As filed with the Securities and Exchange Commission on December 16, 1994
Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SOUTHWESTERN BELL CAPITAL SOUTHWESTERN BELL
CORPORATION CORPORATION
175 E. Houston Street 175 E. Houston Street
San Antonio, Texas 78205-2233 San Antonio, Texas 78205-2233
TELEPHONE NUMBER (210) TELEPHONE NUMBER (210)
351-3888 821-4105
As Issuer and Registrant As Issuer and Registrant of
of Debt Securities Securities and
Obligations Pursuant to the
Support Agreement
A DELAWARE CORPORATION A DELAWARE CORPORATION
I.R.S. EMPLOYER NO. I.R.S. EMPLOYER NO.
43-1420172 43-1301883
AGENT FOR SERVICE: AGENT FOR SERVICE:
ROGER W. WOHLERT JUDITH SAHM
SOUTHWESTERN BELL CAPITAL SOUTHWESTERN BELL
CORPORATION CORPORATION
175 E. HOUSTON STREET, 175 E. HOUSTON STREET,
12th Floor 11th Floor
SAN ANTONIO, TEXAS 78205-2233 SAN ANTONIO, TEXAS 78205-2233
PLEASE SEND ALL COPIES OF ALL COMMUNICATIONS TO:
WAYNE WIRTZ JOHN T. BOSTELMAN
SOUTHWESTERN