to
     the Designated Securities will conflict with, result in a breach of, or
     constitute a default under, the charter or by-laws of the Company or
     Ameritech or the terms of any indenture or other material agreement or
     material instrument known to such counsel and to which the Company or
     Ameritech or any of its subsidiaries is a party or bound, or

                                      -11-
<PAGE>
 
     any order or regulation known to such counsel to be applicable to the
     Company or Ameritech or any of its Significant Subsidiaries of any court,
     regulatory body, administrative agency, governmental body or arbitrator
     having jurisdiction over the Company or Ameritech or any Significant
     Subsidiary;

          (vi) the Guarantees have been duly authorized, executed, issued and
     delivered by Ameritech and constitute the legal, valid and binding
     obligations of Ameritech enforceable in accordance with their terms
     (subject, as to enforcement of remedies, to applicable bankruptcy,
     reorganization, insolvency, moratorium or other laws affecting creditors'
     rights generally from time to time in effect and to general equitable
     principles);

          (vii)  the Indenture has been duly authorized, executed and delivered
     by the Company and Ameritech, and constitutes a legal, valid and binding
     instrument enforceable against the Company and Ameritech in accordance with
     its terms (subject, as to enforcement of remedies, to applicable
     bankruptcy, reorganization, insolvency, moratorium or other laws affecting
     creditors' rights generally from time to time in effect and to general
     equitable principles); and the Designated Securities have been duly
     authorized, executed, issued and delivered by the Company and, when
     authenticated in accordance with the provisions of the Indenture, will
     constitute the legal, valid and binding obligations of the Company entitled
     to the benefits of the Indenture;

          (viii)  this Agreement and the Pricing Agreement with respect to the
     Designated Securities have been duly authorized, executed and delivered by
     the Company and Ameritech; and

          (ix)  to the best knowledge of such counsel, the material incorporated
     by reference into the Registration Statement and the Prospectus as amended
     and supplemented (other than the financial statements and other financial
     and statistical information contained therein as to which such counsel need
     express no opinion) comply as to form in all material respects with the
     applicable requirements of the Act and the Exchange Act and the respective
     rules thereunder; and such counsel has no reason to believe that the
     Registration Statement at its effective date contained any untrue statement
     of a material fact or omitted to state any material fact required to be
     stated therein or necessary to make the statements therein not misleading
     or that, as of its date, the Prospectus as amended or supplemented and any
     further amendments and supplements thereto made by the Company or Ameritech
     (other than the financial statements and other financial and statistical
     information contained therein as to which such counsel need

                                      -12-
<PAGE>
 
     express no opinion) includes any untrue statement of a material fact or
     omits to state a material fact necessary to make the statements therein, in
     light of the circumstances under which they were made, not misleading.

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Illinois, the
corporate law of the State of Delaware or the laws of the United States, to the
extent deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable and who are reasonably
satisfactory to counsel for the Representatives and (B) as to matters of fact,
to the extent deemed proper, on certificates of responsible officers of the
Company and Ameritech and public officials.

     (e) On the date of the Pricing Agreement for such Designated Securities and
at the Time of Delivery for such Designated Securities, Arthur Andersen LLP
shall have furnished to the Representatives a letter, dated the effective date
of the Registration Statement or the date of the most recent report filed with
the Commission containing financial statements and incorporated by reference in
the Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively, to the
effect set forth in Annex II hereto, and with respect to such letter dated such
Time of Delivery, as to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the Representatives;

     (f) The Company shall have furnished to the Representatives a certificate
of the Company, signed by the President and the principal financial or
accounting officer or Assistant Treasurer of the Company, dated as of the Time
of Delivery of the Designated Securities, to the effect that the signers of such
certificate have examined the Registration Statement, the Prospectus as amended
or supplemented and any further amendments and supplements thereto made by the
Company or Ameritech prior to the Time of Delivery for the Designated Securities
and this Agreement and that:

          (i) the representations and warranties of the Company in this
     Agreement are true and correct in all material respects on and as of the
     date hereof with the same effect as if made on the date hereof and the
     Company has complied with all the agreements and satisfied all the
     conditions on its part to be performed or satisfied as a condition to the
     obligation of the Underwriters of the Designated Securities under the
     Pricing Agreement relating thereto;

          (ii) no stop order suspending the effectiveness of the Registration
     Statement has been issued and no proceedings for

                                      -13-
<PAGE>
 
     that purpose have been instituted or, to such officers' knowledge,
     threatened; and

          (iii) since the date of the most recent financial statements included
     in the Prospectus as amended or supplemented (exclusive of any further
     amendments or supplements thereto), there has been no material adverse
     change in the condition (financial or other), earnings, business or
     properties of the Company and its subsidiaries taken as a whole, whether or
     not arising from transactions in the ordinary course of business, except as
     set forth in or contemplated in the Prospectus as amended or supplemented
     (exclusive of any further amendments or supplements thereto).

     (g) Ameritech shall have furnished to the Representatives a certificate of
Ameritech, signed by the Chairman of the Board, a Vice Chairman, a President or
any Vice President and the principal financial or accounting officer, Treasurer
or Assistant Treasurer of Ameritech, dated as of the Time of Delivery of the
Designated Securities, to the effect that the signers of such certificate have
examined the Registration Statement, the Prospectus as amended or supplemented
and any further amendments and supplements thereto made by the Company or
Ameritech prior to the Time of Delivery for the Designated Securities and this
Agreement and that:

          (i) the representations and warranties of Ameritech in this Agreement
     are true and correct in all material respects on and as of the date hereof
     with the same effect as if made on the date hereof and Ameritech has
     complied with all the agreements and satisfied all the conditions on its
     part to be performed or satisfied as a condition to the obligation of the
     Underwriters of the Designated Securities under the Pricing Agreement
     relating thereto;

         (ii) no stop order suspending the effectiveness of the Registration
     Statement has been issued and no proceedings for that purpose have been
     instituted or, to such officers' knowledge, threatened; and

        (iii)  since the date of the most recent financial statements included
     in the Prospectus as amended or supplemented (exclusive of any further
     amendments or supplements thereto), there has been no material adverse
     change in the condition (financial or other), earnings, business or
     properties of Ameritech and its subsidiaries taken as a whole, whether or
     not arising from transactions in the ordinary course of business, except as
     set forth in or contemplated in the Prospectus as amended or supplemented
     (exclusive of any further amendments or supplements thereto).

     (h) On or after the date of the Pricing Agreement relating to the
Designated Securities and prior to the Time of Delivery

                                      -14-
<PAGE>
 
thereof, (1) no downgrading shall have occurred in the rating accorded the
Company's or Ameritech's debt securities by any of Standard & Poor's
Corporation, Moody's Investors Service, Inc. or Duff & Phelps Credit Rating Co.
and (2) none of such organizations shall have publicly announced that it has
under surveillance or review with possible negative implications its rating of
any of the Company's or Ameritech's debt securities;

     (i) On or after the date of the Pricing Agreement relating to the
Designated Securities and prior to the Time of Delivery thereof, there shall not
have occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the outbreak or material
escalation of hostilities involving the United States or the declaration by the
United States, on or after the date of such Pricing Agreement and prior to such
Time of Delivery, of a national emergency or war if the effect of any such event
specified in this clause (iii) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Securities on the terms and in the manner contemplated in the
Prospectus as amended or supplemented; and

     (j) Neither the Company nor Ameritech shall have made, after the date of
the Pricing Agreement for any Designated Securities and prior to the Time of
Delivery for such Designated Securities, any amendment or supplement to the
Registration Statement or Prospectus as amended or supplemented which shall have
been reasonably disapproved by the Representatives for such Designated
Securities.

     8.   (a)  The Company and Ameritech will jointly and severally indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject
under the Act, the Exchange Act or any other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim; provided, however, that
neither the Company nor Ameritech shall be liable in any such case to the extent
that any such loss, claim, damage or

                                      -15-
<PAGE>
 
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company or Ameritech by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Securities;
and provided, further, that, in the event that the Prospectus as amended or
supplemented shall have been further amended or supplemented and copies thereof,
as so further amended or supplemented, furnished to each Underwriter prior to
the confirmation of any sales of Designated Securities, such indemnity with
respect to the Prospectus as amended or supplemented shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the Designated Securities which are the subject
thereof if such person did not, at or prior to the confirmation of the sale of
Designated Securities to such person, receive a copy of the Prospectus
(excluding documents incorporated by reference) as so further amended or
supplemented and the untrue statement or omission of a material fact contained
in the Prospectus as amended or supplemented was corrected in the Prospectus as
so further amended or supplemented.

     (b) Each Underwriter will indemnify and hold harmless the Company and
Ameritech against any losses, claims, damages or liabilities to which the
Company or Ameritech may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company or Ameritech by
such Underwriter through the Representatives expressly for use therein; and will
reimburse the Company and Ameritech for any legal or other expenses reasonably
incurred by the Company or Ameritech in connection with investigating or
defending any such action or claim.

                                      -16-
<PAGE>
 
     (c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), provided, however, that if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties.  Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by you in the case of subsection (a),
representing the indemnified parties under such subsection (a) who are parties
to such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that, if
clause (i) or (iii) is applicable, such liability shall be only in respect of
the counsel referred to in such clause (i) or (iii).

     (d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsection (a) is due
in accordance with its terms but is for any reason held by a court to be
unavailable from the Company or Ameritech on grounds of policy or otherwise, the
Company, Ameritech

                                      -17-
<PAGE>
 
and each of the Underwriters of the Designated Securities shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or other
expense reasonably incurred in connection with investigating or defending same)
to which the Company, Ameritech and any of the Underwriters of the Designated
Securities may be subject in such proportion so that each of the Underwriters of
the Designated Securities is responsible for that portion represented by the
percentage that the aggregate discounts and commissions received by such of the
Underwriters of the Designated Securities in connection with the Designated
Securities from which such losses, claims, damages and liabilities arise bears
to the aggregate principal amount of such Designated Securities sold and the
Company and Ameritech are responsible for the balance; provided, however, that
(y) in no case shall any of the Underwriters of the Designated Securities be
responsible for any amount in excess of the discounts and commissions received
by such of the Underwriters of the Designated Securities in connection with the
Designated Securities from which such losses, claims, damages and liabilities
arise and (z) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.  For purposes of
this Section 8, each person who controls any of the Underwriters of Designated
Securities within the meaning of the Act shall have the same rights to
contribution as you and each person who controls the Company or Ameritech within
the meaning of either the Act or the Exchange Act, each officer of the Company
and Ameritech who shall have signed the Registration Statement and each director
of the Company and Ameritech shall have the same rights to contribution as the
Company and Ameritech, subject in each case to clauses (y) and (z) of this
paragraph (d).  Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d).

     (e) The obligations of the Company and Ameritech under this Section 8 shall
be in addition to any liability which the Company or Ameritech may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and Ameritech and to each person, if any, who controls the Company or Ameritech
within the meaning of the Act.

                                      -18-
<PAGE>
 
     9.   (a)  If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company and
Ameritech agree to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Securities.

     (b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.

     (c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of

                                      -19-
<PAGE>
 
Designated Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of the Designated Securities, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.

     10.  The respective indemnities, agreements, representations, warranties
and other statements of the Company, Ameritech and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company or Ameritech, or any officer or director or controlling person of the
Company or Ameritech, and shall survive delivery of and payment for the
Securities.

     11.  If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor Ameritech shall then be under any liability to
any Underwriter with respect to the Designated Securities covered by such
Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if
for any other reason Designated Securities are not delivered by or on behalf of
the Company as provided herein, the Company and Ameritech will reimburse the
Underwriters through the Representatives for all out-of-pocket expenses approved
in writing by the Representatives, including the reasonable fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Securities,
but the Company and Ameritech shall then be under no further liability to any
Underwriter with respect to such Designated Securities except as provided in
Section 6 and Section 8 hereof.

     12.  In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.

          All statements, requests, notices and agreements hereunder shall be in
writing or by telegram or facsimile transmission if promptly confirmed in
writing, and if to the

                                      -20-
<PAGE>
 
Underwriters shall be sufficient in all respects if delivered or sent by
registered mail to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company or Ameritech shall be sufficient in all
respects if delivered or sent by registered mail to the respective addresses of
the Company and Ameritech set forth in the Registration Statement, in the case
of the Company, Attention: President, and, in the case of Ameritech, Attention:
Senior Vice President and General Counsel; provided, however, that any notice to
an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
registered mail to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company or Ameritech by the Representatives upon
request.

     13.  This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company, Ameritech and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company and Ameritech and each person who controls the Company
or Ameritech or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.

     14.  Time shall be of the essence of each Pricing Agreement. "Business day"
as used herein shall mean any day when the Commission's office in Washington,
D.C. is normally open for business.

     15.  This Agreement and each Pricing Agreement shall be construed in
accordance with the laws of the State of New York.

     16.  This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.

     17.  This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers and directors of
controlling persons referred to in Section 8 hereof, and no other person will
have any right or obligation hereunder.

                                      -21-
<PAGE>
 
          If the foregoing is in accordance with your understanding, please sign
and return _____ counterparts hereof.

                                    Very truly yours,

                                    AMERITECH CAPITAL FUNDING
                                    CORPORATION


                                    By: _______________________

                                    Title:


                                    AMERITECH CORPORATION


                                    By: _______________________

                                    Title:

                                      -22-
<PAGE>
 
Accepted as of the date hereof:


- ---------------------------------
[NAME(S) OF REPRESENTATIVE(S)]


on behalf of [NAME(S) OF REPRESENTATIVE(S)]
and the other several Underwriters

                                      -23-
<PAGE>
 
                                                                         ANNEX I

                         Pricing Agreement
                         -----------------

     [Names of Representative(s)]
      As Representatives of the several
          Underwriters named in Schedule I hereto,
     [                        ]
     [                        ]



Dear Sirs:

     Ameritech Capital Funding Corporation (the "Company") proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement,
dated______________,____ (the "Underwriting Agreement"), between the Company and
Ameritech Corporation ("Ameritech") on the one hand and [names of
representative(s) named therein] on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities").  The Securities
will be guaranteed unconditionally as to payments of principal, premium, if any,
and interest by Ameritech.  Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty with respect to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement.  Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you.  Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined.  The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.

                                      -24-
<PAGE>
 
     An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.

     Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.

     If the foregoing is in accordance with your understanding, please sign and
return to us ___ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Company and Ameritech.  It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company or Ameritech for examination, upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.

                                    Very truly yours,

                                    AMERITECH CAPITAL FUNDING
                                      CORPORATION


                                    By: __________________________
 
                                    AMERITECH CORPORATION


                                    By: __________________________

Accepted as of the date hereof:

[NAME(S) OF REPRESENTATIVE(S)]

By: ___________________________

                                      -25-
<PAGE>
 
                                   SCHEDULE I


                                               Principal Amount of
                                              Designated securities
                                                      to be
     Underwriter                                    Purchased
     -----------                              ---------------------


[Name(s) of Representative(s)]...............
[Names of other Underwriters]









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

     Total......................................  $____________
                                                   ------------

                                      -26-
<PAGE>
 
                                SCHEDULE II

TITLE OF DESIGNATED SECURITIES:

     [      %] [Floating Rate]  [Zero Coupon]  [Notes]

     [Debentures]  [Warrants]  due

AGGREGATE PRINCIPAL AMOUNT:

     $

PRICE TO PUBLIC:

          % of the principal amount of the Designated Securities, plus accrued
     interest from             to            [and accrued amortization, if any,
     from               to        ]

PURCHASE PRICE BY UNDERWRITERS:

         % of the principal amount of the Designated Securities, plus accrued
     interest from                to            [and accrued amortization, if
     any, from           to            ]

SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

     [New York] Clearing House (next day) funds

INDENTURE:

     Indenture, dated ____________ __, ____, among the Company, Ameritech and
     Harris Trust and Savings Bank, as Trustee

MATURITY:


INTEREST RATE:

     [      %]  [Zero Coupon]  [See Floating Rate Provisions]

INTEREST PAYMENT DATES:

     [months and dates]

REDEMPTION PROVISIONS:

     [No provisions for redemption]

                                      -27-
<PAGE>
 
     [The Designated Securities may be redeemed, otherwise than through the
     sinking fund, in whole or in part at the option of the Company, in the
     principal face amount of $        or an integral multiple thereof,

     [on or after             , at the following redemption prices (expressed in
     percentages of principal amount).  If [redeemed on or before        ,    %
     and if], redeemed during the 12-month period beginning


                                         Redemption
          Year                              Rate
          ----                              ----



     and thereafter at 100% of their principal amount, together in each case
     with accrued interest to the redemption date.]

     [On any interest payment date falling or after    ,   , at the election of
     the Company, at a redemption price equal to the principal amount thereof,
     plus accrued interest to the date of redemption.]

     [Other possible redemption provisions, such as mandatory redemption upon
     occurrence of certain events or redemption for changes in tax law]

     [Restriction on refunding]

SINKING FUND PROVISIONS:

     [No sinking fund provisions]

     [The Designated Securities are entitled to the benefit of a sinking fund to
     retire $         principal amount of Designated Securities on
     in each of the years [         ] through [     ] at 100% of their principal
     amount plus accrued interest]  [, together with [cumulative]
     [noncumulative] redemptions at the option of the Company to retire an
     additional $            principal amount of Designated Securities in the
     years       through       at 100% of their principal amount plus accrued
     interest.]

     [IF SECURITIES ARE EXTENDABLE DEBT SECURITIES, INSERT --

EXTENDABLE PROVISIONS:

     Securities are repayable on           , [insert date and years], at the
     option of the holder, at their principal amount

                                      -28-
<PAGE>
 
     with accrued interest.  Initial annual interest rate will be        %, and
     thereafter annual interest rate will be adjusted on         , and   to a
     rate not less than     % of the effective annual interest rate on U.S.
     Treasury obligations with      -year maturities as of the [insert date 15
     days prior to maturity date] prior to such [insert maturity date].]

     IF SECURITIES ARE FLOATING RATE DEBT SECURITIES, INSERT --

FLOATING RATE PROVISIONS:

     Initial annual interest rate will be     %              through
     [and thereafter will be adjusted [monthly] [on each      ,     ,       and
                ]   [to an annual rate of      % above the average rate for 
     -year [month] [securities]  [certificates of deposit] by and     [insert 
     names of banks].]  [and the annual interest rate            [thereafter]  
     [from     through       ] will be the interest yield equivalent of the 
     weekly average per annum market discount rate for         -month Treasury 
     bills plus of Interest Differential (the excess, if any, of (i) then 
     current weekly average per annum secondary market yield for    -month 
     certificate of deposit over (ii) then current interest yield equivalent of 
     the weekly average per annum market discount rate from          -month 
     Treasury bills); (from            and         thereafter the rate will be 
     the then current interest yield equivalent plus    % of Interest 
     Differential].]

TIME OF DELIVERY:

CLOSING LOCATION:

NAMES AND ADDRESSES OF REPRESENTATIVES:

     Designated Representatives:

     Address for Notices, etc.:

[OTHER TERMS]:

                                      -29-
<PAGE>
 
                                                                        ANNEX II

     (1) They are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder;

     (2) In their opinion, the audited financial statements, financial statement
schedules and pro forma financial statements, if any, included or incorporated
in the Registration Statement and the Prospectus and reported on by them comply
in form in all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and regulations;

     (3) On the basis of a reading of the latest unaudited financial statements
made available by Ameritech and its subsidiaries, the carrying out of certain
specified procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and the executive and
audit committees of Ameritech, and inquiries of certain officials of Ameritech
who have responsibility for financial and accounting matters of Ameritech and
its subsidiaries as to transactions and events subsequent to the date of the
most recent audited financial statements included or incorporated in the
Prospectus, nothing came to their attention which caused them to believe that:

          (a) any unaudited financial statements included or incorporated in the
     Registration Statement and the Prospectus do not comply in form in all
     material respects with applicable accounting requirements and with the
     published rules and regulations of the Commission with respect to financial
     statements included or incorporated in quarterly reports on Form 10-Q under
     the Exchange Act; and said unaudited financial statements are not in
     conformity with generally accepted accounting principles applied on a basis
     substantially consistent with that of the audited financial statements
     included or incorporated in the Registration Statement and the Prospectus;

          (b) with respect to the period subsequent to the date of the most
     recent financial statements (other than any capsule information), audited
     or unaudited, in or incorporated in the Registration Statement and the
     Prospectus, there were any changes, at a specified date not more than five
     business days prior to the date of the letter, in the long-term debt of
     Ameritech and its subsidiaries or capital stock of Ameritech or decreases
     in the stockholders' equity of Ameritech as compared with the amounts shown
     on the most recent consolidated balance sheet included or incorporated in
     the

                                      -30-
<PAGE>
 
     Registration Statement and the Prospectus, or for the period from the date
     of the most recent financial statements included or incorporated in the
     Registration Statement and the Prospectus to such specified date there were
     any decreases, as compared with the corresponding period in the preceding
     year in net revenues or income before income taxes or in total or per share
     amounts of net income of the Company and its subsidiaries, except in all
     instances for changes or decreases set forth in such letter, in which case
     the letter shall be accompanied by an explanation by Ameritech as to the
     significance thereof unless said explanation is not deemed necessary by the
     Representatives; or

          (c) the amounts included in any unaudited "capsule" information
     included or incorporated in the Registration Statement and the Prospectus
     do not agree with the amounts set forth in the unaudited financial
     statements for the same periods or were not determined on a basis
     substantially consistent with that of the corresponding amounts in the
     audited financial statements included or incorporated in the Registration
     Statement and the Prospectus;

     (4) In addition to their examination referred to in their report included
or incorporated by reference in the Registration Statement and Prospectus and
the procedures referred to in (3) above, they have performed certain other
specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from the general
accounting records of Ameritech and its subsidiaries) set forth in the
Registration Statement and the Prospectus and in Exhibit 12 to the Registration
Statement, including certain information specified by the Representatives and
agreed to by Arthur Andersen LLP included or incorporated in Items 1, 2, 6, 7
and 11 of Ameritech's Annual Report on Form 10-K, incorporated in the
Registration Statement and the Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in the Company's Quarterly Reports on Form
10-Q, incorporated in the Registration Statement and the Prospectus, agrees with
the accounting records of Ameritech and its subsidiaries, excluding any
questions of legal interpretation; and

     (5) If unaudited pro forma financial statements are included or
incorporated in the Registration Statement and the Prospectus, on the basis of a
reading of the unaudited pro forma financial statements, carrying out certain
specified procedures, inquiries of certain officials of Ameritech and the
acquired company who have responsibility for financial and accounting matters,
and proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial statements,
nothing came to their attention which caused them to

                                      -31-
<PAGE>
 
believe that the pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such statements.

                                      -32-

<PAGE>

                                                                       EXHIBIT 4
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                     AMERITECH CAPITAL FUNDING CORPORATION,
 
                                     ISSUER
 
                             AMERITECH CORPORATION,
 
                                   GUARANTOR
 
                                      AND
 
                         HARRIS TRUST AND SAVINGS BANK,
 
                                    TRUSTEE
 
                               ----------------
 
                                   INDENTURE
 
                          DATED AS OF          , 1995
 
                               ----------------
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
 
                             CROSS REFERENCE SHEET*
 
                                    BETWEEN
 
       Provisions of Sections 310 through 318(a) inclusive of the
     Trust Indenture Act of 1939 and the Indenture dated as of
              , 1995 among Ameritech Capital Funding Corporation,
     Ameritech Corporation and Harris Trust and Savings Bank, as
     Trustee.
 
<TABLE>
<CAPTION>
                                                               SECTION OF
      SECTION OF ACT                                           INDENTURE
      <S>                                               <C>
      310(a)(1)........................................ 609
      310(a)(2)........................................ 609
      310(a)(3)........................................   **
      310(a)(4)........................................   **
      310(a)(5)........................................ 609
      310(b)........................................... 608 and 610
      310(c)...........................................   **
      311(a)........................................... 613(a)
      311(b)........................................... 613(b)
      311(b)(2)........................................ 703(a)(iii) and 703(b)
      311(c)...........................................   **
      312(a)........................................... 701 and 702(a)
      312(b)........................................... 702(b)
      312(c)........................................... 702(c)
      313(a)........................................... 703(a)
      313(b)........................................... 703(b)
      313(c)........................................... 703(c)
      313(d)........................................... 703(d)
      314(a)........................................... 704
      314(b)...........................................   **
      314(c)(1)........................................ 102
      314(c)(2)........................................ 102
      314(c)(3)........................................   **
      314(d)...........................................   **
      314(e)........................................... 102
      315(a)........................................... 601(a)
      315(b)........................................... 602
      315(c)........................................... 601(b)
      315(d)(1)........................................ 601(a)(i) and 601(a)(ii)
      315(d)(2)........................................ 601(c)(ii)
      315(d)(3)........................................ 601(c)(iii)
      315(e)........................................... 514
      316(a)(1)(A)..................................... 502 and 512
      316(a)(1)(B)..................................... 513
      316(a)(2)........................................   **
      316(b)........................................... 508
      316(c)........................................... 516
      317(a)(1)........................................ 503
      317(a)(2)........................................ 504
      317(b)........................................... 1003
      318(a)........................................... 108
</TABLE>
     --------
      *This cross reference sheet shall not, for any purpose, be
      deemed to be a part of the Indenture.
     **Not applicable.
<PAGE>
 
                               TABLE OF CONTENTS*
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
                                  ARTICLE ONE
 
            Definitions and Other Provisions of General Application
 
 <C>          <S>                                                           <C>
 Section 101. Definitions.................................................    1
              Act.........................................................    1
              Affiliate...................................................    1
              Authenticating Agent........................................    1
              Authorized Newspaper........................................    1
              Bearer Security.............................................    2
              Business Day................................................    2
              Capital Stock...............................................    2
              CEDEL S.A...................................................    2
              Commission..................................................    2
              Common Depository...........................................    2
              Company.....................................................    2
              Company Request or Company Order............................    2
              Corporate Trust Office......................................    2
              corporation.................................................    2
              coupon......................................................    2
              Defaulted Interest..........................................    2
              Dollar......................................................    2
              Euro-clear..................................................    2
              Event of Default............................................    2
              Exchange Date...............................................    2
              Guarantee...................................................    2
              Guarantor...................................................    3
              Holder......................................................    3
              Indenture...................................................    3
              interest....................................................    3
              Interest Payment Date.......................................    3
              Maturity....................................................    3
              Mortgage....................................................    3
              Officers' Certificate.......................................    3
              Opinion of Counsel..........................................    3
              Original Issue Discount Security............................    3
              Outstanding.................................................    3
              Paying Agent................................................    4
              Person......................................................    4
              Place of Payment............................................    4
              Predecessor Security........................................    4
              Redemption Date.............................................    4
              Redemption Price............................................    4
              Registered Security.........................................    4
              Regular Record Date.........................................    4
              Resolution..................................................    4
</TABLE>
- --------
 *This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture
 
                                       i
<PAGE>
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
 <C>          <S>                                                          <C>
              Responsible Officer........................................    5
              Securities.................................................    5
              Security Register and Security Registrar...................    5
              Special Record Date........................................    5
              Stated Maturity Date.......................................    5
              Subsidiary.................................................    5
              Trustee....................................................    5
              Trust Indenture Act........................................    5
              United States..............................................    5
              United States Alien........................................    5
              U.S. Depository............................................    5
              U.S. Government Obligations................................    5
              Vice President.............................................    6
              Voting Stock...............................................    6
 Section 102. Compliance Certificates and Opinions.......................    6
 Section 103. Form of Documents Delivered to Trustee.....................    6
 Section 104. Acts of Holders............................................    7
 Section 105. Notices, Etc., to Trustee, Company and Guarantor...........    8
 Section 106. Notice to Holders of Securities; Waiver....................    8
 Section 107. Language of Notices, Etc...................................    9
 Section 108. Conflict with Trust Indenture Act..........................    9
 Section 109. Effect of Headings and Table of Contents...................    9
 Section 110. Successors and Assigns.....................................    9
 Section 111. Separability Clause........................................    9
 Section 112. Benefits of Indenture......................................    9
 Section 113. Exemption from Individual Liability........................   10
 Section 114. Governing Law..............................................   10
 Section 115. Legal Holidays.............................................   10
 
                                  ARTICLE TWO
 
                                 Security Forms
 
 Section 201. Forms Generally............................................   10
 Section 202. Form of Trustee's Certificate of Authentication............   11
 Section 203. Securities in Global Form..................................   11
 
                                 ARTICLE THREE
 
                                 The Securities
 
 Section 301. Amount Unlimited; Issuable in Series.......................   12
 Section 302. Denominations..............................................   14
 Section 303. Execution, Authentication, Delivery and Dating.............   14
 Section 304. Temporary Securities.......................................   15
 Section 305. Registration, Registration of Transfer and Exchange........   17
                     Mutilated, Destroyed, Lost and Stolen Securities and
 Section 306. Coupons....................................................   19
</TABLE>
 
                                       ii
<PAGE>
 
<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
 <C>           <S>                                                           <C>
 Section 307.  Payment of Interest; Interest Rights Preserved.............    20
 Section 308.  Persons Deemed Owners......................................    21
 Section 309.  Cancellation...............................................    21
 Section 310.  Computation of Interest....................................    21
 Section 311.  Unconditional Guarantee....................................    21
 Section 312.  Execution of Guarantees....................................    23
 Section 313.  Assumption by Guarantor....................................    23
 
                                  ARTICLE FOUR
 
                           Satisfaction and Discharge
 
 Section 401.  Satisfaction and Discharge of Indenture....................    23
 Section 402.  Application of Trust Money.................................    24
 Section 403.  Satisfaction, Discharge and Defeasance of Securities of any
                Series....................................................    24
 Section 404.  Reinstatement..............................................    26
 
                                  ARTICLE FIVE
 
                                    Remedies
 
 Section 501.  Events of Default..........................................    26
 Section 502.  Acceleration of Maturity; Rescission and Annulment.........    27
 Section 503.  Collection of Indebtedness and Suits for Enforcement by
                Trustee...................................................    28
 Section 504.  Trustee May File Proofs of Claim...........................    28
 Section 505.  Trustee May Enforce Claims Without Possession of Securities
                or Coupons................................................    29
 Section 506.  Application of Money Collected.............................    29
 Section 507.  Limitations on Suits.......................................    29
 Section 508.  Unconditional Right of Holders to Receive Principal,
                Premium and Interest......................................    30
 Section 509.  Restoration of Rights and Remedies.........................    30
 Section 510.  Rights and Remedies Cumulative.............................    30
 Section 511.  Delay or Omission Not Waiver...............................    30
 Section 512.  Control by Holders of Securities...........................    30
 Section 513.  Waiver of Past Defaults....................................    31
 Section 514.  Undertaking for Costs......................................    31
 Section 515.  Waiver of Stay or Extension Laws...........................    31
 Section 516.  Record Date................................................    31
 
                                  ARTICLE SIX
 
                                  The Trustee
 
 Section 601.  Certain Duties and Responsibilities........................    32
 Section 602.  Notice of Defaults.........................................    32
 Section 603.  Certain Rights of Trustee..................................    33
</TABLE>
 
 
                                      iii
<PAGE>
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
 <C>           <S>                                                         <C>
 Section 604.  Not Responsible for Recitals or Issuance of Securities....   33
 Section 605.  May Hold Securities.......................................   34
 Section 606.  Money Held in Trust.......................................   34
 Section 607.  Compensation and Reimbursement............................   34
 Section 608.  Disqualification; Conflicting Interests...................   34
 Section 609.  Corporate Trustee Required; Eligibility...................   38
 Section 610.  Resignation and Removal; Appointment of Successor.........   39
 Section 611.  Acceptance of Appointment by Successor....................   40
 Section 612.  Merger, Conversion, Consolidation or Succession to
                Business.................................................   41
 Section 613.  Preferential Collection of Claims Against Company and
                Guarantor................................................   41
 Section 614.  Appointment of Authenticating Agent.......................   43
 
                                 ARTICLE SEVEN
 
          Holders' Lists and Reports by Trustee, Company and Guarantor
 
 Section 701.  Company and Guarantor to Furnish Trustee Names and
                Addresses of Holders.....................................   45
 Section 702.  Preservation of Information; Communications to Holders....   45
 Section 703.  Reports by Trustee........................................   46
 Section 704.  Reports by Company and Guarantor..........................   47
 
                                 ARTICLE EIGHT
 
              Consolidation, Merger, Conveyance, Transfer or Lease
 
 Section 801.  Company and Guarantor May Consolidate, Etc., Only on
                Certain Terms............................................   48
 Section 802.  Successor Substituted.....................................   48
 
                                  ARTICLE NINE
 
                            Supplemental Indentures
 
 Section 901.  Supplemental Indentures Without Consent of Holders........   48
 Section 902.  Supplemental Indentures With Consent of Holders...........   49
 Section 903.  Execution of Supplemental Indentures......................   50
 Section 904.  Effect of Supplemental Indentures.........................   50
 Section 905.  Conformity with Trust Indenture Act.......................   50
 Section 906.  Reference in Securities to Supplemental Indentures........   50
 
                                  ARTICLE TEN
 
                                   Covenants
 
 Section 1001. Payment of Principal, Premium and Interest................   51
 Section 1002. Maintenance of Office or Agency...........................   51
 Section 1003. Money for Securities Payments to Be Held in Trust.........   52
 Section 1004. Additional Amounts........................................   53
 Section 1005. Purchase of Securities by Company or Subsidiary...........   53
</TABLE>
 
                                       iv
<PAGE>
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
 <C>           <S>                                                          <C>
 Section 1006. Lien on Assets............................................    54
 Section 1007. Waiver of Certain Covenants...............................    54
 Section 1008. Defeasance of Certain Obligations.........................    54
 
                                 ARTICLE ELEVEN
 
                            Redemption of Securities
 
 Section 1101. Applicability of Article..................................    55
 Section 1102. Election to Redeem; Notice to Trustee.....................    55
 Section 1103. Selection by Trustee of Securities to Be Redeemed.........    56
 Section 1104. Notice of Redemption......................................    56
 Section 1105. Deposit of Redemption Price...............................    56
 Section 1106. Securities Payable on Redemption Date.....................    56
 Section 1107. Securities Redeemed in Part...............................    57
 
                                 ARTICLE TWELVE
 
                                 Sinking Funds
 
 Section 1201. Applicability of Article..................................    57
 Section 1202. Satisfaction of Sinking Fund Payments with Securities.....    58
 Section 1203. Redemption of Securities for Sinking Fund.................    58
 
                                ARTICLE THIRTEEN
 
                       Meetings of Holders of Securities
 
 Section 1301. Purposes for Which Meetings May Be Called.................    58
 Section 1302. Call, Notice and Place of Meetings........................    58
 Section 1303. Persons Entitled to Vote at Meetings......................    59
 Section 1304. Quorum; Action............................................    59
 Section 1305. Determination of Voting Rights; Conduct and Adjournment of
                Meetings.................................................    60
 Section 1306. Counting Votes and Recording Action of Meetings...........    60
 Signatures...............................................................   61
 Acknowledgements.........................................................   61
</TABLE>
 
                                       v
<PAGE>
 
  INDENTURE, dated as of          , 1995, among Ameritech Capital Funding
Corporation (the "Company"), Ameritech Corporation (the "Guarantor"), each a
corporation duly organized and existing under the laws of the State of Delaware
and having its principal office at 30 South Wacker Drive, Chicago, Illinois
60606, and Harris Trust and Savings Bank, an Illinois banking corporation, as
Trustee (the "Trustee").
 
  Whereas, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (the "Securities"), to be
issued in one or more series as provided herein; and
 
  Whereas, the Guarantor has duly authorized the execution and delivery of this
Indenture and the Guarantees (as defined herein) and deems it appropriate from
time to time to issue its Guarantees of the Securities on the terms herein
provided;
 
  Now, Therefore, This Indenture Witnesseth that, for and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:
 
                                  ARTICLE ONE
 
            Definitions and Other Provisions of General Application
 
Section 101. Definitions.
 
  For all purposes of this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
 
    (a) the terms defined in this Article have the meanings assigned to them
  in this Article and include the plural as well as the singular;
 
    (b) all other terms used herein which are defined in the Trust Indenture
  Act, either directly or by reference therein, have the meanings assigned to
  them therein;
 
    (c) all accounting terms not otherwise defined herein have the meanings
  assigned to them in accordance with generally accepted accounting
  principles in the United States of America and, except as otherwise herein
  expressly provided, the term "generally accepted accounting principles"
  with respect to any computation required or permitted hereunder shall mean
  such accounting principles as are generally accepted in the United States
  of America at the date of such computation; and
 
    (d) the words "herein", "hereof" and "hereunder" and other words of
  similar import refer to this Indenture as a whole and not to any particular
  Article, Section or other subdivision hereof.
 
Certain terms, used principally in Article Six, are defined in that Article.
 
  "Act", when used with respect to any Holder of a Security, has the meaning
specified in Section 104.
 
  "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
 
  "Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
 
  "Authorized Newspaper" means a newspaper, in the English language or in an
official language of the country of publication, customarily published on each
Business Day, whether or not published on Saturdays,
<PAGE>
 
Sundays or holidays, and of general circulation in the place in connection with
which the term is used or in the financial community of such place. Where
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different newspapers in
the same city meeting the foregoing requirements and in each case on any
Business Day.
 
  "Bearer Security" means any Security established pursuant to Section 201
which is payable to the bearer thereof.
 
  "Business Day" when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions and trust companies in that Place of Payment or
other location are authorized or obligated by law or executive order to close.
 
  "Capital Stock" means, as to shares of a corporation, outstanding shares of
stock of any class whether now or hereafter authorized, irrespective of whether
such class shall be limited to a fixed sum or percentage in respect of the
rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary liquidation, dissolution or winding
up of such corporation.
 
  "CEDEL S.A." means Centrale de Livraison de Valeurs Mobilieres S.A.
 
  "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
 
  "Common Depository" has the meaning specified in Section 304.
 
  "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
 
  "Company Request" or "Company Order" means a written request or order signed
in the name of the Company by the President or a Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee.
 
  "Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office as of the date hereof is at 311 West Monroe Street, Chicago,
Illinois 60606.
 
  "corporation" means a corporation, association, company, joint-stock company
or business trust.
 
  "coupon" means any interest coupon appertaining to a Bearer Security.
 
  "Defaulted Interest" has the meaning specified in Section 307.
 
  "Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
 
  "Euro-clear" means Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euro-clear System.
 
  "Event of Default" has the meaning specified in Section 501.
 
  "Exchange Date" has the meaning specified in Section 304.
 
  "Guarantee" means the agreement of the Guarantor in the form set forth in
Section 311, to be endorsed on the Securities authenticated and delivered
hereunder.
 
                                       2
<PAGE>
 
  "Guarantor" means the Person named as the Guarantor in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Guarantor" shall mean
such successor Person.
 
  "Holder", when used with respect to any Security, means in the case of a
Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security (or any temporary global
Security) the bearer thereof and, when used with respect to any coupon, means
the bearer thereof.
 
  "Indenture" means this instrument as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of particular
series of Securities established as contemplated by Section 301.
 
  "interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
 
  "Interest Payment Date", when used with respect to any Security, means the
Stated Maturity Date of an installment of interest on such Security.
 
  "Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity Date or
by declaration of acceleration, call for redemption or otherwise.
 
  "Mortgage" means and includes any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance.
 
  "Officers' Certificate" means a certificate signed by the President or a Vice
President and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, or by the Chairman, a Vice Chairman, the
President or a Vice President and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Guarantor, as the case may be, and
delivered to the Trustee.
 
  "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Company or the Guarantor, as the case may be, or other counsel
who shall be acceptable to the Company or the Guarantor and the Trustee.
 
  "Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 .
 
  "Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
 
    (a) Securities theretofore cancelled by the Trustee or delivered to the
  Trustee for cancellation;
 
    (b) Securities for whose payment or redemption money in the necessary
  amount has been theretofore 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 and any coupons thereto appertaining; provided,
  that if such Securities 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 which have been paid pursuant to Section 306 or in
  exchange for or in lieu of which other Securities have been authenticated
  and delivered pursuant to this Indenture, other than any such Securities in
  respect of which there shall have been presented to the Trustee proof
  satisfactory to it that such Securities are held by a bona fide purchaser
  in whose hands such Securities are valid obligations of the Company;
 
                                       3
<PAGE>
 
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities, (x) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the Maturity thereof pursuant to Section 502, (y) the principal amount of a
Security denominated in a foreign currency or currencies shall be the U.S.
dollar equivalent, determined as of the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue
Discount Security, the U.S. dollar equivalent on the date of original issuance
of such Security of the amount determined as provided in (x) above) of such
Security and (z) Securities owned by the Company, the Guarantor or any other
obligor upon the Securities or any Affiliate of the Company, the Guarantor or
of 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, or upon any such determination as to the presence of a quorum, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
 
  "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or any interest on any Securities on behalf
of the Company.
 
  "Person" means any individual, corporation, partnership, joint venture,
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, subject to the provisions of Section 1002, the
principal of (and premium, if any) and any interest on the Securities of that
series are payable as specified as contemplated by Section 301.
 
  "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
 
  "Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
 
  "Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
 
  "Registered Security" means any Security in the form set forth in either
Exhibit A or Exhibit B to this Indenture or established pursuant to Section 201
which is registered in the Security Register.
 
  "Regular Record Date" for the interest payable on any Interest Payment Date
on the Registered Securities of any series means the date specified for that
purpose as contemplated by Section 301.
 
  "Resolution" means a resolution of the sole shareholder (or, if one exists,
the board of directors) of the Company or the board of directors of the
Guarantor, certified by such Person's Secretary or an Assistant Secretary to
have been duly adopted by its sole shareholder (or, if one exists, its board of
directors) or board of directors, respectively, and to be in full force and
effect on the date of such certification and delivered to the Trustee.
 
 
                                       4
<PAGE>
 
  "Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned by it to administer its corporate trust
matters.
 
  "Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
 
  "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
 
  "Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
 
  "Stated Maturity Date", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
 
  "Subsidiary" means a corporation more than 50% of the outstanding Voting
Stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
 
  "Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and if at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
 
  "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in
Section 905.
 
  "United States" means the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
 
  "United States Alien" means any Person who, for United States Federal income
tax purposes, is a foreign corporation, a non-resident alien individual, a non-
resident alien fiduciary of a foreign estate or trust, or a foreign partnership
one or more of the members of which is, for United States Federal income tax
purposes, a foreign corporation, a non-resident alien individual or a non-
resident alien fiduciary of a foreign estate or trust.
 
  "U.S. Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more permanent
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, until a successor U.S. Depository
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "U.S. Depository" shall mean or include each Person who is then
a U.S. Depository hereunder, and if at any time there is more than one such
Person, "U.S. Depository" shall mean the U.S. Depository with respect to the
Securities of that series.
 
  "U.S. Government Obligations" means direct obligations of the United States
for the payment of which its full faith and credit is pledged, or obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository 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 U.S. Government Obligations or a specific
payment of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required
 
                                       5
<PAGE>
 
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligations or the specific
payment of principal of or interest on the U.S. Government Obligations
evidenced by such depository receipt.
 
  "Vice President", when used with respect to the Company, the Guarantor or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
 
  "Voting Stock" means stock which ordinarily has voting power for the election
of directors, whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
 
Section 102. Compliance Certificates and Opinions.
 
  Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company or the Guarantor to the Trustee to take
any action under any provision of this Indenture, the Company or the Guarantor,
as appropriate, 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 has made
  such examination or investigation as is necessary to enable him to express
  an informed opinion as to whether or not such covenant or condition has
  been complied with; and
 
    (d) a statement as to whether, in the opinion of each such individual,
  such condition or covenant has been complied with.
 
Section 103. Form of Documents Delivered to Trustee.
 
  In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such 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 or the Guarantor 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, opinion or
representations with respect to the matters upon which his certificate or
opinion is based is or are erroneous. Any such certificate or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company or the Guarantor stating that the information
 
                                       6
<PAGE>
 
with respect to such factual matters is in the possession of the Company or the
Guarantor, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate, opinion or representations with respect to
such matters is or are erroneous.
 
  Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
 
Section 104. Acts of Holders.
 
  (a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of such series may, alternatively, be embodied in and evidenced by the
record of Holders of Securities of such series voting in favor thereof, either
in person or by proxies duly appointed in writing, at any meeting of Holders of
Securities of such series duly called and held in accordance with the
provisions of Article Thirteen, or a combination of such instruments and any
such record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Company or the Guarantor. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee, the Company and the Guarantor,
if made in the manner provided in this Section. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 1306 .
 
  Without limiting the generality of this Section 104, unless otherwise
established in or pursuant to a Resolution, set forth or determined in an
Officers' Certificate or established in one or more indentures supplemental
hereto, a Holder, including a U.S. Depository that is a Holder of a permanent
global Security, may make, give or take, by a proxy or proxies duly appointed
in writing, any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be made, given or taken by
Holders, and a U.S. Depository that is a Holder of a permanent global Security
may provide its proxy or proxies to the beneficial owners of interests in any
such permanent global Security through such U.S. Depository's standing
instructions and customary practices.
 
  The Trustee shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interests in any permanent global Security
held by a U.S. Depository entitled under the procedures of such U.S. Depository
to make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in this Indenture to be made, given or taken by Holders. If
such a record date is fixed, the Holders on such record date or their duly
appointed proxy or proxies, and only such Persons, shall be entitled to make,
give or take such request, demand, authorization, direction, notice, consent,
waiver or other action, whether or not such Holders remain Holders after such
record date. No such request, demand, authorization, direction, notice,
consent, waiver or other action shall be valid or effective if made, given or
taken more than 90 days after such record date.
 
  (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Trustee deems sufficient.
 
  (c) The principal amount and serial numbers of Registered Securities held by
any Person, and the date of holding the same, shall be proved by the Security
Register.
 
                                       7
<PAGE>
 
  (d) The principal amount and serial numbers of Bearer Securities held by any
Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee, the Company and the Guarantor may assume that such
ownership of any Bearer Security continues until (i) another certificate or
affidavit bearing a later date issued in respect of the same Bearer Security is
produced, (ii) such Bearer Security is produced to the Trustee by some other
Person, (iii) such Bearer Security is surrendered in exchange for a Registered
Security or (iv) such Bearer Security is no longer Outstanding. The principal
amounts and serial numbers of Bearer Securities held by any Person, and the
date of holding the same, may also be proved in any other manner which the
Trustee deems sufficient.
 
  (e) Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, the Company or
the Guarantor in reliance thereon, whether or not notation of such action is
made upon such Security.
 
Section 105. Notices, Etc., to Trustee, Company and Guarantor.
 
  Any request, demand, authorization, direction, notice, consent, waiver or Act
of Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
 
    (a) the Trustee by any Holder or by the Company or the Guarantor shall be
  sufficient for every purpose hereunder if made, given, furnished or filed
  in writing to or with the Trustee at its Corporate Trust Office, Attention:
  Indenture Trust Division,
 
    (b) the Company by the Trustee or by any Holder shall be sufficient for
  every purpose hereunder (unless otherwise herein expressly provided) if in
  writing and mailed, first-class postage prepaid, to the Company addressed
  to it at the address of its principal office specified in the first
  paragraph of this instrument, to the attention of its Secretary, or at any
  other address previously furnished in writing to the Trustee by the
  Company, or
 
    (c) the Guarantor by the Trustee or by any Holder shall be sufficient for
  every purpose hereunder (unless otherwise herein expressly provided) if in
  writing and mailed, first-class postage prepaid, to the Guarantor addressed
  to it at the address of its principal office specified in the first
  paragraph of this instrument, to the attention of its Secretary, or at any
  other address previously furnished in writing to the Trustee by the
  Guarantor.
 
Section 106. Notice to Holders of Securities; Waiver.
 
  Except as otherwise expressly provided herein or as otherwise specified as
contemplated by Section 301, where this Indenture provides for notice to
Holders of Securities of any event,
 
    (a) such notice shall be sufficiently given to Holders of Registered
  Securities if in writing and mailed, first-class postage prepaid, to each
  Holder of a Registered Security affected by such event, at his address as
  it appears in the Security Register, not later than the latest date, and
  not earlier than the earliest date, prescribed for the giving of such
  notice; and
 
    (b) such notice shall be sufficiently given to Holders of Bearer
  Securities if published in an Authorized Newspaper in The City of New York
  and in such other city or cities as may be specified in such Securities on
  a Business Day at least twice, 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.
 
                                       8
<PAGE>
 
  In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice to Holders of
Registered Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder of a Registered Security shall
affect the sufficiency of such notice with respect to other Holders of
Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein.
 
  In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect
in any notice so published, shall affect the sufficiency of any notice to
Holders of Registered Securities given as provided herein.
 
  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 of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
 
Section 107. Language of Notices, Etc.
 
  Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
 
Section 108. Conflict with Trust Indenture Act.
 
  If any provision hereof limits, qualifies or conflicts with duties imposed by
the Trust Indenture Act, such imposed duties shall control.
 
Section 109. Effect of Headings and Table of Contents.
 
  The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
 
Section 110. Successors and Assigns.
 
  All covenants and agreements in this Indenture by the Company and the
Guarantor shall bind each such Person's successors and assigns, whether so
expressed or not.
 
Section 111. Separability Clause.
 
  In case any provision in this Indenture or the Securities or coupons shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
 
Section 112. Benefits of Indenture.
 
  Nothing in this Indenture or the Securities or coupons, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders of Securities and coupons, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
 
 
                                       9
<PAGE>
 
Section 113. Exemption from Individual Liability.
 
  No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or the Guarantor or
of any successor corporation of either, either directly or through the Company
or the Guarantor, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely the corporate obligations of the Company and the Guarantor,
respectively, and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or the Guarantor or any successor
corporation of either, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom,
are hereby expressly waived and released as a condition of and as a
consideration for, the execution of this Indenture and the issue of such
Securities.
 
Section 114. Governing Law.
 
  This Indenture and the Securities, the Guarantees and the coupons shall be
governed by and construed in accordance with the internal laws (as opposed to
conflicts of laws provisions) of the State of Illinois.
 
Section 115. Legal Holidays.
 
  In any case where any Interest Payment Date, Redemption Date or Stated
Maturity Date of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities or coupons other than a provision in the Securities of any series
which specifically states that such provision shall apply in lieu of this
Section) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity Date, provided that no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity Date, as the case may be.
 
                                  ARTICLE TWO
 
                                 Security Forms
 
Section 201. Forms Generally.
 
  The Registered Securities, if any, of each series and the Bearer Securities,
if any, of each series and related coupons shall be in substantially the forms
set forth in Exhibits A or B to this Indenture, or in such other form
(including permanent global form) as shall be established by or pursuant to a
Resolution of the Company or in one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities or coupons, as evidenced by their execution
of the Securities or coupons. If temporary Securities of any series are issued
in global form as permitted by Section 304, the form thereof shall be
established as provided in the preceding sentence. If the forms of Securities
or coupons of any series
 
                                       10
<PAGE>
 
(or any such temporary global Security) are established by action taken
pursuant to a Resolution of the Company, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery
of such Securities (or any such temporary global Security) or coupons.
 
  Unless otherwise specified as contemplated by Section 301, Securities in
bearer form shall have interest coupons attached.
 
  The definitive Securities and coupons, if any, shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities or coupons.
 
Section 202. Form of Trustee's Certificate of Authentication.
 
  The Trustee's certificates of authentication shall be in substantially the
following form:
 
This is one of the Securities of the series designated herein and referred to
in the within-mentioned Indenture.
 
                                          Harris Trust and Savings Bank,
                                          as Trustee
 
                                          By _________________________________
                                                    Authorized Officer
 
Section 203. Securities in Global Form.
 
  If Securities of a series are issuable in global form, as specified as
contemplated by Section 301, then, notwithstanding clause (k) of Section 301
and the provisions of Section 302, any such Security shall represent such of
the Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of Outstanding Securities
represented thereby shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or
in the Company Order to be delivered to the Trustee pursuant to Section 303 or
Section 304; provided, that such endorsement shall be made by the Common
Depository with respect to temporary global securities in bearer form. Subject
to the provisions of Section 303 and, if applicable, Section 304, the Trustee
shall deliver and redeliver any Security in permanent global form in the manner
and upon instructions given by the Person or Persons specified therein or in
the applicable Company Order. If a Company Order pursuant to Section 303 or 304
has been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel.
 
  The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
 
 
                                       11
<PAGE>
 
  Notwithstanding the provisions of Sections 201 and 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
 
  Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Guarantor, the Trustee and any agent of
the Company, the Guarantor and the Trustee shall treat a person as the Holder
of such principal amount of Outstanding Securities represented by a permanent
global Security as shall be specified in a written statement of the Holder of
such permanent global Security or, in the case of a permanent global Security
in bearer form, of Euro-clear or CEDEL S.A. and produced to the Trustee by such
Person.
 
                                 ARTICLE THREE
 
                                 The Securities
 
Section 301. Amount Unlimited; Issuable in Series.
 
  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 a Resolution of the Company and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate of the Company (which shall comply with Section 102 ), or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series:
 
    (a) the title of the Securities of the series (which shall distinguish
  the Securities of the series from all other Securities);
 
    (b) any limit upon the aggregate principal amount of the Securities of
  the 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 the
  series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
  Securities which, pursuant to Section 303, are deemed never to have been
  authenticated and delivered hereunder);
 
    (c) whether Securities of the series are to be issuable as Registered
  Securities, Bearer Securities or both, whether any Securities of the series
  are to be issuable initially in temporary global form and whether any
  Securities of the series are to be issuable in permanent global form with
  or without coupons and, if so, (i) whether beneficial owners of interests
  in any such permanent global Security may exchange such interests for
  Securities of such series and of like tenor of any authorized form and
  denomination and the circumstances under which any such exchanges may
  occur, if other than in the manner provided in Section 305, and (ii) the
  name of the Common Depository or the U.S. Depository, as the case may be,
  with respect to any global Security;
 
    (d) the Person to whom any interest on any Registered Security of the
  series shall be payable, if other than the Person in whose name that
  Security (or one or more Predecessor Securities) is registered at the close
  of business on the Regular Record Date for such interest, the manner in
  which, or the Person to whom, any interest on any Bearer Security of the
  series shall be payable, if otherwise than upon presentation and surrender
  of the coupons appertaining thereto as they severally mature, and the
  extent to which, or the manner in which, any interest payable on a
  temporary global Security on an Interest Payment Date will be paid if other
  than in the manner provided in Section 304;
 
    (e) the date or dates on which the principal of the Securities of the
  series is payable and whether such date or dates may be extended at the
  option of the Company;
 
    (f) the rate or rates (or formula for determining such rate or rates) at
  which the Securities of the series shall bear interest, if any, the date or
  dates from which any such interest shall accrue, the Interest
 
                                       12
<PAGE>
 
  Payment Dates on which any such interest shall be payable, and the Regular
  Record Date for any interest payable on any Registered Securities on any
  Interest Payment Date;
 
    (g) whether the interest rate or interest rate formula, as the case may
  be, for Securities of the series may be reset at the option of the Company
  and, if so, the date or dates on which such interest rate or interest rate
  formula, as the case may be, may be reset;
 
    (h) the place or places where, subject to the provisions of Section 1002,
  the principal of and any premium and interest on Securities of the series
  shall be payable, any Registered Securities of the series may be
  surrendered for registration of transfer, Securities of the series may be
  surrendered for exchange and notices and demands to or upon the Company or
  the Guarantor in respect of the Securities of the series and this Indenture
  may be served;
 
    (i) the period or periods within which, the price or prices at which and
  the terms and conditions upon which Securities of the series may be
  redeemed, in whole or in part, at the option of the Company or repaid at
  the option of the Holders;
 
    (j) the obligation, if any, of the Company to redeem or purchase
  Securities of the series pursuant to any sinking fund or analogous
  provisions or at the option of a Holder thereof and the period or periods
  within which, the price or prices at which and the terms and conditions
  upon which Securities of the series shall be redeemed or purchased, in
  whole or in part, pursuant to such obligation;
 
    (k) the denominations in which any Registered Securities of the series
  shall be issuable, if other than denominations of $1,000 and any integral
  multiple thereof, and the denomination or denominations in which any Bearer
  Securities of the series shall be issuable, if other than the denomination
  of $5,000;
 
    (1) the currency or currencies, including composite currencies, in which
  payment of the principal of and any premium and interest on the Securities
  of the series shall be payable if other than the currency of the United
  States;
 
    (m) if the amount of payments of principal of and any premium or interest
  on the Securities of the series may be determined with reference to an
  index, the manner in which such amounts shall be determined;
 
    (n) if other than the principal amount thereof, the portion of the
  principal amount of any Securities of the series which shall be payable
  upon declaration of acceleration of the Maturity thereof pursuant to
  Section 502;
 
    (o) any additional Events of Default or restrictive covenants with
  respect to Securities of such series which are not set forth herein;
 
    (p) the application, if any, of Section 403 to the Securities of the
  series;
 
    (q) the application, if any, of Section 1008 to the Securities of the
  series; and
 
    (r) any other terms of the series (which terms shall not be inconsistent
  with the provisions of this Indenture).
 
  All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to the Resolution referred to above and (subject to
Section 303) set forth in the Officers' Certificate referred to above or in any
such indenture supplemental hereto.
 
  If any of the terms of the series are established by action taken pursuant to
a Resolution of the Company, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
 
 
                                       13
<PAGE>
 
Section 302. Denominations.
 
  Unless otherwise provided as contemplated by Section 301 with respect to any
series of Securities, any Registered Securities of a series shall be issuable
in denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of a series shall be issuable in the denomination of $5,000.
 
Section 303. Execution, Authentication, Delivery and Dating.
 
  The Securities shall be executed on behalf of the Company by any one of the
President, a Vice President, the Treasurer or an Assistant Treasurer of the
Company and the Guarantees endorsed thereon shall be executed on behalf of the
Guarantor by any one of the Chairman, a Vice Chairman, the President, a Vice
President or the Treasurer of the Guarantor, under its corporate seal
reproduced thereon. The signature of any of these officers on the Securities or
Guarantees may be manual or facsimile. Coupons shall bear the facsimile
signature of any such officer of the Company.
 
  Securities, coupons and Guarantees bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company or the
Guarantor, as the case may be, shall bind the Company and the Guarantor, as the
case may be, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities and Guarantees or did not hold such offices at the date of such
Securities and Guarantees.
 
  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 duly executed
Guarantees endorsed thereon, together with any coupons appertaining thereto,
executed by the Company, to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Securities; provided, however, that, in connection with its original
issuance, no Bearer Security shall be mailed or otherwise delivered to any
location in the United States; and provided, further, that a Bearer Security
may be delivered in connection with its original issuance only if the Person
entitled to receive such Bearer Security shall have furnished a certificate in
the form set forth in Exhibit C.1 to this Indenture, dated no earlier than 15
days prior to the earlier of the date on which such Bearer Security is
delivered and the date on which any temporary Security first becomes
exchangeable for such Bearer Security in accordance with the terms of such
temporary Security and this Indenture. If any Security shall be represented by
a permanent global Bearer Security, then, for purposes of this Section and
Section 304, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
global Security shall be deemed to be delivery in connection with its original
issuance of such beneficial owner's interest in such permanent global Security.
Except as permitted by Section 304 or 306, the Trustee shall not authenticate
and deliver any Bearer Security unless all appurtenant coupons for interest
then matured have been detached and cancelled.
 
  If the forms or terms of the Securities of the series and any related coupons
have been established in or pursuant to one or more Resolutions of the Company
as permitted by Sections 201 and 301, 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 601) shall be fully protected in relying upon, an Opinion of Counsel
stating:
 
    (a) if the forms of such Securities and any coupons have been established
  by or pursuant to a Resolution of the Company as permitted by Section 201,
  that such forms have been established in conformity with the provisions of
  this Indenture;
 
    (b) if the terms of such Securities and any coupons have been established
  by or pursuant to a Resolution of the Company as permitted by Section 301,
  that such terms have been established in conformity with the provisions of
  this Indenture;
 
    (c) that such Securities with Guarantees endorsed thereon, together with
  any coupons appertaining thereto, 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 constitute valid and
  legally binding
 
                                       14
<PAGE>
 
  obligations of the Company and the Guarantor, enforceable in accordance
  with their terms, subject, as to enforcement, to bankruptcy, insolvency,
  reorganization and other laws of general applicability relating to or
  affecting the enforcement of creditors' rights and to general equity
  principles; and
 
    (d) such other matters as the Trustee may reasonably request.
 
  If such forms or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
 
  Notwithstanding the provisions of Section 301 and of the preceding paragraph,
if all Securities of a series are not to be originally issued at one time, it
shall not be necessary to deliver the Officers' Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
 
  Each Registered Security shall be dated the date of its authentication, and
each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date of original issuance of the first Security of such series
to be issued.
 
  No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been duly authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309 together with a written statement (which need not comply with Section 102
and need not be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.
 
Section 304. Temporary Securities.
 
  Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities with duly executed Guarantees endorsed thereon which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form or, if
authorized, in bearer form with one or more coupons or without coupons, and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities and Guarantees may determine, as
evidenced by their execution of such Securities and Guarantees. In the case of
any series issuable as Bearer Securities, such temporary Securities may be in
global form.
 
  Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 in a Place
of Payment for such series for the purpose of exchanges of Securities of such
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series (accompanied by any unmatured
coupons
 
                                       15
<PAGE>
 
appertaining thereto) the Company and the Guarantor shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like aggregate
principal amount of definitive Securities of the same series and of like tenor
of authorized denominations; provided, however, that no definitive Bearer
Security shall be delivered in exchange for a temporary Registered Security;
and provided, further, that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in Section 303.
 
  If temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the
"Common Depositary"), for the benefit of Euro-clear and CEDEL S.A., for credit
to the respective accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct).
 
  Without unnecessary delay but in any event not later than the date specified
in, or determined pursuant to the terms of, any such temporary global Security
(the "Exchange Date"), the Company shall deliver to the Trustee definitive
Securities, in aggregate principal amount equal to the principal amount of such
temporary global Security, or, if so specified as contemplated by Section 301,
a permanent global Security, in either case, executed by the Company with a
duly executed Guarantee endorsed thereon. On or after the Exchange Date such
temporary global Security shall be surrendered by the Common Depositary to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
from time to time in part, for definitive Securities without charge and the
Trustee shall authenticate and deliver, in exchange for each portion of such
temporary global Security, an equal aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like tenor as
the portion of such temporary global Security to be exchanged with a duly
executed Guarantee endorsed thereon. The definitive Securities to be delivered
in exchange for any such temporary global Security shall be in definitive
bearer form, definitive registered form, permanent global bearer form or
permanent global registered form, or any combination thereof, as specified as
contemplated by Section 301, and, if any combination thereof is so specified,
as requested by the beneficial owner thereof; provided, however, that, unless
otherwise specified in such temporary global Security, upon such presentation
by the Common Depository, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euro-
clear as to the portion of such temporary global Security held for its account
then to be exchanged and a certificate dated the Exchange Date or a subsequent
date and signed by CEDEL S.A. as to the portion of such temporary global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit C.2 to this Indenture; and provided, further, that definitive Bearer
Securities shall be delivered in exchange for a portion of a temporary global
Security only in compliance with the requirements of Section 303.
 
  Unless otherwise specified in such temporary global Security, the interest of
a beneficial owner of Securities of a series in a temporary global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euro-clear
or CEDEL S.A., as the case may be, to request such exchange on his behalf and
delivers to Euro-clear or CEDEL S.A., as the case may be, a certificate in the
form set forth in Exhibit C.1 to this Indenture, dated no earlier than 15 days
prior to the Exchange Date, copies of which certificate shall be available from
the offices of Euro-clear and CEDEL S.A., the Trustee, any Authenticating Agent
appointed for such series of Securities and each Paying Agent. Unless otherwise
specified in such temporary global Security, any such exchange shall be made
free of charge to the beneficial owners of such temporary global Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like in the event that such Person
does not take delivery of such definitive Securities in person at the offices
of Euro-clear or CEDEL S.A. Definitive Securities in bearer form to be
delivered in exchange for any portion of a temporary global Security shall be
delivered only outside the United States.
 
  Until exchanged in full as hereinabove provided, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of
 
                                       16
<PAGE>
 
such series occurring prior to the applicable Exchange Date shall be payable to
Euro-clear and CEDEL S.A. on such Interest Payment Date upon delivery by Euro-
clear and CEDEL S.A. to the Trustee of a certificate or certificates in the
form set forth in Exhibit C.3 to this Indenture, for credit without further
interest on or after such Interest Payment Date to the respective accounts of
the Persons who are the beneficial owners of such temporary global Security on
such Interest Payment Date and who have each delivered to Euro-clear or CEDEL
S.A., as the case may be, a certificate in the form set forth in Exhibit C.4 to
this Indenture. Any interest so received by Euro-clear and CEDEL S.A. and not
paid as herein provided shall be returned to the Trustee immediately prior to
the expiration of two years after such Interest Payment Date in order to be
repaid to the Company in accordance with Section 1003.
 
Section 305. Registration, Registration of Transfer and Exchange.
 
  With respect to the Securities of each series, the Company shall cause to be
kept at an office or agency to be maintained by the Company in accordance with
Section 1002 a register (being the combined register of the Security Registrar
and all transfer agents designated pursuant to Section 1002 for the purpose of
registration of transfer of Securities and sometimes collectively referred to
as the "Security Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Registered
Securities and the registration of transfers of Registered Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein
provided.
 
  Upon surrender for registration of transfer of any Registered Security of any
series at the office or agency of the Company maintained pursuant to Section
1002 for such purpose in a Place of Payment for such series, the Company shall
execute, and the Trustee shall authenticate and deliver (with duly executed
Guarantees endorsed thereon), in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
 
  At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver (with duly executed
Guarantees endorsed thereon), the Securities which the Holder making the
exchange is entitled to receive. Except as otherwise specified as contemplated
by Section 301, Bearer Securities may not be issued in exchange for Registered
Securities.
 
  At the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount and tenor, upon surrender of the
Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Company, the Guarantor and the Trustee if there is 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 such
a payment shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that, except as otherwise provided
in Section 1002, interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and like tenor after the close of
business at such office or agency on (a) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (b) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of
 
                                       17
<PAGE>
 
Defaulted Interest, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date or proposed date for payment, as
the case may be, and interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such coupon
when due in accordance with the provisions of this Indenture.
 
  Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver (with duly executed
Guarantees endorsed thereon), the Securities which the Holder making the
exchange is entitled to receive.
 
  Notwithstanding the foregoing, except as otherwise specified as contemplated
by Section 301, any permanent global Security shall be exchangeable only as
provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301,
then without unnecessary delay but in any event not later than the earliest
date on which such interests may be so exchanged, the Company shall deliver to
the Trustee definitive Securities of that series (with duly executed Guarantees
endorsed thereon) in aggregate principal amount equal to the principal amount
of such permanent global Security, executed by the Company. On or after the
earliest date on which such interests may be so exchanged, such permanent
global Securities shall be surrendered from time to time by the Common
Depository or the U.S. Depository, as the case may be, and in accordance with
instructions given to the Trustee and the Common Depository or the U.S.
Depository, as the case may be (which instructions shall be in writing but need
not comply with Section 102 or be accompanied by an Opinion of Counsel), as
shall be specified in the Company Order with respect thereto to the Trustee, as
the Company's agent for such purpose, to be exchanged, in whole or in part, for
definitive Securities of the same series without charge. The Trustee shall
authenticate and make available for delivery, in exchange for each portion of
such surrendered permanent global Security, a like aggregate principal amount
of definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such permanent global Security to be exchanged
which (unless the Securities of the series are not issuable both as Bearer
Securities and as Registered Securities, in which case the definitive
Securities exchanged for the permanent global Security shall be issuable only
in the form in which the Securities are issuable, as specified as contemplated
by Section 301) shall be in the form of Bearer Securities or Registered
Securities, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of that series to be redeemed and ending on the relevant Redemption
Date; and provided, further, that no Bearer Security delivered in exchange for
a portion of a permanent global Security shall be mailed or otherwise delivered
to any location in the United States. Promptly following any such exchange in
part, such permanent global Security shall be returned by the Trustee to the
Common Depository or the U.S. Depository, as the case may be, or such other
depositary or Common Depository or U.S. Depository referred to above in
accordance with the instructions of the Company referred to above. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such
exchange occurs on (a) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (b)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, such interest or Defaulted Interest will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
 
  All Securities (with Guarantees endorsed thereon) issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the Guarantor, evidencing the same debt and
entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
 
                                       18
<PAGE>
 
  Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Guarantor or
the Trustee or any transfer agent) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company, the
Guarantor and the Security Registrar or any transfer agent duly executed, by
the Holder thereof or his attorney duly authorized in writing.
 
  No service charge shall be made for any registration of transfer or exchange
of Securities, but the Company and the Guarantor 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 304, 906 or 1107 not involving any transfer.
 
  The Company shall not be required (a) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (i) if Securities of the series
are issuable only as Registered Securities, the day of the mailing of the
relevant notice of redemption and (ii) if Securities of the series are issuable
as Bearer Securities, the day of the first publication of the relevant notice
of redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (b) to register the transfer of or exchange any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (c) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor, provided
that such Registered Security shall be simultaneously surrendered for
redemption.
 
Section 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
 
  If any mutilated Security or a Security with a mutilated coupon appertaining
to it is surrendered to the Trustee, the Company shall execute and the Trustee
shall authenticate and deliver (with the Guarantee thereon executed by the
Guarantor) in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
 
  If there shall be delivered to the Company, the Guarantor and the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon and (b) such security or indemnity as may be required by
them to save each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon
has been acquired by a bona fide purchaser, the Company shall execute and the
Trustee shall authenticate and deliver (with the Guarantee thereon executed by
the Guarantor), in lieu of any such destroyed, lost or stolen Security or in
exchange for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a new
Security of the same series and of like tenor and principal amount and bearing
a number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains.
 
  In case any such mutilated, destroyed, lost or stolen Security or coupon has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon; provided,
however, that the principal of (and premium, if any) and any interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
 
  Upon the issuance of any new Security under this Section, the Company and the
Guarantor may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
 
                                       19
<PAGE>
 
  Every new Security of any series, with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
and every new Guarantee delivered in connection therewith, shall constitute an
original additional contractual obligation of the Company and the Guarantor,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and any such new Security, Guarantee and coupons, if any, shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series and their coupons, if any, and
Guarantees duly issued hereunder.
 
  The provisions of this Section are exclusive and shall preclude (to the
extent lawful) any other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
 
Section 307. Payment of Interest; Interest Rights Preserved.
 
  Unless otherwise provided as contemplated by Section 301 with respect to any
series of Securities, interest on any Registered Security which is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
 
  Any interest on any Registered Security of any series which is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company or the
Guarantor, at its election in each case, as provided in clause (a) or (b)
below:
 
    (a) The Company or the Guarantor may elect to make payment of any
  Defaulted Interest to the Persons in whose names the Registered Securities
  of such series (or their respective Predecessor Securities) are registered
  at the close of business on a Special Record Date for the payment of such
  Defaulted Interest, which shall be fixed in the following manner. The
  Company or the Guarantor, as appropriate, shall notify the Trustee in
  writing of the amount of Defaulted Interest proposed to be paid on each
  Registered Security of such series and the date of the proposed payment,
  and at the same time the Company or the Guarantor shall deposit with the
  Trustee an amount of money equal to the aggregate amount proposed to be
  paid in respect of such Defaulted Interest or shall make arrangements
  satisfactory to the Trustee for such deposit prior to the date of the
  proposed payment, such money when deposited to be held in trust for the
  benefit of the Persons entitled to such Defaulted Interest as in this
  clause provided. Thereupon the Trustee shall fix a Special Record Date for
  the payment of such Defaulted Interest which shall be not more than 15 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. The Trustee shall promptly notify the Company or the
  Guarantor of such Special Record Date and, in the name and at the expense
  of the Company or the Guarantor, 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 Registered
  Securities of such series at the address of such Holder as it appears in
  the Security Register, not less than 10 days prior to such Special Record
  Date. Notice of the proposed payment of such Defaulted Interest and the
  Special Record Date therefor having been so mailed, such Defaulted Interest
  shall be paid to the Persons in whose names the Registered Securities of
  such series (or their respective Predecessor Securities) are registered at
  the close of business on such Special Record Date and shall no longer be
  payable pursuant to the following clause (b).
 
    (b) The Company or the Guarantor may make payment of any Defaulted
  Interest on the Registered Securities of any series in any other lawful
  manner not inconsistent with the requirements of any securities exchange on
  which such Securities may be listed, and upon such notice as may be
  required by such exchange, if, after notice given by the Company or the
  Guarantor, as appropriate, to the Trustee of the proposed payment pursuant
  to this clause, such manner of payment shall be deemed practicable by the
  Trustee.
 
                                       20
<PAGE>
 
  Subject to the foregoing provisions of this Section and Section 305, 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.
 
Section 308. Persons Deemed Owners.
 
  Except as otherwise provided in Section 203, prior to due presentment of a
Registered Security for registration of transfer, the Company, the Guarantor,
the Trustee and any agent of the Company, the Guarantor or the Trustee may
treat the Person in whose name such 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 Sections 305 and 307) any
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Guarantor, the Trustee
nor any agent of the Company, the Guarantor or the Trustee shall be affected by
notice to the contrary.
 
  Title to any Bearer Security and any coupons appertaining thereto shall pass
by delivery. Except as otherwise provided in Section 203, the Company, the
Guarantor, the Trustee and any agent of the Company, the Guarantor or the
Trustee may treat the bearer of any Bearer Security and the bearer of any
coupon as the absolute owner of such Security or coupon for the purpose 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 Guarantor, the Trustee nor any agent of the Company, the Guarantor
or the Trustee shall be affected by notice to the contrary.
 
Section 309. Cancellation.
 
  All Securities and coupons surrendered for payment, redemption, registration
of transfer or exchange or for credit against any sinking fund payment shall,
if surrendered to any Person other than the Trustee, be delivered to the
Trustee. All Securities and coupons so delivered shall be promptly cancelled by
the Trustee. All Securities and coupons held by the Trustee pending such
cancellation shall be deemed to be delivered for cancellation for all purposes
of this Indenture and the Securities. The Company or the Guarantor may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company or the Guarantor may
have acquired in any manner whatsoever, and may deliver to the Trustee (or to
any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities and coupons held by the Trustee shall be
destroyed by the Trustee and the Trustee shall furnish a certificate of such
destruction to the Company and the Guarantor.
 
Section 310. Computation of Interest.
 
  Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
 
Section 311. Unconditional Guarantee.
 
  The Guarantee to be set forth on each Security shall be in substantially the
following form:
 
    For Value Received, Ameritech Corporation, a Delaware corporation (the
  "Guarantor"), hereby unconditionally guarantees to the Holder of the
  Security upon which this Guarantee is endorsed [and any coupons
  appertaining thereto] the due and punctual payment of the principal of,
  sinking fund payment, if any, premium, if any, or interest on said
  Security, when and as the same shall become due and payable, whether at
  maturity, upon redemption or otherwise, according to the terms thereof and
  of the Indenture referred to therein.
 
    The Guarantor agrees to determine, at least one business day prior to the
  date upon which a payment of principal of, sinking fund payment, if any,
  premium, if any, or interest on said Security is due and payable, whether
  the Company has available the funds to make such payment as the same shall
 
                                       21
<PAGE>
 
  become due and payable. In case of the failure of the Company punctually to
  pay any such principal, sinking fund payment, if any, premium, if any, or
  interest, the Guarantor hereby agrees to cause any such payment to be made
  punctually when and as the same shall become due and payable, whether at
  maturity, upon redemption, or otherwise, and as if such payment were made
  by the Company.
 
    The Guarantor hereby agrees that its obligations hereunder shall be
  unconditional, irrevocable, and absolute, irrespective of the validity,
  regularity, or enforceability of said Security [or coupon] or said
  Indenture, the absence of any action to enforce the same, any waiver or
  consent by the Holder of said Security [or coupon] with respect to any
  provisions thereof, the recovery of any judgment against the Company or any
  action to enforce the same, or any other circumstance which might otherwise
  constitute a legal or equitable discharge or defense of a guarantor. The
  Guarantor hereby waives diligence, presentment, demand of payment, filing
  of claims with a court in the event of merger or bankruptcy of the Company,
  any right to require a proceeding first against the Company, protest or
  notice with respect to said Security [or coupon] or indebtedness evidenced
  thereby, and all demands whatsoever and covenants that this Guarantee will
  not be discharged except by complete performance of the obligations
  contained in said Security and in this Guarantee.
 
    The Guarantor shall be subrogated to all rights of the Holder of said
  Security [and to the rights of any Holder of any coupon] against the
  Company in respect of any amounts paid by the Guarantor pursuant to the
  provisions of this Guarantee; provided, however, that the Guarantor shall
  not, without the consent of the Holders of all of the Securities [and the
  Holders of all coupons] then outstanding, be entitled to enforce or to
  receive any payments arising out of or based upon such right of subrogation
  until the principal of and premium, if any, and interest on all Securities
  shall have been paid in full or payment thereof shall have been provided
  for in accordance with said Indenture.
 
    Notwithstanding anything to the contrary contained herein, if following
  any payment of principal or interest by the Company on the Securities to
  the Holders of the Securities it is determined by a final decision of a
  court of competent jurisdiction that such payment shall be avoided by a
  trustee in bankruptcy (including any debtor-in-possession) as a preference
  under 11 U.S.C. Section 547 and such payment is paid by such Holder to such
  trustee in bankruptcy, then and to the extent of such repayment, the
  obligations of the Guarantor hereunder shall remain in full force and
  effect.
 
    The Guarantor hereby certifies and warrants that all acts, conditions and
  things required to be done and performed and to have happened prior to the
  creation and issuance of this Guarantee and to constitute the same as the
  legal, valid and binding obligation of the Guarantor enforceable in
  accordance with its terms, have been done and performed and have happened
  in due and strict compliance with applicable laws.
 
    This Guarantee shall not be valid or become obligatory for any purpose
  with respect to a Security until the certificate of authentication on such
  Security shall have been signed by the Trustee (or the Authenticating
  Agent).
 
    This Guarantee shall be governed by the internal laws (as opposed to
  conflicts of laws provisions) of the State of Illinois.
 
    All terms used in this Guarantee which are defined in the Indenture shall
  have the meanings assigned to them in the Indenture.
 
    In Witness Whereof, Ameritech Corporation has caused this Guarantee to be
  signed in its corporate name by the facsimile signature of one of its
  officers thereunto duly authorized and has caused a facsimile of its
  corporate seal to be affixed hereunto or imprinted or otherwise reproduced
  hereon.
 
                                          Ameritech Corporation
 
                                          By: ________________________________
                                                    Authorized Officer
 
                                       22
<PAGE>
 
  The form of Guarantee shall be modified or supplemented to the extent
necessary to reflect any additional obligations of the Guarantor applicable to
it pursuant to the terms of any series of Securities.
 
Section 312. Execution of Guarantees.
 
  To evidence the Guarantee to the Holders specified in Section 311, the
Guarantor hereby agrees to execute the Guarantees, in substantially the form
above recited, to be endorsed on each Security authenticated and delivered by
the Trustee (or the Authenticating Agent). Each such Guarantee shall be signed
on behalf of the Guarantor as set forth in Section 303 prior to the
authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee (or the Authenticating Agent), after the
authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of the Guarantor.
 
Section 313. Assumption by Guarantor.
 
  (a) The Guarantor may, without the consent of the Holders, assume all of the
rights and obligations of the Company hereunder with respect to a series of
Securities and under the Securities of such series if, after giving effect to
such assumption, no Event of Default or event which with the giving of notice
or lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing. Upon such an assumption, the Guarantor shall
execute a supplemental indenture evidencing its assumption of all such rights
and obligations of the Company and the Company shall be released from its
liabilities hereunder and under such Securities as obligor on the Securities of
such series.
 
  (b) The Guarantor shall assume all of the rights and obligations of the
Company hereunder with respect to a series of Securities and under the
Securities of such series if, upon a default by the Company in the due and
punctual payment of the principal, sinking fund payment, if any, premium, if
any, or interest on such Securities, the Guarantor is prevented by any court
order or judicial proceeding from fulfilling its obligations under Section 311
with respect to such series of Securities. Such assumption shall result in the
Securities of such series becoming the direct obligations of the Guarantor and
shall be effected without the consent of the Holders of the Securities of any
series. Upon such an assumption, the Guarantor shall execute a supplemental
indenture evidencing its assumption of all such rights and obligations of the
Company, and the Company shall be released from its liabilities hereunder and
under such Securities as obligor on the Securities of such series.
 
                                  ARTICLE FOUR
 
                           Satisfaction and Discharge
 
Section 401. Satisfaction and Discharge of Indenture.
 
  This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for, and any right to receive additional
amounts as provided in Section 1004) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
 
    (a) either
 
      (i) all Securities theretofore authenticated and delivered and all
    coupons, if any, appertaining thereto (other than (A) coupons
    appertaining to Bearer Securities surrendered for exchange for
    Registered Securities and maturing after such exchange, whose surrender
    is not required or has been waived as provided in Section 305, (B)
    Securities and coupons which have been destroyed, lost or stolen and
    which have been replaced or paid as provided in Section 306, (C)
    coupons appertaining to Securities called for redemption and maturing
    after the relevant Redemption Date, whose surrender has been waived as
    provided in Section 1106, and (D) Securities and coupons for whose
    payment money has theretofore been deposited in trust or segregated and
    held in trust by the Company and thereafter repaid to the Company or
    discharged from such trust, as provided in Section 1003) have been
    delivered to the Trustee for cancellation; or
 
                                       23
<PAGE>
 
      (ii) all such Securities and, in the case of (A) and (B) below, any
    coupons appertaining thereto not theretofore delivered to the Trustee
    for cancellation
 
        (A) have become due and payable, or
 
        (B) will become due and payable at their Stated Maturity Date
      within one year, or
 
        (C) are to be called for redemption within one year under
      arrangements satisfactory to the Trustee for the giving of notice of
      redemption by the Trustee in the name, and at the expense, of the
      Company,
 
  and the Company or the Guarantor has deposited or caused to be deposited
  with the Trustee as trust funds in trust for the purpose an amount
  sufficient to pay and discharge the entire indebtedness on such Securities
  and coupons not theretofore delivered to the Trustee for cancellation, for
  principal (and premium, if any) and any interest to the date of such
  deposit (in the case of Securities which have become due and payable) or to
  the Stated Maturity Date or Redemption Date, as the case may be;
 
    (b) the Company or the Guarantor has paid or caused to be paid all other
  sums payable hereunder by the Company and the Guarantor; and
 
    (c) the Company or the Guarantor has delivered to the Trustee an
  Officers' Certificate and an Opinion of Counsel, each stating that all
  conditions precedent herein provided for relating to the satisfaction and
  discharge of this Indenture have been complied with.
 
  Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and the Guarantor to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614
and, if money shall have been deposited with the Trustee pursuant to clause
(a)(ii) of this Section, the obligations of the Trustee under Section 402 and
the last paragraph of Section 1003 shall survive.
 
Section 402. Application of Trust Money.
 
  Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401, 403 or 1008 shall be held
in trust and applied by it, in accordance with the provisions of the
Securities, the coupons and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and any interest for whose payment such money has been
deposited with the Trustee.
 
Section 403. Satisfaction, Discharge and Defeasance of Securities of any
Series.
 
  If this Section 403 is specified, as contemplated by Section 301, to be
applicable to Securities of any series, then notwithstanding Section 401, (a)
the Company shall be deemed to have paid and discharged the entire indebtedness
on all the Outstanding Securities of any such series; (b) the provisions of
this Indenture as it relates to such Outstanding Securities shall no longer be
in effect (except as to the rights of Holders of Securities to receive, from
the trust fund described in subparagraph (i) below, payment of (x) the
principal of (and premium, if any) and any installment of principal of (and
premium, if any) or interest on such Securities on the Stated Maturity Date of
such principal (and premium, if any) or installment of principal (and premium,
if any) or interest or (y) any mandatory sinking fund payments or analogous
payments applicable to the Securities of that series on that day on which such
payments are due and payable in accordance with the terms of the Indenture and
of such Securities, the Company's obligations with respect to such Securities
under Sections 304, 305, 306, 1002, 1003 and 1004 and the rights, powers,
trusts, duties and immunities of the Trustee hereunder, including those under
Section 607 hereof); and (c) the Trustee, at the expense of the Company, shall,
upon Company Request, execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, when
 
                                       24
<PAGE>
 
    (i) either
 
      (A) with respect to all Outstanding Securities of such series, with
    reference to this Section 403, the Company has deposited or caused to
    be deposited with the Trustee irrevocably (but subject to the
    provisions of Section 402 and the last paragraph of Section 1003), as
    trust funds in trust, specifically pledged as security for, and
    dedicated solely to, the benefit of the Holders of the Securities of
    that series, (1) lawful money of the United States in an amount, or (2)
    U.S. Government Obligations which through the payment of interest and
    principal in respect thereof in accordance with their terms will
    provide not later than the opening of business on the due dates of any
    payment referred to in clause (x) or (y) of this subparagraph (i)(A)
    lawful money of the United States in an amount, or (3) a combination
    thereof, sufficient, in the opinion of a nationally recognized firm of
    independent public accountants expressed in a written certification
    thereof delivered to the Trustee, to pay and discharge (x) the
    principal of (and premium, if any) and each installment of principal
    (and premium, if any) and interest on the Outstanding Securities of
    that series on the Stated Maturity Date of such principal or
    installment of principal or interest and (y) any mandatory sinking fund
    payments or analogous payments applicable to Securities of such series
    on the day on which such payments are due and payable in accordance
    with the terms of this Indenture and of such Securities; or
 
      (B) the Company has properly fulfilled such other means of
    satisfaction and discharge as is specified, as contemplated by Section
    301, to be applicable to the Securities of such series;
 
    (ii) the Company has paid or caused to be paid all other sums payable
  with respect to the Outstanding Securities of such Series;
 
    (iii) such deposit will not result in a breach or violation of, or
  constitute a default under, this Indenture or any other agreement or
  instrument to which the Company is a party or by which it is bound;
 
    (iv) no Event of Default or event which with the giving of notice or
  lapse of time, or both, would become an Event of Default with respect to
  the Securities of that series shall have occurred and be continuing on the
  date of such deposit and no Event of Default under Section 501(e) or
  Section 501(f) or event which with the giving of notice or lapse of time,
  or both, would become an Event of Default under Section 501(e) or Section
  501(f) shall have occurred and be continuing on the 91st day after such
  date;
 
    (v) the Company has delivered to the Trustee an Opinion of Counsel or a
  ruling from or published by the United States Internal Revenue Service, to
  the effect that Holders of Securities of such series will not recognize
  income, gain or loss for federal income tax purposes as a result of such
  deposit, defeasance and discharge and will be subject to federal income tax
  on the same amount and in the same manner and at the same times as would
  have been the case if such deposit, defeasance and discharge had not
  occurred;
 
    (vi) if the Securities of that series are then listed on any domestic or
  foreign securities exchange, the Company shall have delivered to the
  Trustee an Opinion of Counsel to the effect that such deposit, defeasance
  and discharge will not cause such Securities to be delisted; and
 
    (vii) 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 Outstanding Securities of any such series have
  been complied with and an Opinion of Counsel to the effect that either (A)
  as a result of such deposit and the related exercise of the Company's
  option under this Section 403, registration is not required under the
  Investment Company Act of 1940, as amended, by the Company, the Guarantor,
  the trust funds representing such deposit or the Trustee or (B) all
  necessary registrations under said Act have been effected.
 
  Any deposits with the Trustee referred to in Section 403(i)(A) above shall be
irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance satisfactory to the Trustee. If any
 
                                       25
<PAGE>
 
Outstanding Securities of such series are to be redeemed prior to their Stated
Maturity Date, whether pursuant to any optional redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable escrow
trust agreement shall provide therefor and 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.
 
  Upon the satisfaction of the conditions set forth in this Section 403 with
respect to all the Outstanding 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 Guarantees endorsed thereon shall no longer
be binding upon, or applicable to, the Guarantor; provided, that the Company
shall not be discharged from 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 and the Guarantor shall not be discharged from any
payment obligations in respect of Guarantees endorsed on such Securities.
 
  Notwithstanding the cessation, termination and discharge of all obligations,
covenants and agreements (except as provided above in this Section 403) of the
Company and the Guarantor under this Indenture with respect to any series of
Securities, the obligations of the Company to the Trustee under Section 607,
and the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive with respect to such series of Securities.
 
Section 404. Reinstatement.
 
  If the Trustee is unable to apply any money or U.S. Government Obligations in
accordance with Section 401 or 403 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and the Guarantor's obligations under this
Indenture, the Securities and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 401 or 403 until such time
as the Trustee is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 401 or 403; provided, however, that if
the Company or the Guarantor has made any payment of interest on or principal
of any Securities because of the reinstatement of its obligations, the Company
and the Guarantor shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee.
 
                                  ARTICLE FIVE
 
                                    Remedies
 
Section 501. Events of Default.
 
  "Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
 
    (a) default in the payment of any interest upon any Security of that
  series when it becomes due and payable, and continuance of such default for
  a period of 90 days; or
 
    (b) default in the payment of the principal of (or premium, if any, on)
  any Security of that series at its Maturity; or
 
    (c) default in the deposit of any sinking fund payment, when and as due
  by the terms of a Security of that series; or
 
                                       26
<PAGE>
 
    (d) default in the performance, or breach, of any covenant or warranty of
  the Company or the Guarantor in this Indenture (other than a covenant or
  warranty a default in whose performance or whose breach is elsewhere in
  this Section specifically dealt with or which has expressly been included
  in this Indenture solely for the benefit of series of Securities other than
  that series), and continuance of such default or breach for a period of 90
  days after there has been given, by registered or certified mail, to the
  Company or the Guarantor by the Trustee or to the Company or the Guarantor
  and the Trustee by the Holders of at least 25% in principal amount of the
  Outstanding Securities of that 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) the entry by a court having jurisdiction in the premises of (i) a
  decree or order for relief in respect of the Company or the Guarantor in an
  involuntary case or proceeding under any applicable Federal or State
  bankruptcy, insolvency, reorganization or other similar law or (ii) a
  decree or order adjudging the Company or the Guarantor 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 the Guarantor under any applicable Federal or State law, or
  appointing a custodian, receiver, liquidator, assignee, trustee,
  sequestrator or other similar official of the Company or the Guarantor or
  of any substantial part of its property, 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 90 consecutive days; or
 
    (f) the commencement by the Company or the Guarantor of a voluntary case
  or proceeding under any applicable Federal or State bankruptcy, insolvency,
  reorganization or other similar 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 the Guarantor
  in an involuntary case or proceeding under any applicable Federal or State
  bankruptcy, insolvency, reorganization or other similar 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 the Guarantor or of any
  substantial part of its property 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, or the taking of
  corporate action by the Company or the Guarantor in furtherance of any such
  action.
 
Section 502. Acceleration of Maturity; Rescission and Annulment.
 
  If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company and the Guarantor (and to
the Trustee if given by the Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and
payable.
 
  At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company, the
Guarantor and the Trustee, may rescind and annul such declaration and its
consequences if all Events of Default with respect to Securities of that
series, other than non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
 
  No such rescission shall affect any subsequent default or impair any right
consequent thereon.
 
 
                                       27
<PAGE>
 
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
 
  The Company and the Guarantor covenant that if
 
    (a) default is made in the payment of any interest on any Security when
  such interest becomes due and payable and such default continues for a
  period of 90 days, or
 
    (b) default is made in the payment of the principal of (or premium, if
  any, on) any Security at the Maturity thereof,
 
the Company or the Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities and coupons, the whole amount
then due and payable on such Securities and coupons for principal (and premium,
if any) and any interest and, to the extent that payment of such interest shall
be legally enforceable, interest on any overdue principal (and premium, if any)
and on any overdue interest, at the rate or rates prescribed therefor in such
Securities and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
 
  Until such demand is made by the Trustee, the Company may pay the principal
of (and premium, if any) and interest on the Securities to the Persons entitled
thereto, whether or not the principal (and premium, if any) and interest on the
Securities are overdue.
 
  If the Company or the Guarantor fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceedings to judgment or final decree and may
enforce the same against the Company, the Guarantor 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, the Guarantor or any
other obligor upon such Securities, wherever situated.
 
  If an Event of Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
 
Section 504. Trustee May File Proofs of Claim.
 
  In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Guarantor or any other obligor
upon the Securities or the property of the Company, the Guarantor or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company or the Guarantor for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
 
  (a) to file and prove a claim for the whole amount of principal (and premium,
if any) and any interest owing and unpaid in respect of the Securities and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders of Securities and coupons allowed in such
judicial proceeding, and
 
  (b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to
 
                                       28
<PAGE>
 
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders of Securities and coupons, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607 except amounts arising from the
Trustee's negligence or bad faith.
 
  Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security or coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or coupons or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or coupon in any such proceeding.
 
Section 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
 
  All rights of action and claims under this Indenture or the Securities, the
Guarantees or the coupons may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or coupons or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
 
Section 506. Application of Money Collected.
 
  Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal (or premium, if any)
or interest, upon presentation of the Securities or coupons, or both, as the
case may be, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
 
    First: to the payment of the amounts due the Trustee under Section 607;
 
    Second: to the payment of the amounts then due and unpaid for principal
  of (and premium, if any) and any interest on the Securities and coupons 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 coupons for principal (and
  premium, if any) and any interest, respectively; and
 
    Third: the balance, if any, to the Person or Persons entitled thereto, as
  directed by the Company and the Guarantor.
 
Section 507. Limitations on Suits.
 
  No Holder of any Security of any series or any related coupons shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
 
    (a) such Holder has previously given written notice to the Trustee of a
  continuing Event of Default with respect to the Securities of that series;
 
    (b) the Holders of not less than 25% in principal amount of the
  Outstanding Securities of that series shall have made written request to
  the Trustee to institute proceedings in respect of such Event of Default in
  its own name as Trustee hereunder;
 
    (c) such Holder or Holders have offered to the Trustee reasonable
  indemnity against the costs, expenses and liabilities to be incurred in
  compliance with such request;
 
    (d) the Trustee for 60 days after its receipt of such notice, request and
  offer of indemnity has failed to institute any such proceeding; and
 
    (e) 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 that series;
 
                                       29
<PAGE>
 
it being understood and intended that no one or more of such Holders 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 of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of 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 of such
Holders.
 
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
 
  Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional,
to receive payment of the principal of (and premium, if any) and (subject to
Section 307) any interest on such Security or payment of such coupon on the
Stated Maturity Date or Maturities expressed in such Security or coupon (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
 
Section 509. Restoration of Rights and Remedies.
 
  If the Trustee or any Holder of a Security or coupon 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 the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the
Guarantor, the Trustee and the Holders of Securities and coupons shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding has been instituted.
 
Section 510. Rights and Remedies Cumulative.
 
  Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons 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 511. Delay or Omission Not Waiver.
 
  No delay or omission of the Trustee or of any Holder of any Security or
coupon 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 or by law to the Trustee or to the Holders of Securities or coupons may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
 
Section 512. Control by Holders of Securities.
 
  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, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
 
    (a) such direction shall not be in conflict with any rule of law or with
  this Indenture or expose the Trustee to personal liability or be unduly
  prejudicial to Holders not joining therein, and
 
                                       30
<PAGE>
 
    (b) the Trustee may take any other action deemed proper by the Trustee
  which is not inconsistent with such direction.
 
Section 513. 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 of the
Securities of such series and any related coupons waive any past default
hereunder with respect to the Securities of such series and its consequences,
except a default
 
    (a) in the payment of the principal of (or premium, if any) or any
  interest on any Security of such series, or
 
    (b) in respect of a covenant or provision hereof which under Article Nine
  cannot be modified or amended without the consent of the Holder of each
  Outstanding Security of such series 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, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
 
Section 514. Undertaking for Costs.
 
  All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant
in such suit (other than the Trustee) of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company or the Guarantor, to any suit instituted by
the Trustee, to any suit instituted 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 to any suit instituted by any Holder of any
Security or coupon for the enforcement of the payment of the principal of (or
premium, if any) or any interest on any Security or the payment of any coupon
on or after the Stated Maturity Date or Maturities expressed in such Security
or coupon (or, in the case of redemption, on or after the Redemption Date), or
for the enforcement of the rights granted in any Guarantee.
 
Section 515. Waiver of Stay or Extension Laws.
 
  Each of the Company and the Guarantor 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 each of the
Company and the Guarantor (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, but will suffer and permit the execution of every such power as
though no such law has been enacted.
 
Section 516. Record Date.
 
  The record date for purposes of determining the identity of Holders of
Securities entitled to vote or consent to any action by vote or consent
authorized or permitted under Section 502, 512 or 513 shall be the later of 30
days prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee pursuant to Section 701 prior
to such solicitation.
 
                                       31
<PAGE>
 
                                  ARTICLE SIX
 
                                  The Trustee
 
Section 601. Certain Duties and Responsibilities.
 
  (a) Except during the continuance of an Event of Default,
 
    (i) the Trustee undertakes to perform such duties and only such duties as
  are specifically set forth in this Indenture, and no implied covenants or
  obligations shall be read into this Indenture against the Trustee, except
  as may otherwise be provided in the Trust Indenture Act; 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; but in
  the case of any such certificates or opinions which by any provision hereof
  are specifically required to be furnished to the Trustee, the Trustee shall
  be under a duty to examine the same to determine whether or not they
  conform to the requirements of this Indenture.
 
  (b) In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in 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;
 
    (ii) the Trustee shall not be liable for any error of judgment made in
  good faith by a Responsible Officer, unless it shall be proved that the
  Trustee was negligent in ascertaining the pertinent facts;
 
    (iii) the Trustee shall not be liable with respect to any action taken or
  omitted to be taken by it in good faith in accordance with the direction of
  the Holders of a majority in principal amount of the Outstanding Securities
  of any series relating to the time, method and place of conducting any
  proceeding for any remedy available to the Trustee, or exercising any trust
  or power conferred upon the Trustee, under this Indenture with respect to
  the Securities of such series; 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 rights or powers, if it shall have reasonable grounds for believing
  that repayment of such funds or adequate indemnity against such risk or
  liability is not reasonably assured to it.
 
  (d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
 
Section 602. Notice of Defaults.
 
  Within 90 days after the occurrence of any default hereunder with respect to
the Securities of any series, the Trustee shall transmit in the manner and to
the extent provided in Section 703(c), notice of such default hereunder known
to the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of or any premium or interest on any Security of such series or in the payment
of any sinking fund installment with respect to Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 501(d) with respect to Securities of
 
                                       32
<PAGE>
 
such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, 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 603. Certain Rights of Trustee.
 
  Subject to the provisions of Section 601:
 
    (a) the Trustee may rely and shall be protected in acting or refraining
  from acting upon any resolution, certificate, statement, instrument,
  opinion, report, notice, request, direction, consent, order, bond,
  debenture, note, coupon, other evidence of indebtedness or other paper or
  document believed by it to be genuine and to have been signed or presented
  by the proper party or parties;
 
    (b) any request or direction of the Company mentioned herein shall be
  sufficiently evidenced by a Company Request or Company Order or as
  otherwise expressly provided herein and any resolution of its sole
  shareholder (or, if one exists, its board of directors) may be sufficiently
  evidenced by a Resolution;
 
    (c) whenever in the administration of this Indenture the Trustee shall
  deem it desirable that a matter be proved or established prior to taking,
  suffering or omitting any action hereunder, the Trustee (unless other
  evidence be herein specifically prescribed) may, in the absence of bad
  faith on its part, rely upon an Officer's 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
  hereunder in good faith and in reliance thereon;
 
    (e) the Trustee shall be under no obligation to exercise any of the
  rights or powers vested in it by this Indenture at the request or direction
  of any of the Holders of Securities of any series or any related coupons
  pursuant to this Indenture, unless such Holders shall have offered to the
  Trustee reasonable security or indemnity against the costs, expenses and
  liabilities which might be incurred by it in compliance with such request
  or direction;
 
    (f) the Trustee shall not be bound to make any investigation into the
  facts or matters stated in any resolution, certificate, statement,
  instrument, opinion, report, notice, request, direction, consent, order,
  bond, debenture, note, coupon, other evidence of indebtedness or other
  paper or document, but the Trustee, in its discretion, may make such
  further inquiry or investigation into such facts or matters as it may see
  fit, and, if the Trustee shall determine to make such further inquiry or
  investigation, it shall be entitled to examine the books, records and
  premises of the Company or the Guarantor, personally or by agent or
  attorney;
 
    (g) the Trustee may execute any of the trusts or powers hereunder or
  perform any duties hereunder either directly or by or through agents or
  attorneys and the Trustee shall not be responsible for any misconduct or
  negligence on the part of any agent or attorney appointed with due care by
  it hereunder; and
 
    (h) the Trustee shall not be deemed to have knowledge of a default or an
  Event of Default unless a Responsible Officer of the Trustee has received
  notice thereof or has actual knowledge thereof.
 
Section 604. Not Responsible for Recitals or Issuance of Securities.
 
  The recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) and in any coupons shall be taken as the
statements of the Company and the Guarantor, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities or coupons or the Guarantees. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
 
                                       33
<PAGE>
 
Section 605. May Hold Securities.
 
  The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company or the Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Securities and
coupons and, subject to Sections 608 and 613, may otherwise deal with the
Company and the Guarantor with the same rights it would have if it were not the
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other
agent.
 
Section 606. Money Held in Trust.
 
  Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as
otherwise agreed with the Company and the Guarantor.
 
Section 607. Compensation and Reimbursement.
 
     Each of the Company and the Guarantor agrees
 
    (a) to pay to the Trustee from time to time reasonable compensation for
  all services rendered by it hereunder (which compensation shall not be
  limited by any provision of law in regard to the compensation of a trustee
  of an express trust);
 
    (b) except as otherwise expressly provided herein, to reimburse the
  Trustee upon its request for all reasonable expenses, disbursements and
  advances incurred or made by the Trustee in accordance with any provision
  of this Indenture (including the reasonable compensation and the expenses
  and disbursements of its agents and counsel), except any such expense,
  disbursement or advance as may be attributable to its negligence or bad
  faith; and
 
    (c) to indemnify the Trustee for, and to hold it harmless against, any
  loss, liability or expense incurred without negligence or bad faith on its
  part, arising out of or in connection with the acceptance or administration
  of the trust or trusts hereunder or the performance of its duties
  hereunder, including the costs and expenses of defending itself against any
  claim or liability in connection with the exercise or performance of any of
  its powers or duties hereunder.
 
  As security for the performance of the obligations of the Company and the
Guarantor under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (or premium,
if any) or interest on particular Securities. Payment of any amount due
hereunder by either the Company or the Guarantor shall extinguish the
obligation of the other Person to make such payment.
 
Section 608. Disqualification; Conflicting Interests.
 
  (a) If the Trustee has or shall acquire any conflicting interest, as defined
in this Section, with respect to the Securities of any series, it shall, within
90 days after ascertaining that it has such conflicting interest, if the Event
of Default to which such conflicting interest relates has not been cured or
duly waived or otherwise eliminated before the end of the 90-day period, either
eliminate such conflicting interest or, except as set forth below, resign with
respect to the Securities of that series in the manner and with the effect
hereinafter specified in this Article.
 
  (b) In the event that the Trustee shall fail to comply with the provisions of
Subsection (a) of this Section with respect to the Securities of any series,
the Trustee shall, within 10 days after the expiration of such 90-day period,
transmit, in the manner and to the extent provided in Section 703(c), to all
Holders of Securities of that series notice of such failure.
 
                                       34
<PAGE>
 
  (c) For the purposes of this Section, the Trustee shall be deemed to have a
conflicting interest with respect to the Securities of any series if an Event
of Default as to such Securities shall have occurred and be continuing
(exclusive of any grace period or requirement of notice) and if
 
    (i) the Trustee is trustee under another indenture under which any other
  securities, or certificates of interest or participation in any other
  securities, of the Company or the Guarantor are outstanding, unless such
  other indenture is a collateral trust indenture under which the only
  collateral consists of Securities issued under this Indenture, or the
  Trustee is trustee for more than one outstanding series of securities under
  a single indenture of the Company, provided that there shall be excluded
  from the operation of this paragraph this Indenture with respect to the
  Securities of any series other than that series, and any indenture or
  indentures under which other securities, or certificates of interest or
  participation in other securities, of the Company or the Guarantor are
  outstanding, if
 
      (A) this Indenture and any such other indenture or indentures (and
    all series of securities issuable thereunder) are wholly unsecured and
    such other indenture or indentures are hereafter 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 Securities of that series and one or
    more other series or the provisions of such other indenture or
    indentures (or such series) 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 the Trustee from acting
    as such under this Indenture with respect to the Securities of that
    series and such other series or under such other indenture or
    indentures, or
 
      (B) 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 that 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 the Trustee from acting as such under this Indenture with
    respect to the Securities of that series and such other series or under
    such indenture or indentures;
 
    (ii) the Trustee or any of its directors or executive officers is an
  underwriter for the Company or the Guarantor;
 
    (iii) the Trustee directly or indirectly controls or is directly or
  indirectly controlled by or is under direct or indirect common control with
  an underwriter for the Company or the Guarantor;
 
    (iv) the Trustee or any of its directors or executive officers is a
  director, officer, partner, employee, appointee or representative of the
  Company or the Guarantor, or of an underwriter (other than the Trustee
  itself) for the Company or the Guarantor who is currently engaged in the
  business of underwriting, except that (A) one individual may be a director
  or an executive officer, or both, of the Trustee and a director or an
  executive officer, or both, of the Company or the Guarantor but may not be
  at the same time an executive officer of both the Trustee and the Company
  or the Guarantor; (B) 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 or the Guarantor; and (C) the Trustee may be designated by the
  Company or the Guarantor or by any underwriter for the Company or the
  Guarantor to act in the capacity of transfer agent, registrar, custodian,
  paying agent, fiscal agent, escrow agent or depository, or in any other
  similar capacity, or, subject to the provisions of paragraph (i) of this
  Subsection, to act as trustee, whether under an indenture or otherwise;
 
    (v) 10% or more of the voting securities of the Trustee is beneficially
  owned by the Company or the Guarantor or by any director, partner or
  executive officer thereof, 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
 
                                       35
<PAGE>
 
  voting securities of the Trustee is beneficially owned either by an
  underwriter for the Company or the Guarantor or by any director, partner or
  executive officer thereof, or is beneficially owned, collectively, by any
  two or more such persons;
 
    (vi) the Trustee is the beneficial owner of, or holds as collateral
  security for an obligation which is in default (as hereinafter in this
  Subsection defined), (A) 5% or more of the voting securities, or 10% or
  more of any other class of security, of the Company or the Guarantor not
  including the Securities issued under this Indenture and securities issued
  under any other indenture under which the Trustee is also trustee, or (B)
  10% or more of any class of security of an underwriter for the Company or
  the Guarantor;
 
    (vii) the Trustee is the beneficial owner of, or holds as collateral
  security for an obligation which is in default (as hereinafter in this
  Subsection defined), 5% or more of the voting securities of any person who,
  to the knowledge of the 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 or the Guarantor;
 
    (viii) the Trustee is the beneficial owner of, or holds as collateral
  security for an obligation which is in default (as hereinafter in this
  Subsection defined), 10% or more of any class of security of any person
  who, to the knowledge of the Trustee, owns 50% or more of the voting
  securities of the Company or the Guarantor;
 
    (ix) the Trustee owns, on the date on which such Event of Default as to
  such Securities (exclusive of any period of grace or requirement of notice)
  shall have occurred or any anniversary of such date while such Event of
  Default remains outstanding, 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 paragraph (vi), (vii) or (viii) of this
  Subsection. As to any such securities of which the 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 date of any such Event of Default and annually
  in each succeeding year in which such Event of Default is continuing, the
  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 or the
  Guarantor fails to make payment in full of the principal of or any premium
  or interest on any of the Securities when and as the same becomes due and
  payable, and such failure continues for 30 days thereafter, the 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 the 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
  the Trustee for the purposes of paragraphs (vi), (vii) and (viii) of this
  Subsection; or
 
    (x) except under the circumstances described in paragraphs (i), (iii),
  (iv), (v) or (vi) of Section 613(b), the Trustee shall be or shall become a
  creditor of the Company.
 
  For the purposes of paragraph (i) of this Subsection and of Sections 502, 512
and 513, the term "series of securities" or "series" means a series, class or
group of securities issuable under an indenture pursuant to whose terms holders
of one such series may vote to direct the Trustee, or otherwise take action
pursuant to a vote of such holders, separately from holders of another such
series; provided, that "series of securities" or "series" shall not include any
series of securities issuable under an indenture if all such series rank
equally and are wholly unsecured.
 
  The specification of percentages in paragraphs (v) to (ix), inclusive, of
this Subsection 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 paragraph (iii) or
(vii) of this Subsection.
 
                                       36
<PAGE>
 
  For the purposes of paragraphs (vi), (vii), (viii) and (ix) of this
Subsection only, (A) 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; (B) 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 (C) the Trustee shall not be
deemed to be the owner or holder of (1) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (B) above, or (2) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (3) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representative
capacity.
 
  Except in the case of a default in the payment of the principal of or any
premium or interest on any Security, or in the payment of any sinking or
purchase fund installment, the Trustee shall not be required to resign as
provided by this Section if the Trustee shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that (i) the default under the Indenture may be cured or waived during
a reasonable period and under the procedures described in such application, and
(ii) a stay of the Trustee's duty to resign will not be inconsistent with the
interests of the Holders of the Securities. The filing of such an application
shall automatically stay the performance of the duty to resign until the
Commission orders otherwise. Any resignation of the Trustee shall become
effective only upon the appointment of a successor trustee and such successor's
acceptance of such an appointment.
 
  (d) For the purposes of this Section:
 
    (i) The term "underwriter", when used with reference to the Company or
  the Guarantor, means every person who, within one year prior to the time as
  of which the determination is made, has purchased from the Company or the
  Guarantor with a view to, or has offered or sold for the Company or the
  Guarantor in connection with, the distribution of any security of the
  Company or the Guarantor 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, an association, a joint-stock company, a trust, an
  unincorporated organization or a government or political subdivision
  thereof. As used in this paragraph, 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 "Guarantor" means any obligor upon the Guarantees.
 
    (vii) 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.
 
                                       37
<PAGE>
 
  (e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
 
    (i) A specified percentage of the voting securities of the Trustee, the
  Company, the Guarantor or any other person referred to in this Section
  (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.
 
    (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:
 
      (A) securities of an issuer held in a sinking fund relating to
    securities of the issuer of the same class;
 
      (B) 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;
 
      (C) 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
 
      (D) securities held in escrow if placed in escrow by the issuer
    thereof;
 
  provided, however, that 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; provided, however, that, 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 and provided, further, that, 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.
 
  (f) If Section 310(b) of the Trust Indenture Act is amended at any time after
the date of this Indenture to change the circumstances under which a Trustee
shall be determined to have a conflicting interest with respect to the
Securities of any series or to change any of the definitions in connection
therewith, this Section 608 shall be automatically amended to incorporate such
changes.
 
Section 609. Corporate Trustee Required; Eligibility.
 
  There shall at all times be a Trustee hereunder which shall be a corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and, if there be such a corporation qualified and willing to act upon
customary and reasonable terms, having its Corporate Trust Office in Chicago,
Illinois or The City of New York or, pursuant to such rules and regulations as
the Commission may prescribe, or by order of the Commission on application, a
corporation or other person organized and doing business under the laws of a
foreign government, if such corporation or other Person is (i) authorized under
such laws to exercise corporate trust powers and (ii) subject to supervision or
 
                                       38
<PAGE>
 
examination by authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination applicable to
United States institutional trustees. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, 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. Neither the Company nor any person directly or
indirectly controlling, controlled by or under common control with the Company
shall serve as Trustee hereunder. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
 
Section 610. Resignation and Removal; Appointment of Successor.
 
  (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
 
  (b) The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company and the
Guarantor. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
 
  (c) The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee, the Company and
the Guarantor.
 
  (d) If at any time:
 
    (i) the Trustee shall fail to comply with Section 608(a) after written
  request therefor by the Company, the Guarantor or any Holder of a Security
  who has been a bona fide Holder of a Security for at least six months, or
 
    (ii) the Trustee shall cease to be eligible under Section 609 and shall
  fail to resign after written request therefor by the Company, the Guarantor
  or any such Holder, or
 
    (iii) the Trustee shall become incapable of acting or shall be adjudged a
  bankrupt or insolvent or a receiver of the Trustee or of its property shall
  be appointed or any public officer shall take charge or control of the
  Trustee or of its property or affairs for the purpose of rehabilitation,
  conservation or liquidation,
 
then, in any such case, (A) the Company or the Guarantor by a Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section
514 and unless the Trustee's duty to resign has been stayed in accordance with
Section 608(c), any Holder of a Security who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
 
  (e) If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company and the Guarantor, by
Resolutions, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one
or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within sixty (60)
days after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company, the Guarantor
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
 
                                       39
<PAGE>
 
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 611, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company and the Guarantor. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company and the Guarantor or the Holders of Securities and accepted appointment
in the manner required by Section 611, the Trustee or any Holder of a Security
who has been a bona fide Holder of a Security of such series for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
 
  (f) The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series in the manner
provided in Section 106. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
 
Section 611. Acceptance of Appointment by Successor.
 
  (a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company, the Guarantor and the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company, the Guarantor or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 607.
 
  (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
Guarantor, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each 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, (ii) 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 (iii) 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 as 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; and 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; but, on request of
the Company, the Guarantor or 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, subject nevertheless to its lien, if any, provided for in
Section 607.
 
  (c) Upon request of any such successor Trustee, the Company and the Guarantor
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
 
                                       40
<PAGE>
 
  (d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
 
Section 612. Merger, Conversion, Consolidation or Succession to Business.
 
  Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee thereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
 
Section 613. Preferential Collection of Claims Against Company and Guarantor.
 
  (a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company or the Guarantor within three months prior to a default, as defined in
Subsection (c) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in
a special account for the benefit of the Trustee individually, the Holders of
the Securities and coupons and the holders of other indenture securities, as
defined in Subsection (c) of this Section:
 
    (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 the Guarantor and other creditors of the Company
  and the Guarantor, except any such reduction resulting from the receipt or
  disposition of any property described in paragraph (ii) of this Subsection,
  or from the exercise of any right of set-off which the Trustee could have
  exercised if a petition in bankruptcy had been filed by or against the
  Company or the Guarantor upon the date of such default; and
 
    (ii) all property received by the 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 the Guarantor
  and other creditors of the Company and the Guarantor in such property or
  such proceeds.
 
    Nothing herein contained, however, shall affect the right of the Trustee:
 
      (A) to retain for its own account (1) payments made on account of any
    such claim by any Person (other than the Company or the Guarantor) who
    is liable thereon, and (2) the proceeds of the bona fide sale of any
    such claim by the Trustee to a third Person, and (3) distributions made
    in cash, securities or other property in respect of claims filed
    against the Company or the Guarantor in bankruptcy or receivership or
    in proceedings for reorganization pursuant to the Federal Bankruptcy
    Act or applicable State law;
 
      (B) 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;
 
      (C) 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 the Trustee
    shall sustain the burden of proving that at the time such property was
    so received the Trustee had no reasonable cause to believe that a
    default, as defined in Subsection (c) of this Section, would occur
    within three months; or
 
      (D) to receive payment on any claim referred to in paragraph (B) or
    (C), against the release of any property held as security for such
    claim as provided in paragraph (B) or (C), as the case may be, to the
    extent of the fair value of such property.
 
                                       41
<PAGE>
 
  For the purposes of paragraphs (B), (C) and (D), 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 paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
 
  If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders of Securities and the holders of other indenture
securities in such manner that the Trustee, the Holders of Securities 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 or the Guarantor in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State law,
the same percentage of their respective claims, figured before crediting to the
claim of the Trustee anything on account of the receipt by it from the Company
or the Guarantor of the funds and property in such special account and before
crediting to the respective claims of the Trustee and the Holders of Securities
and the holders of other indenture securities dividends on claims filed against
the Company or the Guarantor in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or applicable 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" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable 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 proceedings for reorganization is pending
shall have jurisdiction (x) to apportion among the Trustee, the Holders of
Securities 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 the Trustee and the
Holders of Securities 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 after the beginning of such
three months' period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period,
it shall be subject to the provisions of this Subsection 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, 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.
 
  In any case commenced under the Bankruptcy Act of July 1, 1898 or any
amendment thereto enacted prior to November 6, 1978, all references in this
Subsection to periods of three months shall be deemed to be references to
periods of four months.
 
  (b) There shall be excluded from the operation of Subsection (a) of this
Section 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 the Trustee;
 
                                       42
<PAGE>
 
    (ii) advances authorized by a receivership or bankruptcy court of
  competent jurisdiction or by this Indenture, for the purpose of preserving
  any property which shall at any time be subject to the lien of this
  Indenture or of discharging tax liens or other prior liens or encumbrances
  thereon, if notice of such advances and of the circumstances surrounding
  the making thereof is given to the Holders of Securities at the time and in
  the manner provided in this Indenture;
 
    (iii) 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;
 
    (iv) 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;
 
    (v) 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 or
  the Guarantor; and
 
    (vi) the acquisition, ownership, acceptance or negotiation of any drafts,
  bills of exchange, acceptances or obligations which fall within the
  classification of self-liquidating paper, as defined in Subsection (c) of
  this Section.
 
  (c) For the purposes of this Section only:
 
    (i) the term "default" means any failure to make payment in full of the
  principal of or interest on any of the Securities 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 or the Guarantor is an obligor outstanding under any other
  indenture (A) under which the Trustee is also trustee, (B) which contains
  provisions substantially similar to the provisions of this Section, and (C)
  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 or the Guarantor 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 the Trustee simultaneously with the creation of the creditor
  relationship with the Company or the Guarantor arising from the making,
  drawing, negotiating or incurring of the draft, bill of exchange,
  acceptance or obligation;
 
    (v) the term "Company" means any obligor upon the Securities;
 
    (vi) the term "Guarantor" means any obligor upon the Guarantees; and
 
    (vii) the term "Federal Bankruptcy Act" means the Bankruptcy Act or Title
  11 of the United States Code.
 
Section 614. Appointment of Authenticating Agent.
 
  The Trustee may appoint an Authenticating Agent or Agents with respect to one
or more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original issue or
upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be
 
                                       43
<PAGE>
 
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.
Each Authenticating Agent shall be acceptable to the Company and the Guarantor
and shall at all times be a corporation organized and doing business under the
laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, 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, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
 
  Any corporation into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency or corporate
trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent.
 
  An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company and the Guarantor. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company and the
Guarantor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and the Guarantor and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Registered Securities, if
any, of the series with respect to which such Authenticating Agent will serve,
as their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
 
  The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
 
  If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
 
  This is one of the Securities of the series designated herein and referred to
in the within-mentioned Indenture.
 
                                          -------------------------------------
                                                       As Trustee
 
                                          By _________________________________
                                                  As Authenticating Agent
 
                                          By _________________________________
                                                    Authorized Officer
 
 
                                       44
<PAGE>
 
                                 ARTICLE SEVEN
 
          Holders' Lists and Reports by Trustee, Company and Guarantor
 
Section 701. Company and Guarantor to Furnish Trustee Names and Addresses of
Holders.
 
  The Company and the Guarantor will furnish or cause to be furnished to the
Trustee with respect to the Securities of each Series:
 
    (a) semi-annually, not later than February 15 and August 15 in each year,
  a list, in such form as the Trustee may reasonably require, containing all
  the information in the possession or control of the Company, or any of its
  Paying Agents other than the Trustee, as to the names and addresses of the
  Holders of Securities as of the preceding February 1 or August 1, as the
  case may be, and
 
    (b) at such other times as the Trustee may request in writing, within 30
  days after the receipt by the Company and the Guarantor of any such
  request, a list of similar form and content as of a date not more than 15
  days prior to the time such list is furnished;
 
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
 
Section 702. Preservation of Information; Communications to Holders.
 
  (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities of each Series
(i) contained in the most recent lists furnished to the Trustee as provided in
Section 701, (ii) received by the Trustee in its capacity as Security Registrar
and (iii) filed with it within the two preceding years pursuant to Section
703(c)(iii). The Trustee may (i) destroy any list furnished to it as provided
in Section 701 upon receipt of a new list so furnished, (ii) destroy any
information received by it as Paying Agent (if so acting) hereunder upon
delivering to itself as Trustee, not earlier than July 1 or January 1, a list
containing the names and addresses of the Holders of Securities obtained from
such information since the delivery of the next previous list, if any, (iii)
destroy any list delivered to itself as Trustee which was compiled from
information received by it as Paying Agent (if so acting) hereunder upon the
receipt of a new list so delivered, and (iv) destroy not earlier than two years
after filing any information filed with it pursuant to Section 703(c)(iii).
 
  (b) If three or more Holders of Securities (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security 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 Securities with respect to their rights under this Indenture or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the 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 the Trustee in accordance with Section 702(a), or
 
    (ii) inform such applicants as to the approximate number of Holders of
  Securities whose names and addresses appear in the information preserved at
  the time by the Trustee in accordance with Section 702(a), 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 the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities whose name and address appear in the
information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the 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 the
Trustee shall mail to such applicants and
 
                                       45
<PAGE>
 
file with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interest of the Holders of Securities 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, the Trustee shall mail
copies of such material to all such Holders of Securities with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
 
  (c) Every Holder of Securities or coupons, by receiving and holding the same,
agrees with the Company, the Guarantor and the Trustee that neither the
Company, the Guarantor nor the Trustee nor any agent of any of them shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with Section
702(b), 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 Section 702(b).
 
Section 703. Reports by Trustee.
 
  (a) Within 60 days after August 15 of each year commencing with the year
[1995], the Trustee shall transmit by mail to the Holders of Securities, as
provided in Subsection (c) of this Section, a brief report dated as of such
August 15 with respect to any of the following events which may have occurred
within the previous 12 months (but if no such event has occurred within such
period no report need be transmitted):
 
    (i) any change to its eligibility under Section 609 and its
  qualifications under Section 608;
 
    (ii) the creation of any material change to a relationship specified in
  paragraphs (i) through (x) of Section 608(c);
 
    (iii) the character and amount of any advances (and if the Trustee elects
  so to state, the circumstances surrounding the making thereof) made by the
  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, on any property or funds held or collected by it
  as Trustee, except that the 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 Outstanding
  on the date of such report;
 
    (iv) the amount, interest rate and maturity date of all other
  indebtedness owing by the Company or the Guarantor (or by any other obligor
  on the Securities) to the 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 Section 613(b)(ii), (iii),
  (iv) or (vi);
 
    (v) any change to the property and funds, if any, physically in the
  possession of the Trustee as such on the date of such report;
 
    (vi) any additional issue of Securities which the Trustee has not
  previously reported; and
 
    (vii) any action taken by the Trustee in the performance of its duties
  hereunder which it has not previously reported and which in its opinion
  materially affects the Securities, except action in respect of a default,
  notice of which has been or is to be withheld by the Trustee in accordance
  with Section 602.
 
  (b) The Trustee shall transmit to the Holders of Securities, as provided in
Subsection (c) of this Section, a brief report with respect to the character
and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of
this Section (or if no such report has yet been so transmitted,
 
                                       46
<PAGE>
 
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, on
property or funds held or collected by it as Trustee and which it has not
previously reported pursuant to this Subsection, except that the 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 Outstanding at such time, such report to be transmitted within
90 days after such time.
 
  (c) Reports pursuant to this Section shall be transmitted by mail:
 
    (i) to all Holders of Registered Securities, as the names and addresses
  of such Holders appear in the Security Register;
 
    (ii) to such Holders of Bearer Securities as have, within the two years
  preceding such transmission, filed their names and addresses with the
  Trustee for that purpose; and
 
    (iii) except in the case of reports pursuant to Subsection (b) of this
  Section, to each Holder of a Security whose name and address is preserved
  at the time by the Trustee, as provided in Section 702(a).
 
  (d) A copy of each such report shall, at the time of such transmission to
Holders of Securities, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company and
the Guarantor. The Company and the Guarantor will notify the Trustee when any
Securities are listed on any stock exchange.
 
Section 704. Reports by Company and Guarantor.
 
    The Company and the Guarantor shall:
 
    (a) file with the Trustee, within 15 days after the Company or the
  Guarantor 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 or the
  Guarantor may be required to file with the Commission pursuant to Section
  13 or Section 15(d) of the Securities Exchange Act of 1934, as amended; or,
  if the Company or the Guarantor is not required to file information,
  documents or reports pursuant to either of said Sections, then it shall
  file with the Trustee and 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, as
  amended, 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 the Trustee and 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 and the Guarantor with the conditions and covenants of this
  Indenture as may be required from time to time by such rules and
  regulations;
 
    (c) transmit, within 30 days after the filing thereof with the Trustee,
  to the Holders of Securities, in the manner and to the extent provided in
  Section 703(c) with respect to reports pursuant to Section 703(a), such
  summaries of any information, documents and reports required to be filed by
  the Company and the Guarantor pursuant to paragraphs (a) and (b) of this
  Section as may be required by rules and regulations prescribed from time to
  time by the Commission; and
 
    (d) furnish to the Trustee, not less often than annually, a brief
  certificate from the principal executive officer, principal financial
  officer or principal accounting officer of the Company as to his or her
  knowledge of the Company's compliance with all conditions and covenants
  under the Indenture, such compliance to be determined without regard to any
  period of grace or requirement of notice provided under the Indenture.
 
                                       47
<PAGE>
 
                                 ARTICLE EIGHT
 
              Consolidation, Merger, Conveyance, Transfer or Lease
 
Section 801. Company and Guarantor May Consolidate, Etc., Only on Certain
Terms.
 
  Neither the Company nor the Guarantor shall consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and neither the Company nor the
Guarantor shall permit any Person to consolidate with or merge into it or
convey, transfer or lease its properties and assets substantially as an
entirety to it, unless:
 
    (a) in case the Company or the Guarantor shall consolidate with or merge
  into another Person or convey, transfer or lease its properties and assets
  substantially as an entirety to any Person, the Person formed by such
  consolidation or into which the Company or the Guarantor is merged or the
  Person which acquires by conveyance or transfer, or which leases, the
  properties and assets of the Company or the Guarantor substantially as an
  entirety shall be a corporation, partnership or trust, shall be organized
  and validly existing under the laws of the United States of America, any
  State thereof or the District of Columbia and shall expressly assume, by an
  indenture supplemental hereto, executed and delivered to the Trustee, in
  form satisfactory to the Trustee, the due and punctual payment of the
  principal of (and premium, if any) and interest (including all additional
  amounts, if any, payable pursuant to Section 1004) on all the Securities
  and the performance of every covenant of this Indenture on the part of the
  Company or the Guarantor to be performed or observed;
 
    (b) immediately after giving effect to such transaction no Event of
  Default, and no event which, after notice or lapse of time or both, would
  become an Event of Default, shall have happened and be continuing; and
 
    (c) if, as a result of any such consolidation or merger or such
  conveyance, transfer or lease, properties or assets of the Company would
  become subject to a Mortgage which would not be permitted by Section 1006
  without equally and ratably securing the Securities as provided therein,
  the Company or such successor corporation or Person, as the case may be,
  shall take such steps as shall be necessary effectively to secure the
  Securities equally and ratably with (or prior to) all indebtedness secured
  thereby pursuant to Section 1006.
 
Section 802. Successor Substituted.
 
  Upon any consolidation of the Company or the Guarantor with, or merger of the
Company or the Guarantor into, any other Person or any conveyance, transfer or
lease of the properties and assets of the Company or the Guarantor
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company or the Guarantor
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 or the Guarantor under this Indenture with the same effect as if such
successor Person had been named as the Company or the Guarantor herein, and
thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities and coupons and Guarantees, as applicable.
 
                                  ARTICLE NINE
 
                            Supplemental Indentures
 
Section 901. Supplemental Indentures Without Consent of Holders.
 
  Without the consent of any Holders of Securities or coupons, the Company and
the Guarantor, when authorized by a Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
 
    (a) to evidence the succession of another Person to the Company or the
  Guarantor and the assumption by any such successor of the covenants of the
  Company or the Guarantor herein and in the Securities; or
 
                                       48
<PAGE>
 
    (b) to add to the covenants of the Company or the Guarantor for the
  benefit of the Holders of all or any series of Securities (and if such
  covenants are to be for the benefit of less than all series of Securities,
  stating that such covenants are expressly being included solely for the
  benefit of such series) or to surrender any right or power herein conferred
  upon the Company or the Guarantor; or
 
    (c) to add any additional Events of Default; or
 
    (d) to add to or change any of the provisions of this Indenture to
  provide that Bearer Securities may be registrable as to principal, to
  change or eliminate any restrictions on the payment of principal of or any
  premium or interest on Bearer Securities, to permit Bearer Securities to be
  issued in exchange for Registered Securities, to permit Bearer Securities
  to be issued in exchange for Bearer Securities of other authorized
  denominations or to permit the issuance of Securities in uncertificated
  form, provided that any such action shall not adversely affect the
  interests of the Holders of Securities of any series or any related coupons
  in any material respect; or
 
    (e) to 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; or
 
    (f) to secure the Securities; or
 
    (g) to establish the form or terms of Securities of any series and any
  related coupons as permitted by Sections 201 and 301; 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
  and 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
  611(b); or
 
    (i) 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 or any Security or Guarantee issued hereunder,
  provided that any such indenture supplemental hereto shall not adversely
  affect the interests of the Holders of Securities of any series or any
  related coupons in any material respect.
 
Section 902. Supplemental Indentures with Consent of Holders.
 
  With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantor and the Trustee, the Company and the Guarantor, when authorized by a
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
and any related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, except as otherwise specified as contemplated by
Section 301, without the consent of the Holder of each Outstanding Security
affected thereby,
 
    (a) change the Stated Maturity Date of the principal of, or any
  installment of principal of or interest on, any Security, or reduce the
  principal amount thereof or the rate of interest thereon or any premium
  payable upon the redemption thereof, or change any obligation of the
  Company or the Guarantor to pay additional amounts pursuant to Section 1004
  (except as contemplated by Section 801(a) and permitted by Section 901(a)),
  or reduce the amount of the principal of an Original Issue Discount
  Security that would be due and payable upon a declaration of acceleration
  of the Maturity thereof pursuant to Section 502 or change the coin or
  currency in which any Security or any premium or any interest thereon is
  payable, or impair the right to institute suit for the enforcement of any
  such payment on or after the Stated Maturity Date thereof (or, in the case
  of redemption, or on or after the Redemption Date), or
 
 
                                       49
<PAGE>
 
    (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 reduce the requirements of Section 1304 for quorum or voting,
  or
 
    (c) change any obligation of the Company to maintain an office or agency
  in the places and for the purposes specified in Section 1002, or
 
    (d) except as provided in Section 901(i), modify any of the provisions of
  the Guarantee, or
 
    (e) modify any of the provisions of this Section, Section 513 or Section
  1007, 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;
  provided, however, that this clause shall not be deemed to require the
  consent of any Holder of a Security or coupon with respect to changes in
  the references to "the Trustee" and concomitant changes in this Section and
  Section 1007, or the deletion of this proviso, in accordance with the
  requirements of Sections 611(b) and 901(h). A supplemental indenture which
  changes or eliminates any covenant or other provision of this Indenture
  which has expressly been included solely for the benefit of one or more
  particular series of Securities, or which modifies the rights of the
  Holders of Securities of 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 Securities of any other series.
 
  It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
 
Section 903. Execution of Supplemental Indentures.
 
  In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
 
Section 904. Effect of Supplemental Indentures.
 
  Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every
Holder of Securities theretofore and thereafter authenticated and delivered
hereunder and of any coupons appertaining thereto shall be bound thereby.
 
Section 905. Conformity with Trust Indenture Act.
 
  Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
 
Section 906. Reference in Securities to Supplemental Indentures.
 
  Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee, the Company and the Guarantor, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered (with duly executed Guarantees endorsed thereon) by the Trustee in
exchange for Outstanding Securities of such series.
 
                                       50
<PAGE>
 
                                  ARTICLE TEN
 
                                   Covenants
 
Section 1001. Payment of Principal, Premium and Interest.
 
  The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of and any premium and
interest on the Securities of that series in accordance with the terms of the
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series
of Securities, any interest due on Bearer Securities on or before Maturity
shall be payable only upon presentation and surrender of the several coupons
for such interest installments as are evidenced thereby as they severally
mature.
 
Section 1002. Maintenance of Office or Agency.
 
  If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each Place of Payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company or
the Guarantor in respect of the Securities of that series and this Indenture
may be served. Except as otherwise specified as contemplated by Section 301, if
Securities of a series are issuable as Bearer Securities, the Company will
maintain (a) in the Borough of Manhattan, The City of New York, or Chicago,
Illinois, an office or agency where any Registered Securities of that series
may be presented or surrendered for payment, where any Registered Securities of
that series may be surrendered for registration of transfer, where Securities
of that series may be surrendered for exchange, where notices and demands to or
upon the Company or the Guarantor in respect of the Securities of that series
and this Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not otherwise), (b)
subject to any laws or regulations applicable thereto, in a Place of Payment
for that series which is located outside the United States, an office or agency
where Securities of that series and related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Securities of that series pursuant to Section 1004); provided, however, that if
the Securities of that series are listed on The International Stock Exchange,
London, the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the Company
will maintain a Paying Agent for the Securities of that series in London,
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Securities of that series are listed on such
exchange, and (c) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States an office or
agency where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered
for exchange and where notices and demands to or upon the Company or the
Guarantor in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee and the
Holders of the location, and any change in the location, of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency in respect of any series of Securities or shall fail to
furnish the Trustee with the address thereof, such presentations and surrenders
of Securities of that series may be made and notices and demands may be made or
served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Bearer Securities of that series pursuant to Section 1004) at an office
maintained by the Trustee in London, and the Company hereby appoints the same
as its agent to receive such respective presentations, surrenders, notices and
demands.
 
  Except as otherwise specified as contemplated by Section 301, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank
located in the United States, provided, however, that, if the Securities of a
series are denominated and payable in
 
                                       51
<PAGE>
 
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on Securities of such series
pursuant to Section 1004) shall be made at the office of the Company's Paying
Agent in the city of Chicago, Illinois, if (but only if) payment in Dollars of
the full amount of such principal, premium, interest or additional amounts, as
the case may be, at all offices or agencies outside the United States
maintained for that purpose by the Company in accordance with this Indenture is
illegal or effectively precluded by exchange controls or other similar
restrictions.
 
  The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee and the Holders of any such designation or rescission and of any
change in the location of any such other office or agency.
 
  Except as otherwise specified as contemplated by Section 301, the Company
hereby appoints the Trustee as the initial Paying Agent and designates the
Corporate Trust Office of the Trustee as its office for the purposes of and
pursuant to this Section 1002.
 
Section 1003. Money for Securities Payments to Be Held in Trust.
 
  If the Company shall at any time act 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 any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium or interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure
so to act.
 
  Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of and any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay the principal and any premium or interest 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)
the Company will promptly notify the Trustee of its action or failure so to
act.
 
  The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
 
    (a) hold all sums held by it for the payment of the principal of and any
  premium or interest on Securities of that series in trust for the benefit
  of the Persons entitled thereto until such sums shall be paid to such
  Persons or otherwise disposed of as herein provided;
 
    (b) give the Trustee notice of any default by the Company (or any other
  obligor upon the Securities of that series) in the making of any payment of
  principal of and any premium or interest on the Securities of that series;
  and
 
    (c) at any time during the continuance of any such default, upon the
  written request of the Trustee, forthwith pay to the Trustee all sums so
  held in trust by such Paying Agent.
 
  The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
 
                                       52
<PAGE>
 
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
 
  Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of and any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
or any coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be transmitted
in the manner and to the extent provided by Section 106, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification, any unclaimed balance of
such money then remaining will be repaid to the Company.
 
Section 1004. Additional Amounts.
 
  If the Securities of a series provide for the payment of additional amounts,
the Company will pay to the Holder of any Security of such series or any coupon
appertaining thereto additional amounts as provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of
or any premium or interest on, or in respect of, any Security of any series or
payment of any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of additional amounts provided for in this Section to
the extent that, in such context, additional amounts are, were or would be
payable in respect thereof pursuant to the provisions of this Section and
express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.
 
  If the Securities of a series provide for the payment of additional amounts,
at least 10 days prior to the first Interest Payment Date with respect to that
series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be
withheld on such payments to such Holders of Securities or coupons and the
Company will pay to the Trustee or such Paying Agent the additional amounts
required by this Section. The Company covenants to indemnify the Trustee and
any Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section.
 
Section 1005. Purchase of Securities by Company or Subsidiary.
 
  If and so long as the Securities of a series are listed on The International
Stock Exchange, London and such stock exchange shall so require, the Company
will not, and will not permit any of its Subsidiaries to, purchase any
Securities of that series by private treaty at a price (exclusive of expenses
and accrued interest) which exceeds 120% of the mean of the nominal quotations
of the Securities of that series as shown in The Stock Exchange Daily Official
List for the last trading day preceding the date of purchase.
 
                                       53
<PAGE>
 
Section 1006. Lien on Assets.
 
  If at any time the Company mortgages, pledges or otherwise subjects to any
lien the whole or any part of any property or assets now owned or hereafter
acquired by it, except as hereinafter provided in this Section 1006, the
Company will secure the outstanding Securities, and any other obligations of
the Company which may then be outstanding and entitled to the benefit of a
covenant similar in effect to this covenant, equally and ratably with the
indebtedness or obligations secured by such mortgage, pledge, or lien, for as
long as any such indebtedness or obligation is so secured. The foregoing
covenant does not apply to the creation, extension, renewal or refunding of
landlords' liens, liens with respect to the sale or financing of accounts or
chattel paper, purchase-money mortgages or liens, liens arising under the
Internal Revenue Code of 1986, as amended, or liens with respect to taxes,
assessments or other governmental charges or levies which may be owed by the
Company from time to time and which, if delinquent, are being contested in good
faith, or other liens to which any property or asset acquired by the Company is
subject as of the date of its acquisition by the Company, or to the making of
any deposit or pledge to secure public or statutory obligations or with any
governmental agency at any time required by law in order to qualify the Company
to conduct its business or any part thereof or in order to entitle it to
maintain self-insurance or to obtain the benefits of any law relating to
workmen's compensation, unemployment insurance, old age pensions or other
social security, or with any court, board, commission, or governmental agency
as security incident to the proper conduct of any proceeding before it. Nothing
contained in this Indenture prevents any entity other than the Company from
mortgaging, pledging, or subjecting to any lien any property or assets, whether
or not acquired by such Person from the Company.
 
Section 1007. Waiver of Certain Covenants.
 
  The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1006, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
 
Section 1008. Defeasance of Certain Obligations.
 
  If this Section is specified, as contemplated by Section 301, to be
applicable to Securities of any series, the Company may omit to comply with any
term, provision or condition set forth in Sections 801, 1005 and 1006, and any
such omission with respect to Sections 801, 1005 and 1006, shall not be an
Event of Default, in each case with respect to the Securities of that series,
provided that the following conditions have been satisfied:
 
    (a) with reference to this Section, the Company has deposited or caused
  to be deposited with the Trustee (or another trustee satisfying the
  requirements of Section 609) irrevocably (but subject to the provisions of
  Section 402 and the last paragraph of Section 1003), as trust funds in
  trust, specifically pledged as security for, and dedicated solely to, the
  benefit of the Holders of the Securities of that series, (i) lawful money
  of the United States in an amount, or (ii) U.S. Government Obligations
  which through the payment of interest and principal in respect thereof in
  accordance with their terms will provide not later than the opening of
  business on the due dates of any payment referred to in clause (A) or (B)
  of this subparagraph (a) lawful money of the United States in an amount, or
  (iii) a combination thereof, sufficient, in the opinion of a nationally
  recognized firm of independent public accountants expressed in a written
  certification thereof delivered to the Trustee, to pay and discharge (A)
  the principal of (and premium, if any) and each installment of principal
  (and premium, if any) and interest on the Outstanding Securities of that
  series on the Stated Maturity Date of such principal or installment of
  principal or interest and (B) any mandatory sinking fund payments or
  analogous payments applicable to Securities of such series on the day on
  which such payments are due and payable in accordance with the terms of
  this Indenture and of such Securities;
 
 
                                       54
<PAGE>
 
    (b) such deposit shall not cause the Trustee with respect to the
  Securities of that series to have a conflicting interest as defined in
  Section 608 and for purposes of the Trust Indenture Act with respect to the
  Securities of any series;
 
    (c) such deposit will not result in a breach or violation of, or
  constitute a default under, this Indenture or any other agreement or
  instrument to which the Company or the Guarantor is a party or by which it
  is bound;
 
    (d) no Event of Default or event which with the giving of notice or lapse
  of time, or both, would become an Event of Default with respect to the
  Securities of that series shall have occurred and be continuing on the date
  of such deposit and no Event of Default under Section 501(e) or Section
  501(f) or event which with the giving of notice or lapse of time, or both,
  would become an Event of Default under Section 501(e) or Section 501(f)
  shall have occurred and be continuing on the 91st day after such date;
 
    (e) the Company has delivered to the Trustee an Opinion of Counsel or a
  ruling from or published by the United States Internal Revenue Service, to
  the effect that Holders of the Securities of such series will not recognize
  income, gain or loss for federal income tax purposes as a result of such
  deposit and defeasance of certain obligations and will be subject to
  federal income tax on the same amount and in the same manner and at the
  same times as would have been the case if such deposit and defeasance had
  not occurred;
 
    (f) if the Securities of that series are then listed on any foreign or
  domestic securities exchange, the Company has delivered to the Trustee an
  Opinion of Counsel to the effect that such deposit and defeasance will not
  cause such Securities to be delisted; and
 
    (g) 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 defeasance contemplated in this Section have
  been complied with and an Opinion of Counsel to the effect that either (i)
  as a result of such deposit and the related exercise of the Company's
  option under this Section, registration is not 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 said Act have been effected.
 
                                 ARTICLE ELEVEN
 
                            Redemption of Securities
 
Section 1101. Applicability of Article.
 
  Securities of any series which are redeemable before their Stated Maturity
Date shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
 
Section 1102. Election to Redeem; Notice to Trustee.
 
  The election of the Company to redeem any Securities shall be evidenced by a
Resolution of the Company. In the case of any redemption at the election of the
Company of less than all the Securities of any series, the Company shall, at
least 45 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. In the case of any redemption of Securities (a) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (b) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
 
 
                                       55
<PAGE>
 
Section 1103. Selection by Trustee of Securities to Be Redeemed.
 
  If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Registered Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If so
specified in the Securities of a series, partial redemptions must be in an
amount not less than $1,000,000 principal amount of Securities.
 
  The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities 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 1104. Notice of Redemption.
 
  Notice of redemption shall be given in the manner provided in Section 106 to
the Holders of Securities to be redeemed not less than 30 nor more than 60 days
prior to the Redemption Date.
 
    All notices of redemption shall state:
 
    (a) the Redemption Date,
 
    (b) the Redemption Price,
 
    (c) if less than all the Outstanding Securities of any series are to be
  redeemed, the identification (and, in the case of partial redemption, the
  principal amounts) of the particular Securities to be redeemed,
 
    (d) that on the Redemption Date the Redemption Price will become due and
  payable upon each such Security to be redeemed and, if applicable, that
  interest thereon will cease to accrue on and after said date,
 
    (e) the place or places where such Securities, together in the case of
  Bearer Securities with all coupons appertaining thereto, if any, maturing
  after the Redemption Date, are to be surrendered for payment of the
  Redemption Price, and
 
    (f) that the redemption is for a sinking fund, if such is the case. A
  notice of redemption published as contemplated by Section 106 need not
  identify particular Registered Securities to be redeemed.
 
  Notice of redemption of 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 1105. Deposit of Redemption Price.
 
  Prior to 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 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
 
Section 1106. Securities Payable on Redemption Date.
 
  Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after
 
                                       56
<PAGE>
 
such date (unless the Company shall default in the payment of the Redemption
Price and accrued interest) such Securities shall cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender of
any such Security for redemption in accordance with said notice, together with
all coupons, if any, appertaining thereto maturing after the Redemption Date,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity Date is on
or prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section
1002) and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided, further,
that, unless otherwise specified as contemplated by Section 301, installments
of interest on Registered Securities whose Stated Maturity Date is on or prior
to the Redemption Date shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such at the close of business
on the relevant Record Dates according to their terms and the provisions of
Sections 305 and 307.
 
  If any Bearer Security surrendered for redemption shall not be accompanied by
all appurtenant coupons maturing 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, the Guarantor 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 the Trustee or 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;
provided, however, that interest represented by coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
 
  If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
 
Section 1107. Securities Redeemed in Part.
 
  Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (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 his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver (with a duly executed
Guarantee endorsed thereon) to the Holder of such Security without service
charge, a new Registered Security or Securities of the same series and of like
tenor, 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 of the Security so surrendered. If a Security in permanent global
form is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver (with a duly executed Guarantee endorsed thereon) to
the U.S. Depositary or Common Depositary for such Security in permanent global
form, without service charge, a new Security in permanent global form in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Security in permanent global form so surrendered.
 
                                 ARTICLE TWELVE
 
                                 Sinking Funds
 
Section 1201. Applicability of Article.
 
  The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
 
                                       57
<PAGE>
 
  The minimum amount of any sinking fund payment provided for by the terms of
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 Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
 
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
 
  The Company (a) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(b) may apply as a credit Securities of a 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, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; 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 sinking
fund payment shall be reduced accordingly.
 
Section 1203. Redemption of Securities for Sinking Fund.
 
  Not less than 60 days prior to each sinking fund payment date for any series
of Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that 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 that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
 
                                ARTICLE THIRTEEN
 
                       Meetings of Holders of Securities
 
Section 1301. Purposes for Which Meetings May Be Called.
 
  If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
 
Section 1302. Call, Notice and Place of Meetings.
 
  (a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1301, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, Chicago,
Illinois or London as the Trustee shall determine. Notice of every meeting of
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, in the manner provided in Section 106, not less than
21 nor more than 180 days prior to the date fixed for the meeting.
 
                                       58
<PAGE>
 
  (b) In case at any time the Company or the Guarantor, pursuant to a
Resolution or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified
in Section 1301, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have made
the first publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, the Company, the Guarantor or the Holders of
Securities of such series in the amount above specified, as the case may be,
may determine the time and the place in the Borough of Manhattan, The City of
New York, Chicago, Illinois or London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in subsection
(a) of this Section.
 
Section 1303. Persons Entitled to Vote at Meetings.
 
  To be entitled to vote at any meeting of Holders of Securities of any series,
a Person shall be (a) a Holder of one or more Outstanding Securities of such
series, or (b) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company or the
Guarantor and its counsel.
 
Section 1304. Quorum; Action.
 
  The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides must be given by the Holders of a greater
percentage in principal amount of the Outstanding Securities of a series, the
Persons entitled to vote such percentage in principal amount of the Outstanding
Securities of such series shall constitute a quorum. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1302(a), except that
such notice need be given only once not less than five days prior to the date
on which the meeting is scheduled to be reconvened. Notice of the reconvening
of an adjourned meeting shall state expressly the percentage, as provided
above, of the principal amount of the Outstanding Securities of such series
which shall constitute a quorum.
 
  Except as limited by the proviso to Section 902, any resolution presented to
a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Securities of that series; provided,
however, that, except as limited by the proviso to Section 902, any resolution
with respect to any consent or waiver which this Indenture expressly provides
must be given by the Holders of a greater percentage in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly convened and at which a quorum is present as aforesaid only by the
affirmative vote of the Holders of such percentage in principal amount of the
Outstanding Securities of that series; and provided, further, that, except as
limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Securities of that series.
 
                                       59
<PAGE>
 
  Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.
 
Section 1305. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
 
  (a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a 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 deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
104 and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 104 or
other proof.
 
  (b) 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 the Guarantor or by Holders of Securities as provided in Section
1302(b), in which case the Company or the Guarantor or the Holders of
Securities of the series 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 vote of the Persons entitled to
vote a majority in principal amount of the Outstanding Securities of such
series represented at the meeting.
 
  (c) At any meeting each Holder of a Security of such series or proxy shall be
entitled to one vote for each $1,000 principal amount of Outstanding Securities
of such series held or represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of any 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, except as
a Holder of a Security of such series or proxy.
 
  (d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 1302 at which a quorum is present may be adjourned from time to time
by Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.
 
Section 1306. Counting Votes and Recording Action of Meetings.
 
  The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series 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, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said 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 said notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
 
                                       60
<PAGE>
 
  In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
 
(Seal)                                    Ameritech Capital Funding
                                           Corporation
 
Attest:  __________________________       By: _________________________________
                                          Title: ______________________________
 
(Seal)                                    Ameritech Corporation
 
Attest:  __________________________       By: _________________________________
                                          Title: ______________________________
 
(Seal)                                    Harris Trust and Savings Bank
 
Attest:  __________________________       By: _________________________________
                                          Title: ______________________________
State of Illinois  )
County of Cook     )  ss:
 
 
  On the      day of        , 1995, before me personally came                to
me known, who, being by me duly sworn, did depose and say that he is
of Ameritech Capital Funding Corporation, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the sole shareholder of said
corporation, and that he signed his name thereto by like authority.
 
(Seal)
                                          _____________________________________
                                                      Notary Public
 
State of Illinois  )
County of Cook     )  ss:
 
 
  On the      day of        , 1995, before me personally came
         to me known, who, being by me duly sworn, did depose and say that he
is                                                          of Ameritech
Corporation, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
 
(Seal)
                                          _____________________________________
                                                      Notary Public
 
                                       61
<PAGE>
 
 
State of Illinois  )
County of Cook     )  ss:
 
 
  On the      day of        , 1995, before me personally came
          to me known, who, being by me duly sworn, did depose and say that he
is                of Harris Trust and Savings Bank, an Illinois banking
corporation described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporation's seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
 
 
(Seal)
                                          _____________________________________
                                                      Notary Public
 
                                       62
<PAGE>
 
                                                                       EXHIBIT A
 
                   [FORM OF REGISTERED SECURITY WHICH IS NOT
                      AN ORIGINAL ISSUE DISCOUNT SECURITY]
 
                                 [FORM OF FACE]
 
                     AMERITECH CAPITAL FUNDING CORPORATION
 
No. [R-]                                                     [U.S.] $
 
  [If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository,
insert--Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.]
 
ISSUE PRICE:
 
                                          INTEREST PAYMENT DATES:
ORIGINAL ISSUE DATE:
 
 
                                          INITIAL REDEMPTION DATE:
STATED MATURITY:
 
 
                                          YIELD TO MATURITY:
BASE RATE:
 
 
                                          OPTION TO ELECT REPAYMENT:  YES  NO
INITIAL INTEREST RATE:
 
 
                                          OPTIONAL REPAYMENT DATES:
INDEX MATURITY:
 
 
                                          OPTIONAL REPAYMENT PRICES:
SPREAD (PLUS OR MINUS):
 
 
                                          OPTIONAL RESET DATES:
SPREAD MULTIPLIER:
 
 
                                          OPTIONAL EXTENSION:  YES  NO
MAXIMUM INTEREST RATE:
 
 
                                          FINAL MATURITY:
MINIMUM INTEREST RATE:
 
 
                                          DEPOSITORY:
INTEREST RESET PERIOD:
 
 
                                          REPAYMENT PROVISIONS (If
INTEREST RESET DATES:                     applicable):
 
 
                                          OTHER PROVISIONS:
 
  Ameritech Capital Funding Corporation, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to         , or registered
assigns, the principal sum of        [United States] Dollars on and to pay
interest thereon from        , 19  , or from the most recent Interest Payment
Date to which interest has been paid or duly provided for in arrears [If
applicable, insert--; provided, however, that if this Security has a weekly
Interest Rate Reset Period, as shown above, such interest will be paid from the
Original Issue Date shown above or from the day following the most recent
Regular Record Date to which interest has been paid or duly provided for in
arrears]. Interest will be paid [semi-annually in arrears on       and
in each year] [annually in arrears on        in each year] ([each] an "Interest
Payment Date") commencing       19  , at the rate of    % per annum [or
describe formula to calculate rate, e.g., commercial paper rate], until the
principal hereof is paid or made available for payment. [If applicable,
insert--, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of    % per annum on any overdue principal [and
premium] and on any overdue installment of
 
                                      A-1
<PAGE>
 
interest]. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be the      [or       ] (whether or not a Business Day)
[,as the case may be,] next preceding such Interest Payment Date; provided,
however, that interest payable at Maturity will be payable to the Person to
whom principal shall be payable. The first payment of interest on any Security
originally issued between a Regular Record Date and an Interest Payment Date
will be made on the Interest Payment Date following the next succeeding Regular
Record Date to the registered owner on such Regular Record Date. Except as
otherwise provided in the Indenture, any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture. Payment of the principal of [(and
premium, if any)] and interest on this Security will be made at [the office or
agency of the Company maintained for that purpose in         , in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts] [the option of the Holder (a)
at [the Corporate Trust Office of the Trustee] or such other office or agency
of the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York or Chicago, Illinois, in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts or (b) subject to any laws or
regulations applicable thereto and to the right of the Company (limited as
provided in the Indenture) to rescind the designation of any such Paying Agent,
at the [main] offices of            in          ,           in         ,
         in          and        in         , or at such other offices or
agencies as the Company may designate, by United States dollar check drawn on,
or transfer to a United States dollar account maintained by the payee with, a
bank in The City of New York or Chicago, Illinois.] [If applicable, insert--;
provided, however, that at the option of the Company payment of interest may be
made by United States dollar check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register] [or by wire
transfer to an account maintained by such Person with a bank in the continental
United States (so long as the Company has received proper transfer instructions
in writing)].
 
  [If the registered owner of this Security is the Depository or a nominee of
the Depository, insert--THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.]
 
  Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
 
  Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
 
                                      A-2
<PAGE>
 
  In Witness Whereof, the Company has caused this instrument to be duly
executed under its corporate seal.
 
Dated:
                                          Ameritech Capital Funding
                                           Corporation
 
 
                                          By___________________________________
                                                    Authorized Officer
[Seal]
 
Attest:
- -------------------------------
 
                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION
 
  This is one of the Securities of the series designated herein and referred to
in the within-mentioned Indenture.
 
                                          Harris Trust and Savings Bank,
                                          as Trustee
 
                                          [By_________________________________]
                                                  As Authenticating Agent
 
 
                                          By___________________________________
                                                    Authorized Officer
 
                                      A-3
<PAGE>
 
                               [FORM OF REVERSE]
 
  This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of          , 1995, (herein called the
"Indenture"), among the Company, the Guarantor and Harris Trust and Savings
Bank, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Guarantor, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [, limited in
aggregate principal amount to [U.S.] $       ].
 
  [If applicable, insert--Calculation of the Spread and Spread Multiplier shall
be done in accordance with the Indenture, as it may be amended or supplemented
to the date hereof.]
 
  [If applicable, insert--The Securities of this series are subject to
redemption [(1)] [If applicable, insert--on        in any year commencing with
the year      and ending with the year      through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, [and](2)] [If applicable, insert--at any time [on or after 19   ], as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount); If redeemed [on or
before      ,    %, and if redeemed] during the 12-month period beginning
      of the years indicated,
 
<TABLE>
<CAPTION>
      REDEMPTION
YEAR    PRICE
- ----  ----------
<S>   <C>
</TABLE>
<TABLE>
<CAPTION>
      REDEMPTION
YEAR    PRICE
- ----  ----------
<S>   <C>
</TABLE>
 
and thereafter at a Redemption Price equal to % of the principal amount,] [If
applicable, insert--[and ()] under the circumstances described in the next
[two] succeeding paragraph[s] at a Redemption Price equal to 100% of the
principal amount,] together in the case of any such redemption [If applicable,
insert--(whether through operation of the sinking fund or otherwise)] with
accrued interest to the Redemption Date; provided, however, that installments
of interest on this Security whose Stated Maturity Date is on or prior to such
Redemption Date will be payable to the Holder of this Security, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
 
  [If applicable, insert--The Securities of this series are subject to
redemption (1) on        in any year commencing with the year      and ending
with the year      through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [on or after      ] , as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below: If redeemed during the 12-month
period beginning of the years indicated,
 
<TABLE>
      <S>              <C>                                        <C>
                       REDEMPTION PRICE FOR                        REDEMPTION PRICE FOR
                        REDEMPTION THROUGH                         REDEMPTION OTHERWISE
      YEAR               OPERATION OF THE                         THAN THROUGH OPERATION
      ----                 SINKING FUND                            OF THE SINKING FUND
                       --------------------                       ----------------------
</TABLE>
 
 
                                      A-4
<PAGE>
 
and thereafter at a Redemption Price equal to     % of the principal amount.
[If applicable, insert--and (3) under the circumstances described in the next
[two] succeeding paragraph[s] at a Redemption Price equal to 100% of the
principal amount,] together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date; provided, however, that installments of interest on this
Security whose Stated Maturity Date is on or prior to such Redemption Date will
be payable to the Holder of this Security, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to      , redeem any
Securities of this series as contemplated by Clause [(2)] above as a part of,
or in anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than     % per annum.]
 
  [If applicable, insert--The sinking fund for this series provides for the
redemption on       in each year, beginning with the year      and ending with
the year     , of [not less than] [U.S.] $        [("mandatory sinking fund")
and not more than [ U.S.]$        aggregate principal amount of Securities of
this series. [Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to be
made--in the inverse order in which they become due.]]
 
  Notice of redemption will be given by mail to Holders of Securities, not less
than 30 nor more than 60 days prior to the date fixed for redemption, all as
provided in the Indenture.
 
  In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
 
  [If applicable, insert--The Indenture contains provisions for defeasance of
(a) the entire indebtedness of this Security and (b) certain restrictive
covenants upon compliance by the Company with certain conditions set forth
therein.]
 
  [If applicable, insert--If so specified on the face hereof, the interest rate
on this Security may be reset by the Company on the date or dates specified on
the face hereof (each an "Optional Reset Date"). Not later than      days prior
to each Optional Reset Date, the Trustee will mail to the Holder of this
Security a notice (the "Reset Notice") first-class postage prepaid indicating
whether the Company has elected to reset the interest rate, and if so (a) such
new interest rate and (b) the provisions, if any, for redemption during the
period from such Optional Reset Date to the next Optional Reset Date or if
there is no such Optional Reset Date, to the Stated Maturity of this Security
(each such period a "Subsequent Interest Period"), including the date or dates
on which or the period or periods during which and the price or prices at which
such redemption may occur during the Subsequent Interest Period.
 
  Notwithstanding the foregoing, not later than         days prior to the
Optional Reset Date, the Company may, at its option, revoke the interest rate
provided for in the Reset Notice and establish a higher interest rate for the
Subsequent Interest Period by causing the Trustee to mail notice of such higher
interest rate to the Holder of this Security. Such notice shall be irrevocable.
All Registered Securities with respect to which the interest rate is reset on
an Optional Reset Date will bear such higher interest rate.
 
  The Holder of this Security will have the option to elect repayment by the
Company on each Optional Reset Date at a price equal to the principal amount
hereof plus interest accrued to such Optional Reset Date. In order to obtain
repayment on an Optional Reset Date, the Holder must follow the procedures set
forth below for optional repayment except that the period for delivery or
notification to the Trustee shall be at least       but not more than      days
prior to such Optional Reset Date and except that, if the Holder has tendered
this Security for repayment pursuant to the Reset Notice, the Holder may, by
written
 
                                      A-5
<PAGE>
 
notice to the Trustee, revoke such tender or repayment until the close of
business on the       day before such Optional Reset Date.]
 
  [If applicable, insert--If so specified on the face hereof, the Maturity of
this Security may be extended at the option of the Company for the period or
period of whole years specified on the face hereof (each an "Extension Period")
up to but not beyond the date (the "Final Maturity") set forth on the face
hereof. If the Company exercises such option, the Trustee will mail to the
Holder of this Security not later than      days prior to the old Stated
Maturity a notice (the "Extension Notice") first-class postage prepaid
indicating (a) the election of the Company to extend the Maturity, (b) the new
Stated Maturity, (c) the interest rate applicable to the Extension Period and
(d) the provisions, if any, for redemption during such Extension Period. Upon
the Trustee's mailing of the Extension Notice, the Maturity of this Security
shall be extended automatically and, except as modified by the Extension Notice
and as described in the next paragraph, this Security will have the same terms
as prior to the mailing of such Notice.
 
  Notwithstanding the foregoing, not later than       days before the old
Stated Maturity of this Security the Company may, at its option, revoke the
interest rate provided for in the Extension Notice and establish a higher
interest rate for the Extension Period by causing the Trustee to mail notice of
such higher interest rate first-class postage prepaid to the Holder of this
Security. Such notice shall be irrevocable. All Registered Securities with
respect to which the Maturity is extended will bear such higher interest rate.
 
  If the Company extends the Maturity of this Security, the Holder will have
the option to elect repayment of this Security by the Company on the old Stated
Maturity at a price equal to the principal amount hereof, plus interest accrued
to such date. In order to obtain repayment on the old Stated Maturity once the
Company has extended the Maturity hereof, the Holder must follow the procedures
set forth below for optional repayment, except that the period for delivery or
notification to the Trustee shall be at least      but not more than      days
prior to the old Stated Maturity and except that, if the Holder has tendered
this Security for repayment pursuant to an Extension Notice, the Holder may by
written notice to the Trustee revoke such tender for repayment until the close
of business on the      day before the old Stated Maturity.]
 
  [If applicable, insert--If so specified on the face hereof, this Security
will be repayable prior to Maturity at the option of the Holder on the Optional
Repayment Dates shown on the face hereof at the Optional Repayment Prices shown
on the face hereof together with accrued interest to the date of repayment. In
order for this Security to be repaid, the Trustee must receive at least
but not more than      days prior to an Optional Repayment Date (a) this
Security with the form entitled "Option to Elect Repayment" duly completed or
(b) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States of America
setting forth the name of the Holder of this Security, the principal amount of
the Security to be repaid, the certificate number or a description of the tenor
and terms of this Security, a statement that the option to elect repayment is
being exercised thereby and a guarantee that this Security with the form
entitled "Option to Elect Repayment" duly completed will be received by the
Trustee not later than      Business Days after the date of such telegram,
telex, facsimile transmission or letter. If the procedure described in clause
(b) of the preceding sentence is followed, this Security with such form duly
completed must be received by the Trustee by such      Business Day. Any tender
of this Security for repayment [(except pursuant to a Reset Notice or an
Extension Notice)] shall be irrevocable. The repayment option may be exercised
by the Holder of this Security for less than the entire principal amount of the
Security provided that the principal amount of the Security remaining
outstanding after repayment is an authorized denomination. Upon such partial
repayment this Security shall be cancelled and a new Security or Securities for
the remaining principal amount hereof shall be issued in the name of the Holder
of this Security.]
 
  If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
 
                                      A-6
<PAGE>
 
  The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company and the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
 
  As set forth in, and subject to, the provisions of the Indenture, no Holder
of any Security of this series will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of [(and premium, if any)] or interest
on this Security on or after the respective due dates expressed herein.
 
  No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of [(and premium, if any)] and
interest on this Security at the times, place[s] and rate, and in the coin or
currency, herein prescribed.
 
  As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in [any place where the principal of [(and premium, if
any)] and interest on this Security are payable] [the Borough of Manhattan, The
City of New York, Chicago, Illinois, or, subject to any laws or regulations
applicable thereto and to the right of the Company (limited as provided in the
Indenture) to rescind the designation of any such transfer agent, at the [main]
offices of          in         and         in         or at such other offices
or agencies as the Company may designate], duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
 
  The Securities of this series are issuable only in registered form, without
coupons, in denominations of $        and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of the series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
 
  [If applicable, insert--If this Security is a global Security (as specified
on the face hereof), this Security is exchangeable only if (x) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for this global Security or if at any time the Depository ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines
 
                                      A-7
<PAGE>
 
that this Security shall be exchangeable for definitive Securities in
registered form or (z) an Event of Default, or an event which with the passage
of time or the giving of notice would become an Event of Default, with respect
to the Securities represented hereby has occurred and is continuing, provided
that the definitive Securities so issued in exchange for this permanent global
Security shall be in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof and be of like aggregate principal amount and tenor as
the portion of this permanent global Security to be exchanged, and provided
further that, unless the Company agrees otherwise, Securities of this series in
definitive registered form will be issued in exchange for this permanent global
Security, or any portion hereof, only if such Securities in definitive
registered form were requested by written notice to the Trustee or the Security
Registrar by or on behalf of a Person who is beneficial owner of an interest
hereof given through the Holder hereof. Except as provided above, owners of
beneficial interests in this permanent global Security will not be entitled to
receive physical delivery of Securities in definitive registered form and will
not be considered the Holders thereof for any purpose under the Indenture.]
 
  No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
 
  Prior to due presentment of this Security for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor
or the Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security is overdue,
and neither the Company, the Guarantor, the Trustee nor any such agent shall be
affected by notice to the contrary.
 
  All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
 
                                   GUARANTEE
 
  For Value Received, Ameritech Corporation, a Delaware corporation (the
"Guarantor"), hereby unconditionally guarantees to the Holder of the Security
upon which this Guarantee is endorsed the due and punctual payment of the
principal of, sinking fund payment, if any, premium, if any, or interest on
said Security, when and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, according to the terms thereof and of
the Indenture referred to therein.
 
  The Guarantor agrees to determine, at least one business day prior to the
date upon which a payment of principal of, sinking fund payment, if any,
premium, if any, or interest on said Security is due and payable, whether the
Company has available the funds to make such payment as the same shall become
due and payable. In case of the failure of the Company punctually to pay any
such principal, sinking fund payment, if any, premium, if any, or interest, the
Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at maturity, upon
redemption, or otherwise, and as if such payment were made by the Company.
 
  The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Security or said Indenture, the absence
of any action to enforce the same, any waiver or consent by the Holder of said
Security with respect to any provisions thereof, the recovery of any judgment
against the Company or any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to said Security or indebtedness
evidenced thereby, and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in said Security and in this Guarantee.
 
                                      A-8
<PAGE>
 
  The Guarantor shall be subrogated to all rights of the Holder of said
Security against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guarantee; provided, however, that the
Guarantor shall not, without the consent of the Holders of all of the
Securities then outstanding, be entitled to enforce or to receive any payments
arising out of or based upon such right of subrogation until the principal of
and premium, if any, and interest on all Securities shall have been paid in
full or payment thereof shall have been provided for in accordance with said
Indenture.
 
  Notwithstanding anything to the contrary contained herein, if following any
payment of principal or interest by the Company on the Securities to the
Holders of the Securities it is determined by a final decision of a court of
competent jurisdiction that such payment shall be avoided by a trustee in
bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C.
Section 547 and such payment is paid by such Holder to such trustee in
bankruptcy, then and to the extent of such repayment, the obligations of the
Guarantor hereunder shall remain in full force and effect.
 
  The Guarantor hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened prior to the
creation and issuance of this Guarantee and to constitute the same as the
legal, valid and binding obligation of the Guarantor enforceable in accordance
with its terms, have been done and performed and have happened in due and
strict compliance with applicable laws.
 
  This Guarantee shall not be valid or become obligatory for any purpose with
respect to a Security until the certificate of authentication on such Security
shall have been signed by the Trustee (or the Authenticating Agent).
 
  This Guarantee shall be governed by the internal laws (as opposed to
conflicts of laws provisions) of the State of Illinois.
 
  All terms used in this Guarantee which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
 
  In Witness Whereof, Ameritech Corporation has caused this Guarantee to be
signed in its corporate name by the facsimile signature of one of its officers
thereunto duly authorized and has caused a facsimile of its corporate seal to
be affixed hereunto or imprinted or otherwise reproduced hereon.
 
Dated as of:      , 19
 
 
                                          Ameritech Corporation
 
 
                                          By: _________________________________
                                                    Authorized Officer
 
[Seal]
 
                                      A-9
<PAGE>
 
                               ----------------
 
                                 ABBREVIATIONS
 
  The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
 
     TEN COM--as tenants in common
 
     TEN ENT--as tenants by the entireties
 
     JT TEN--as joint tenants with right of survivorship and not as
     tenants in common
 
     UNIF GIFT MIN ACT-- ________________ Custodian ________________
                                (Cust)                    (Minor)
 
                            Under Uniform Gifts to Minors Act
                            ------------------------------------------
                                             (State)
 
  Additional abbreviations may also be used though not in the above list.
 
                               ----------------
 
  For Value Received, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
 
    PLEASE INSERT SOCIAL SECURITY OR
  OTHER IDENTIFYING NUMBER OF ASSIGNEE
 
- ----------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
    PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
                                    ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing _________________________________________________________________
_________________________ attorney to transfer said Security on the books of the
Company, with full power of substitution in the premises.
 
Dated:
                                          _____________________________________
                                                        Signature
 
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
 
                                      A-10
<PAGE>
 
                                                                       EXHIBIT B
 
                    [FORM OF REGISTERED SECURITY WHICH IS AN
                       ORIGINAL ISSUE DISCOUNT SECURITY]
 
                                 [FORM OF FACE]
 
  FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS   % OF ITS
PRINCIPAL AMOUNT, THE ISSUE DATE IS           , 19  , [AND] THE YIELD TO
MATURITY IS     % [, THE METHOD USED TO DETERMINE THE YIELD IS       AND THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD OF
          , 19   TO           , 19   , IS     % OF THE PRINCIPAL AMOUNT OF THIS
SECURITY].
 
                     AMERITECH CAPITAL FUNDING CORPORATION
 
No. [R- ]                                                      [U.S.] $
 
  [If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository,
insert--Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.]
 
                                          INITIAL REDEMPTION DATE:
ISSUE PRICE:
 
 
                                          TOTAL AMOUNT OF OID:
ORIGINAL ISSUE DATE:
 
 
                                          YIELD TO MATURITY:
STATED MATURITY:
 
 
                                          INITIAL ACCRUAL PERIOD OID:
BASE RATE:
 
 
                                          OPTION TO ELECT REPAYMENT: YES NO
INITIAL INTEREST RATE:
 
 
                                          OPTIONAL REPAYMENT DATES:
INDEX MATURITY:
 
 
                                          OPTIONAL REPAYMENT PRICES:
SPREAD (PLUS OR MINUS):
 
 
                                          OPTIONAL RESET DATES:
SPREAD MULTIPLIER:
 
 
                                          OPTIONAL EXTENSION: YES NO
MAXIMUM INTEREST RATE:
 
 
                                          FINAL MATURITY:
MINIMUM INTEREST RATE:
 
 
                                          DEPOSITORY:
INTEREST RESET PERIOD:
 
 
                                          REPAYMENT PROVISIONS (If
INTEREST RESET DATES:                     applicable):
 
 
INTEREST PAYMENT DATES:                   OTHER PROVISIONS:
 
  Ameritech Capital Funding Corporation, a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to            , or
registered assigns the principal sum of            [United States] Dollars on
                 [If the Security is interest-bearing, insert--, and to pay
interest thereon from           , 19   or from the most recent Interest Payment
Date to which interest has been paid or duly provided for in arrears [If
applicable, insert--; provided, however, that if this Security has a weekly
Interest Rate Reset Period, as shown above, such interest will be paid from the
Original Issue Date shown above or from the day following the most recent
Regular Record Date to which interest has been paid or duly provided for in
arrears]. Interest
 
                                      B-1
<PAGE>
 
will be paid [semi-annually in arrears on                  and in each year]
[annually in arrears on                  in each year] ([each] an "Interest
Payment Date"), commencing           , 19   at the rate of     % [or describe
formula to calculate rate, e.g. commercial paper rate] per annum, until the
principal hereof is paid or made available for payment. [If applicable,
insert--, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of     % per annum on any overdue principal [and
premium] and on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the            [or
          ] (whether or not a Business Day) [, as the case may be,] next
preceding such Interest Payment Date; provided, however, that interest payable
at Maturity will be payable to the Person to whom principal shall be payable.
The first payment of interest on any Security originally issued between a
Regular Record Date and an Interest Payment Date will be made on the Interest
Payment Date following the next succeeding Regular Record Date to the
registered owner on such Regular Record Date. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the Payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture]. [If the Security is not to bear interest prior to
Maturity, insert--The principal of this Security shall not bear interest except
in the case of a default in payment of principal upon acceleration, upon
redemption or at Stated Maturity Date, and in such case the overdue principal
of this Security shall bear interest at the rate of     % per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such default in payment to the date payment of
such principal has been made or duly provided for. Interest on any overdue
principal shall be payable on demand. Any such interest on any overdue
principal that is not so paid on demand shall bear interest at the rate of
    % per annum (to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of such demand for
payment to the date payment of such interest has been made or duly provided
for, and such interest shall also be payable on demand.] Payment of the
principal of [(and premium, if any)] and [If applicable, insert--any such]
interest on this Security will be made at [the office or agency of the Company
maintained for that purpose in           , in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts] [the option of the Holder (a) at [the Corporate
Trust Office of the Trustee] or such other office or agency of the Company as
may be designated by it for such purpose in the Borough of Manhattan, The City
of New York, or Chicago, Illinois, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts or (b) subject to any laws or regulations
applicable thereto and to the right of the Company (limited as provided in the
Indenture) to rescind the designation of any such Paying Agent, at the (main)
offices of         in        , in        , in        , in         and in
       , or at such other offices or agencies as the Company may designate, by
United States dollar check drawn on, or transfer to a United States dollar
account maintained by the payee with a bank in The City of New York or Chicago,
Illinois] [If applicable, insert--; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register] [or by wire transfer to an account maintained by such Person with a
bank in the continental United States (so long as the Company has received
proper transfer instructions in writing)].
 
  [If the registered owner of this Security is the Depository or a nominee of
the Depository, insert--THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE
 
                                      B-2
<PAGE>
 
OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR OF
THE DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.]
 
  Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
 
  Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
 
  In Witness Whereof, the Company has caused this instrument to be duly
executed under its corporate seal.
 
                                          Ameritech Capital Funding
                                          Corporation
 
 
                                          By___________________________________
                                                   Authorized Officer
Dated:
 
[Seal]
 
Attest:
 
- ------------------------------------------
 
                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION
 
  This is one of the Securities of the series designated herein and referred to
in the within-mentioned Indenture.
 
                                          Harris Trust and Savings Bank,
                                          as Trustee
 
                                          [By_________________________________]
                                                  As Authenticating Agent
 
                                          By___________________________________
                                                    Authorized Officer
 
                                      B-3
<PAGE>
 
                               [FORM OF REVERSE]
 
  This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of           , 19   among the Company, the
Guarantor and Harris Trust and Savings Bank, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Guarantor, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to
[U.S.] $          ].
 
  [If applicable, insert--Calculation of the Spread and Spread Multiplier shall
be done in accordance with the Indenture, as it may be amended or supplemented
to the date hereof.]
 
  [If applicable, insert--The Securities of this series are subject to
redemption [(1)] [If applicable, insert--on                  in any year
commencing with the year      and ending with the year      through operation
of the sinking fund for this series at a Redemption Price equal to [Insert
formula for determining the amount], [and] (2)] [If applicable, insert--at any
time [on or after           , 19  ], as a whole or in part, at the election of
the Company, at the following Redemption Prices (expressed as percentages of
the principal amount): If redeemed [on or before                 ,     %, and
if redeemed] during the 12-month period beginning                  of the years
indicated,
 
<TABLE>
<CAPTION>
      REDEMPTION
YEAR    PRICE
- ----  ----------
<S>   <C>
 
</TABLE>
<TABLE>
<CAPTION>
      REDEMPTION
YEAR    PRICE
- ----  ----------
<S>   <C>
</TABLE>
 
and thereafter at a Redemption Price equal to     % of the principal amount,]
[If applicable, insert--[and ( )] under the circumstances described in the next
[two] succeeding paragraph[s] at a Redemption Price equal to [Insert formula
for determining the amount]] [If the Security is interest-bearing, insert--,
together in the case of any such redemption [If applicable, insert--(whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
Security whose Stated Maturity Date is on or prior to such Redemption Date will
be payable to the Holder of this Security, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.]
 
  [If applicable, insert--The Securities of this series are subject to
redemption (1) on                  in any year commencing with the year
and ending with the year      through operation of the sinking fund for this
series at the Redemption Prices for redemption through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below, and (2) at any time [on or after           , 19  ], as a whole or in
part, at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed during the
12-month period beginning                  of the years indicated,
 
<TABLE>
      <S>              <C>                                        <C>
                       REDEMPTION PRICE FOR                        REDEMPTION PRICE FOR
                        REDEMPTION THROUGH                         REDEMPTION OTHERWISE
      YEAR               OPERATION OF THE                         THAN THROUGH OPERATION
      ----                 SINKING FUND                            OF THE SINKING FUND
                       --------------------                       ----------------------
 
</TABLE>
 
                                      B-4
<PAGE>
 
and thereafter at a Redemption Price equal to     % of the principal amount.
[If applicable, insert--and (3) under the circumstances described in the next
[two] succeeding paragraph[s] at a Redemption Price equal to [Insert formula
for determining the amount]] [If the Security is interest-bearing, insert--,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity Date is on or prior to such Redemption Date will be payable to the
Holder of this Security, or one or more Predecessor Securities, of record at
the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the
Company may not, prior to                 , redeem any Securities of this
series as contemplated by Clause [(2)] above as a part of, or in anticipation
of, any refunding operation by the application, directly or indirectly, of
moneys borrowed having an interest cost to the Company (calculated in
accordance with generally accepted financial practice) of less than     %, per
annum.]
 
  [If applicable, insert--The sinking fund for this series provides for the
redemption on            in each year, beginning with the year      and ending
with the year     , of [not less than] [U.S.] $          [("mandatory sinking
fund") and not more than [U.S.] $          aggregate principal amount of
Securities of this series. [Securities of this series acquired or redeemed by
the Company otherwise than through [mandatory] sinking fund payments may be
credited against subsequent [mandatory] sinking fund payments otherwise
required to be made--in the inverse order in which they become due.]]
 
  Notice of redemption will be given by mail to Holders of Securities, not less
than 30 nor more than 60 days prior to the date fixed for redemption, all as
provided in the Indenture.
 
  In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
 
  [If applicable, insert--The Indenture contains provisions for defeasance of
(a) the entire indebtedness of this Security and (b) certain restrictive
covenants upon compliance by the Company with certain conditions set forth
therein.]
 
  [If applicable, insert--If so specified on the face hereof, the interest rate
on this Security may be reset by the Company on the date or dates specified on
the face hereof (each an "Optional Reset Date"). Not later than    days prior
to each Optional Reset Date, the Trustee will mail to the Holder of this
Security a notice (the "Reset Notice") first-class postage prepaid indicating
whether the Company has elected to reset the interest rate, and if so (a) such
new interest rate and (b) the provisions, if any, for redemption during the
period from such Optional Reset Date to the next Optional Reset Date or if
there is no such Optional Reset Date, to the Stated Maturity of this Security
(each such period a "Subsequent Interest Period"), including the date or dates
on which or the period or periods during which and the price or prices at which
such redemption may occur during the Subsequent Interest Period.
 
  Notwithstanding the foregoing, not later than    days prior to the Optional
Reset Date, the Company may, at its option, revoke the interest rate provided
for in the Reset Notice and establish a higher interest rate for the Subsequent
Interest Period by causing the Trustee to mail notice of such higher interest
rate to the Holder of this Security. Such notice shall be irrevocable. All
registered Securities with respect to which the interest rate is reset on an
Optional Reset Date will bear such higher interest rate.
 
  The Holder of this Security will have the option to elect repayment by the
Company on each Optional Reset Date at a price equal to the principal amount
hereof plus interest accrued to such Optional Reset Date. In order to obtain
repayment on an Optional Reset Date, the Holder must follow the procedures set
forth below for optional repayment except that the period for delivery or
notification to the Trustee shall be at least    but not more than    days
prior to such Optional Reset Date and except that, if the Holder has tendered
this Security for repayment pursuant to the Reset Notice, the Holder may, by
written notice to the Trustee, revoke such tender or repayment until the close
of business on the day before such Optional Reset Date.]
 
                                      B-5
<PAGE>
 
  [If applicable, insert--If so specified on the face hereof, the Maturity of
this Security may be extended at the option of the Company for the period or
period of whole years specified on the face hereof (each an "Extension Period")
up to but not beyond the date (the "Final Maturity") set forth on the face
hereof. If the Company exercises such option, the Trustee will mail to the
Holder of this Security not later than days prior to the old Stated Maturity a
notice (the "Extension Notice") first-class postage prepaid indicating (a) the
election of the Company to extend the Maturity, (b) the new Stated Maturity,
(c) the interest rate applicable to the Extension Period and (d) the
provisions, if any, for redemption during such Extension Period. Upon the
Trustee's mailing of the Extension Notice, the Maturity of this Security shall
be extended automatically and, except as modified by the Extension Notice and
as described in the next paragraph, this Security will have the same terms as
prior to the mailing of such Notice.
 
  Notwithstanding the foregoing, not later than days before the old Stated
Maturity of this Security the Company may, at its option, revoke the interest
rate provided for in the Extension Notice and establish a higher interest rate
for the Extension Period by causing the Trustee to mail notice of such higher
interest rate first-class postage prepaid to the Holder of this Security. Such
notice shall be irrevocable. All Registered Securities with respect to which
the Maturity is extended will bear such higher interest rate.
 
  If the Company extends the Maturity of this Security, the Holder will have
the option to elect repayment of this Security by the Company on the old Stated
Maturity at a price equal to the principal amount hereof, plus interest accrued
to such date. In order to obtain repayment on the old Stated Maturity once the
Company has extended the Maturity hereof, the Holder must follow the procedures
set forth below for optional repayment except that the period for delivery or
notification to the Trustee shall be at least but not more than days prior to
the old Stated Maturity and except that, if the Holder has tendered this Note
for repayment pursuant to an Extension Notice, the Holder may by written notice
to the Trustee revoke such tender for repayment until the close of business on
the day before the old Stated Maturity.]
 
  [If applicable, insert--If so specified on the face hereof, this Security
will be repayable prior to Maturity at the option of the Holder on the Optional
Repayment Dates shown on the face hereof at the Optional Repayment Prices shown
on the face hereof together with accrued interest to the date of repayment. In
order for this Security to be repaid, the Trustee must receive at least    but
not more than    days prior to an Optional Repayment Date (a) this Security
with the form entitled "Option to Elect Repayment" duly completed or (b) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or trust company in the United States of America setting
forth the name of the Holder of this Security, the principal amount of the
Security to be repaid, the certificate number or a description of the tenor and
terms of this Security, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Security with the form entitled
"Option to Elect Repayment" duly completed will be received by the Trustee not
later than Business Days after the date of such telegram, telex, facsimile
transmission or letter. If the procedure described in clause (b) of the
preceding sentence is followed, this Security with such form duly completed
must be received by the Trustee by such    Business Day. Any tender of this
Security for repayment [(except pursuant to a Reset Notice or an Extension
Notice)] shall be irrevocable. The repayment option may be exercised by the
Holder of this Security for less than the entire principal amount of the
Security provided that the principal amount of the Security remaining
outstanding after repayment is an authorized denomination. Upon such partial
repayment this Security shall be cancelled and a new Security or Securities for
the remaining principal amount hereof shall be issued in the name of the Holder
of this Security.]
 
  If an Event of Default with respect to Securities of this series shall occur
and be continuing, an amount of principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to [--insert formula for determining the
amount.] Upon payment (a) of the amount of principal so declared due and
payable and (b) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this series shall
terminate.
 
                                      B-6
<PAGE>
 
  The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantor and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company and the Guarantor with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
 
  As set forth in, and subject to, the provisions of the Indenture, no Holder
of any Security of this series will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of [(and premium, if any)] or [any]
interest on this Security on or after the respective due dates expressed
herein.
 
  No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of [(and premium, if any)] and
[any] interest on this Security at the times, place[s] and rate, and in the
coin or currency, herein prescribed.
 
  As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in [any place where the principal of [(and premium, if
any)] and [any] interest on this Security are payable] [the Borough of
Manhattan, The City of New York, Chicago, Illinois, or, subject to any laws or
regulations applicable thereto and to the right of the Company (limited as
provided in the Indenture) to rescind the designation of any such transfer
agent, at the [main] offices of         in         and         in         or at
such other offices or agencies as the Company may designate], duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
 
  The Securities of this series are issuable only in registered form, without
coupons, in denominations of $    and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
 
  [Insert, if applicable--If this Security is a global Security (as specified
on the face hereof), this Security is exchangeable only if (x) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for this global Security or if at any time the Depository ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, (y) the Company in its sole discretion determines that this Security
shall be exchangeable for definitive Securities in registered form or (z) an
Event of Default,
 
                                      B-7
<PAGE>
 
or an event which with the passage of time or the giving of notice would become
an Event of Default, with respect to the Securities represented hereby has
occurred and is continuing, provided that the definitive Securities so issued
in exchange for this permanent global Security shall be in denominations of
$100,000 and any integral multiple of $1,000 in excess thereof and be of like
aggregate principal amount and tenor as the portion of this permanent global
Security to be exchanged, and provided further that, unless the Company agrees
otherwise, Securities of this series in definitive registered form will be
issued in exchange for this permanent global Security, or any portion hereof,
only if such Securities in definitive registered form were requested by written
notice to the Trustee or the Security Registrar by or on behalf of a Person who
is beneficial owner of an interest hereof given through the Holder hereof.
Except as provided above, owners of beneficial interests in this permanent
global Security will not be entitled to receive physical delivery of Securities
in definitive registered form and will not be considered the Holders thereof
for any purpose under the Indenture.]
 
  No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
 
  Prior to due presentment of this Security for registration of transfer, the
Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor
or the Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security is overdue,
and neither the Company, the Guarantor, the Trustee nor any such agent shall be
affected by notice to the contrary.
 
  All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
 
                                   GUARANTEE
 
  For Value Received, Ameritech Corporation, a Delaware corporation (the
"Guarantor"), hereby unconditionally guarantees to the Holder of the Security
upon which this Guarantee is endorsed the due and punctual payment of the
principal of, sinking fund payment, if any, premium, if any, or interest on
said Security, when and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, according to the terms thereof and of
the Indenture referred to therein.
 
  The Guarantor agrees to determine, at least one business day prior to the
date upon which a payment of principal of, sinking fund payment, if any,
premium, if any, or interest on said Security is due and payable, whether the
Company has available the funds to make such payment as the same shall become
due and payable. In case of the failure of the Company punctually to pay any
such principal, sinking fund payment, if any, premium, if any, or interest, the
Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at maturity, upon
redemption, or otherwise, and as if such payment were made by the Company.
 
  The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Security or said Indenture, the absence
of any action to enforce the same, any waiver or consent by the Holder of said
Security with respect to any provisions thereof, the recovery of any judgment
against the Company or any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to said Security or indebtedness
evidenced thereby, and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in said Security and in this Guarantee.
 
                                      B-8
<PAGE>
 
  The Guarantor shall be subrogated to all rights of the Holder of said
Security against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guarantee; provided, however, that the
Guarantor shall not, without the consent of the Holders of all of the
Securities then outstanding, be entitled to enforce or to receive any payments
arising out of or based upon such right of subrogation until the principal of
and premium, if any, and interest on all Securities shall have been paid in
full or payment thereof shall have been provided for in accordance with said
Indenture.
 
  Notwithstanding anything to the contrary contained herein, if following any
payment of principal or interest by the Company on the Securities to the
Holders of the Securities it is determined by a final decision of a court of
competent jurisdiction that such payment shall be avoided by a trustee in
bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C.
Section 547 and such payment is paid by such Holder to such trustee in
bankruptcy, then and to the extent of such repayment, the obligations of the
Guarantor hereunder shall remain in full force and effect.
 
  The Guarantor hereby certifies and warrants that all acts, conditions and
things required to be done and performed and to have happened prior to the
creation and issuance of this Guarantee and to constitute the same as the
legal, valid and binding obligation of the Guarantor enforceable in accordance
with its terms, have been done and performed and have happened in due and
strict compliance with applicable laws.
 
  This Guarantee shall not be valid or become obligatory for any purpose with
respect to a Security until the certificate of authentication on such Security
shall have been signed by the Trustee (or the Authenticating Agent).
 
  This Guarantee shall be governed by the internal laws (as opposed to
conflicts of laws provisions) of the State of Illinois.
 
  All terms used in this Guarantee which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
 
  In Witness Whereof, Ameritech Corporation has caused this Guarantee to be
signed in its corporate name by the facsimile signature of one of its officers
thereunto duly authorized and has caused a facsimile of its corporate seal to
be affixed hereunto or imprinted or otherwise reproduced hereon.
 
Dated as of:           , 19
 
                                          Ameritech Corporation
 
                                          By: _________________________________
                                                    Authorized Officer
[Seal]
 
                               ----------------
 
                                 ABBREVIATIONS
 
  The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
 
     TEN COM--as tenants in common
 
     TEN ENT--as tenants by the entireties
 
     JT TEN--as joint tenants with right of survivorship and not as
     tenants in common
 
     UNIF GIFT MIN ACT--_________________Custodian__________________
                                 (Cust)                   (Minor)
                            -------------------------------------------
                            Under Uniform Gifts to Minors Act
                            -------------------------------------------
                                              (State)
 
  Additional abbreviations may also be used though not in the above list.
 
                                      B-9
<PAGE>
 
                               ----------------
 
  For Value Received, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
 
    PLEASE INSERT SOCIAL SECURITY OR
  OTHER IDENTIFYING NUMBER OF ASSIGNEE
 
- ----------------------------------------
- --------------------------------------------------------------------------------
 
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
 
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing                attorney to transfer said Security on the books
of the Company, with full power of substitution in the premises.
 
Dated:
                                          _____________________________________
                                                        Signature
 
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
 
                                      B-10
<PAGE>
 
                                                                       EXHIBIT C
                           [FORMS OF CERTIFICATION ]
 
                                  EXHIBIT C.1
 
                      [FORM OF CERTIFICATE TO BE GIVEN BY
                  PERSON ENTITLED TO RECEIVE BEARER SECURITY]
 
                                  CERTIFICATE
 
                               ----------------
 
     [Insert title or sufficient description of Securities to be delivered]
 
  This is to certify that the above-captioned Securities (a) [Not applicable
with respect to a Security owned by a financial institution during the
"restricted period" within the meaning of Section 1.163-5(c)(2)(i)(D)(7) of the
United States Treasury regulations] are not being acquired by or on behalf of a
United States person or any person inside the United States or, if a beneficial
interest in the Securities is being acquired by or on behalf of a United States
person or any person inside the United States, that such United States person
is a financial institution within the meaning of Section 1.165-12(c)(1)(v) of
the United States Treasury regulations which agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
and the regulations thereunder, or (b) are being acquired by a financial
institution within the meaning of Section 1.165-12(c)(1)(V) of such regulations
for purposes of resale, but not for purposes of resale, directly or indirectly,
to a person inside the United States or to a United States person. If the
undersigned is a dealer, the undersigned agrees to obtain a similar certificate
from each person entitled to delivery of any of the above-captioned Securities
in bearer form purchased from it; provided, however, that if the undersigned
has actual knowledge that the information contained in such a certificate is
false, the undersigned will not deliver a Security in temporary or definitive
bearer form to the person who signed such certificate notwithstanding the
delivery of such certificate to the undersigned.
 
  As used herein, "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source, and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
 
  We undertake to advise you by telex if the above statement as to beneficial
ownership is not correct on the date of delivery of the above-captioned
Securities in bearer form as to all of such Securities.
 
  We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
 
Dated:                          ,
19
[To be dated on or after
         , 19
(the date determined as
provided in the Indenture)]
 
                                          [Name of Person Entitled to Receive
                                           Security]
 
 
                                          _____________________________________
                                                  (Authorized Signatory)
                                          Name:
                                          Title:
 
                                      C-1
<PAGE>
 
                                  EXHIBIT C.2
 
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR AND CEDEL S.A. IN CONNECTION
WITH THE EXCHANGE OF A PORTION OF A TEMPORARY GLOBAL SECURITY]
 
                                  CERTIFICATE
 
                               ----------------
 
     [Insert title or sufficient description of Securities to be delivered]
 
  This is to certify with respect to $principal amount of the above-captioned
Securities (a) that we have received from each of the persons appearing in our
records as persons entitled to a portion of such principal amount (our
"Qualified Account Holders") a certificate with respect to such portion
substantially in the form attached hereto, and (b) that we are not submitting
herewith for exchange any portion of the temporary global Security representing
the above-captioned Securities excepted in such certificates.
 
  We further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any portion
of the part submitted herewith for exchange are no longer true and cannot be
relied upon as of the date hereof.
 
Dated:                   , 19
[To be dated no earlier than
the Exchange Date]
 
                                          [Morgan Guaranty Trust Company of
                                           New York, Brussels Office, as
                                           Operator of the Euro-clear System]
                                           [CEDEL S.A.]
 
 
                                           By__________________________________
 
 
                                      C-2
<PAGE>
 
                                  EXHIBIT C.3
 
    [FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR AND CEDEL S.A. TO OBTAIN
                      INTEREST PRIOR TO AN EXCHANGE DATE]
 
                                  CERTIFICATE
 
                               ----------------
 
             [Insert title or sufficient description of Securities]
 
  We confirm that the interest payable on the Interest Payment Date on [Insert
Date ] will be paid to each of the persons appearing in our records as being
entitled to interest payable on such date from whom we have received a written
certification, dated not earlier than such Interest Payment Date, substantially
in the form attached hereto. We undertake to retain certificates received from
our member organizations in connection herewith for four years from the end of
the calendar year in which such certificates are received.
 
  We undertake that any interest received by us and not paid as provided above
shall be returned to the Trustee for the above Securities immediately prior to
the expiration of two years after such Interest Payment Date in order to be
repaid by such Trustee to the above issuer at the end of two years after such
Interest Payment Date.
 
Dated:                   , 19
[To be dated on or after the
relevant Interest Payment Date
]
 
                                          [Morgan Guaranty Trust Company of
                                           New York, Brussels Office, as
                                           Operator of the Euro-clear System]
                                           [CEDEL S.A.]
 
 
                                           By__________________________________
 
 
                                      C-3
<PAGE>
 
                                  EXHIBIT C.4
 
            [FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS TO
                   OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]
 
                                  CERTIFICATE
 
                               ----------------
 
             [Insert title or sufficient description of Securities]
 
  This is to certify that as of the Interest Payment Date on [Insert Date] and
except as provided in the third paragraph hereof, none of the above-captioned
Securities held by you for our account was beneficially owned by a United
States person or, if any of such Securities held by you for our account were
beneficially owned by a United States person, such United States person either
provided an Internal Revenue Service Form W-9 with respect to such interest
payment or certified with respect to such interest payment that it was an
exempt recipient as defined in Section 1.6049-4(c)(1)(ii) of the United States
Treasury regulations.
 
  As used herein, "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source, and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
 
  This certificate excepts and does not relate to U.S. $principal amount of the
above-captioned Securities appearing in your books as being held for our
account as to which we are not able to certify and as to which we understand
interest cannot be credited unless and until we are able so to certify.
 
  We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
 
Dated:                   , 19
[To be dated on or after the
15th day before the relevant
Interest Payment Date]
 
                                          [Name of Person Entitled to Receive
                                           Interest]
 
 
                                          _____________________________________
                                                  (Authorized Signatory)
                                          Name:
                                          Title:
 
[If the withholding agent is not a foreign branch of a financial institution
described in Section 871(h)(4)(B) of the Internal Revenue Code of 1986, as
amended, and a United States person, this certificate must be signed under
penalties of perjury.]
 
 
                                      C-4

<PAGE>
 



                                                                 EXHIBIT 5
                                                                 ---------



                                 June 7, 1995



Ameritech Capital Funding Corporation
30 South Wacker Drive
Chicago, Illinois 60606

Ameritech Corporation
30 South Wacker Drive
Chicago, Illinois 60606

Ladies and Gentlemen:

          I have examined the Registration Statement on Form S-3 filed
contemporaneously herewith (the "Registration Statement") by Ameritech Capital
Funding Corporation, a Delaware corporation ("Capital Funding"), and Ameritech
Corporation, a Delaware corporation ("Ameritech"), with the Securities and
Exchange Commission (the "Commission") in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of up to $1,000,000,000 in
aggregate principal amount of debt securities of Capital Funding (the "Debt
Securities") and the unconditional guarantees of Ameritech to be endorsed on
such Debt Securities (the "Guarantees").  I have also examined the form of
Indenture among Capital Funding, Ameritech and Harris Trust and Savings Bank, as
Trustee, under which the Debt Securities and the Guarantees are proposed to be
issued (the "Indenture").

          I have examined such corporate and other records, certificates and
documents and reviewed such questions of law as I have considered necessary or
appropriate for purposes of this opinion.  I have assumed the authenticity of
all documents submitted to me as originals and the conformity with the original
documents of any copies of such documents submitted for examination.

          Based upon the foregoing, I am of the opinion that when the
Registration Statement has become effective, and providing no stop order shall
have been issued by the Commission relating thereto, and when the Debt
Securities and the Guarantees, respectively, have been duly executed,
authenticated and delivered against payment therefor in accordance with and in
the form set forth in the Indenture and in accordance with the terms of the
shareholder and board of directors resolutions, as applicable, and
<PAGE>
 





Page 2


officer's certificates of Capital Funding and Ameritech, the Debt Securities and
the Guarantees will constitute legally issued and binding obligations of Capital
Funding and Ameritech, respectively, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general equitable principles.

          I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and I further consent to the use of my name in the
Prospectus forming a part of the Registration Statement.  In giving this
consent, I do not concede that I am an expert within the meaning of the Act or
the rules and regulations thereunder or that this consent is required by Section
7 of the Act.


                                        Very truly yours,

                                  (Signature of Bruce B. Howat)

<PAGE>
 


                                                                 EXHIBIT 8
                                                                 ---------



                                 June 7, 1995


Ameritech Capital Funding Corporation
30 South Wacker Drive
Chicago, Illinois 60606

Ameritech Corporation
30 South Wacker Drive
Chicago, Illinois 60606

Ladies and Gentlemen:

     We have acted as counsel for Ameritech Capital Funding Corporation
("Capital Funding") and Ameritech Corporation ("Ameritech") in connection with
the preparation of the Form S-3 Registration Statement (the "Registration
Statement") filed with the Securities and Exchange Commission contemporaneously
herewith under the Securities Act of 1933, as amended (the "Act"), which
Registration Statement includes a Prospectus (the "Prospectus").  The Prospectus
relates to  Capital Funding's offer from time to time of debt securities, in one
or more series, in an aggregate principal amount sufficient to result in net
proceeds to Capital Funding of up to U.S. $1,000,000,000 (the "Debt
Securities").  You have requested our opinion as to the accuracy of the
description in the Prospectus of certain federal tax consequences relating to
the Debt Securities.

     We have examined the Prospectus and such other documents and have reviewed
such questions of law as we have considered necessary or appropriate for the
purposes of this opinion.

     It is our opinion that the discussion of the tax consequences of defeasance
under the caption "Defeasance" within the Prospectus is an accurate description
of the material federal tax aspects of a defeasance of the Debt Securities.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.  In giving this consent, we do not concede that we are
experts within the meaning of the Act or the rules and regulations thereunder or
that this consent is required by Section 7 of the Act.


                                              Very truly yours,

                                       (Signature of Winston & Strawn)

<PAGE>
 


                                                               EXHIBIT 23-a
                                                               ------------



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 3, 1995
included in Ameritech Corporation's Annual Report on Form 10-K for the year
ended December 31, 1994 and to all references to our Firm included in this
registration statement.



                                      (Signature of Arthur Andersen LLP)

                                               ARTHUR ANDERSEN LLP



Chicago, Illinois
June 7, 1995

<PAGE>
 


                                                                 EXHIBIT 24
                                                                 ----------

                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
15th day of March, 1995.

                                       (signature of R. H. Brown)
                                       ------------------------------
                                       R. H. Brown
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me R. H. Brown,
to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.

                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of D. C. Clark)
                                       ------------------------------
                                       D .C. Clark
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me D. C.
Clark, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.

                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of M. R. Goodes)
                                       ------------------------------
                                       M. R. Goodes
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me M. R.
Goodes, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of H. H. Gray)
                                       ------------------------------
                                       H. H. Gray
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me H. H.
Gray, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.

                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of J. A. Henderson)
                                       ------------------------------
                                       J. A. Henderson
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me J. A.
Henderson, to me known to be the person described in and who executed the
foregoing instrument, and such person duly acknowledged that such person
executed and delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of S. B. Lubar)
                                       ------------------------------
                                       S. B. Lubar
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me S. B.
Lubar, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of L. M. Martin)
                                       ------------------------------
                                       L. M. Martin
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me L. M.
Martin, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of A. C. Martinez)
                                       ------------------------------
                                       A. C. Martinez

 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me A. C.
Martinez, to me known to be the person described in and who executed the
foregoing instrument, and such person duly acknowledged that such person
executed and delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of R. C. Notebaert)
                                       -----------------------------------
                                       R. C. Notebaert
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me R. C.
Notebaert, to me known to be the person described in and who executed the
foregoing instrument, and such person duly acknowledged that such person
executed and delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of J. D. Ong)
                                       -------------------------------
                                       J. D. Ong
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me J. D.
Ong, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of A. B. Rand)
                                       ------------------------------
                                       A. B. Rand
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me A. B.
Rand, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public
<PAGE>
 


                               POWER OF ATTORNEY
                               -----------------


KNOW ALL MEN BY THESE PRESENTS:

     WHEREAS, AMERITECH CORPORATION, a Delaware corporation (the "Company"), and
Ameritech Capital Funding Corporation, a Delaware corporation ("Capital
Funding"), propose to file with the Securities and Exchange Commission, under
the provisions of the Securities Act of 1933, as amended, a Registration
Statement (the "Registration Statement") with respect to the registration of
$1,000,000,000 principal amount of debt securities of Capital Funding and the
guarantees of such debt securities by the Company; and

     WHEREAS, the undersigned is a Director of the Company:

     NOW, THEREFORE, the undersigned hereby constitutes and appoints R. H.
Brown, R. C. Notebaert, R. W. Pehlke and O. G. Shaffer, and each of them with
full power to act without the others, as attorneys for the undersigned as a
Director of the Company, with full power to act for and on behalf of the
undersigned in connection with, and to execute and file on behalf of the
undersigned, the Registration Statement, and any and all amendments or
supplements to the Registration Statement, hereby granting to said attorneys
full power and authority to do and perform every act and thing whatsoever
requisite, necessary or appropriate to be done as fully, to all intents and
purposes, as the undersigned might or could do if personally present at the
doing thereof, hereby ratifying and confirming all that said attorneys may or
shall do, or cause to be done, by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 15th day of March, 1995.

                                       (signature of J. A. Unruh)
                                       ------------------------------
                                       J. A. Unruh
 

STATE OF ILLINOIS   )
COUNTY OF COOK      )

     On the 15th day of March, 1995, personally appeared before me J. A.
Unruh, to me known to be the person described in and who executed the foregoing
instrument, and such person duly acknowledged that such person executed and
delivered the same for the purposes therein expressed.

     Witness my hand and official seal this 15th day of March, 1995.


                                       (signature of Judy L. Anker)
                                       ------------------------------
                                       Notary Public

<PAGE>
 
                                                                 Exhibit 25
                                                                 ----------


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM T-1

                           Statement of Eligibility
                     Under the Trust Indenture Act of 1939
                 of a Corporation Designated to Act as Trustee

                     Check if an Application to Determine
                 Eligibility of a Trustee Pursuant to Section
                           305(b)(2) _______________


                         HARRIS TRUST AND SAVINGS BANK
                               (Name of Trustee)

        Illinois                                            36-1194448
                                                         (I.R.S. Employer
(State of Incorporation)                                 Identification No.)

                111 West Monroe Street, Chicago, Illinois 60603
                   (Address of principal executive offices)


               Daniel G. Donovan, Harris Trust and Savings Bank,
               111 West Monroe Street, Chicago, Illinois, 60603
                                 312-461-2908
          (Name, address and telephone number for agent for service)


                     AMERITECH CAPITAL FUNDING CORPORATION
                               (Name of Obligor)

        Delaware                                            36-3675771
                                                         (I.R.S. Employer
(State of Incorporation)                                 Identification No.)

                            30 South Wacker Drive,
                           Chicago, Illinois  60606
                   (Address of principal executive offices)


                             AMERITECH CORPORATION
                              (Name of Guarantor)

        Delaware                                            36-33251481
                                                         (I.R.S. Employer
(State of Incorporation)                                 Identification No.)

                            30 South Wacker Drive,
                           Chicago, Illinois  60606
                   (Address of principal executive offices)


     Debt Securities to be issued by Ameritech Capital Funding Corporation
            Guarantees of Debt Securities by Ameritech Corporation
                        (Title of indenture securities)
<PAGE>
 



1.   GENERAL INFORMATION.  Furnish the following information as to the
     Trustee:

     (a)  Name and address of each examining or supervising authority to
          which it is subject.

            Commissioner of Banks and Trust Companies, State of Illinois,
            Springfield, Illinois; Chicago Clearing House Association, 164 West
            Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
            Corporation, Washington, D.C.; The Board of Governors of the Federal
            Reserve System, Washington, D.C.

     (b)  Whether it is authorized to exercise corporate trust powers.

            Harris Trust and Savings Bank is authorized to exercise corporate
            trust powers.

2.   AFFILIATIONS WITH OBLIGOR.  If the Obligor is an affiliate of the Trustee,
     describe each such affiliation.

            The Obligor is not an affiliate of the Trustee.

3. thru 15.

            NO RESPONSE NECESSARY

16.  LIST OF EXHIBITS.

     1. A copy of the articles of association of the Trustee is now in effect
        which includes the authority of the trustee to commence business and to
        exercise corporate trust powers.

        A copy of the Certificate of Merger dated April 1, 1972 between Harris
        Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
        constitutes the articles of association of the Trustee as now in effect
        and includes the authority of the Trustee to commence business and to
        exercise corporate trust powers was filed in connection with the
        Registration Statement of Louisville Gas and Electric Company, File No.
        2-44295, and is incorporated herein by reference.

     2. A copy of the existing By-Laws of the Trustee.

        A copy of the existing By-Laws of the Trustee was filed in connection
        with the Registration Statement of Hillenbrand Industries, Inc., File
        No. 33-44086, and is incorporated herein by reference.

     3. The consents of the Trustee required by Section 321(b) of the Act.

(included as Exhibit A on page 2 of this statement)

     4. A copy of the latest report of condition of the Trustee published
        pursuant to law or the requirements of its supervising or examining
        authority.

(included as Exhibit B on page 3 of this statement)

                                       1
<PAGE>
 



                                   SIGNATURE


Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 7th day of June, 1995.

HARRIS TRUST AND SAVINGS BANK


By:     D.G. DONOVAN
     ---------------------------
        D.G. DONOVAN
        ASSISTANT VICE PRESIDENT


EXHIBIT A

The consents of the trustee required by Section 321(b) of the Act.

Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.

HARRIS TRUST AND SAVINGS BANK


By:     D.G. DONOVAN
     ---------------------------
        D.G. DONOVAN
        ASSISTANT VICE PRESIDENT



                                       2
<PAGE>
 


                                   EXHIBIT B

Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of December 31, 1994, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.

                              [LOGO]  HARRIS BANK

                         Harris Trust and Savings Bank
                            111 West Monroe Street
                           Chicago, Illinois  60603

of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on December 31, 1994, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.

                        Bank's Transit Number 71000288
<TABLE>
<CAPTION>
                                                                                         THOUSANDS
                 ASSETS                                                                  OF DOLLARS
<S>                                                                            <C>               <C>
Cash and balances due from depository institutions:
      Non-interest bearing balances and currency and coin..................                         $1,226,753
      Interest bearing balances............................................                           $732,083
Securities:................................................................
a.  Held-to-maturity securities                                                                       $718,072
b.  Available-for-sale securities                                                                   $1,795,896
Federal funds sold and securities purchased under agreements to resell in
  domestic offices of the bank and of its Edge and Agreement
  subsidiaries, and in IBF's:
      Federal funds sold...................................................                           $374,200
      Securities purchased under agreements to resell......................                             $9,831
Loans and lease financing receivables:
      Loans and leases, net of unearned income.............................     $6,371,039
      LESS:  Allowance for loan and lease losses...........................        $90,492
                                                                                ----------
      Loans and leases, net of unearned income, allowance, and reserve
      (item 4.a minus 4.b).................................................                         $6,280,547
Assets held in trading accounts............................................                           $169,830
Premises and fixed assets (including capitalized leases)...................                           $136,703
Other real estate owned....................................................                             $1,780
Investments in unconsolidated subsidiaries and associated companies........                                $37
Customer's liability to this bank on acceptances outstanding...............                            $69,447
Intangible assets..........................................................                            $24,851
Other assets...............................................................                           $403,300
                                                                                                   -----------
TOTAL ASSETS                                                                                       $11,944,330
                                                                                                   ===========
 
                 LIABILITIES
Deposits:
  In domestic offices......................................................                         $4,529,148
    Non-interest bearing...................................................     $2,659,945
    Interest bearing.......................................................     $1,869,203
  In foreign offices, Edge and Agreement subsidiaries, and IBS's...........                         $2,486,418
    Non-interest bearing...................................................        $31,903
    Interest bearing.......................................................     $2,454,515
</TABLE> 
                                       3
<PAGE>
 
<TABLE>
<S>                                                                                              <C>
Federal funds purchased and securities sold under agreements to repurchase in domestic
domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
    Federal funds purchased............................................................             $1,179,441
    Securities sold under agreements to repurchase.....................................             $1,643,381
Trading Liabilities                                                                                   $149,363
Other borrowed money:..................................................................
a.  With original maturity of one year or less                                                        $667,231
b.  With original maturity of more than one year                                                       $14,268
Bank's liability on acceptances executed and outstanding                                               $69,447
Subordinated notes and debentures......................................................               $235,000
Other liabilities......................................................................               $240,902
                                                                                                   -----------
TOTAL LIABILITIES                                                                                  $11,214,599
                                                                                                   ===========
 
                 EQUITY CAPITAL
Common stock...........................................................................               $100,000
Surplus................................................................................               $275,000
a.  Undivided profits and capital reserves.............................................               $375,032
b.  Net unrealized holding gains (losses) on available-for-sale securities                            ($20,301)
                                                                                                   -----------
TOTAL EQUITY CAPITAL                                                                                  $729,731
                                                                                                   =========== 
Total liabilities, limited-life preferred stock, and equity capital....................            $11,944,330
                                                                                                   ===========
</TABLE> 
 

  I, Paul Skubic, Controller of the above-named bank, do hereby declare that
this Report of Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true to
the best of my knowledge and belief.

                                  PAUL SKUBIC
                                    1/27/95

  We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.

          DONALD S. HUNT,
          RICHARD E. TERRY,
          JAMES J. GLASSER,
                                                                   Directors.


                                       4


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission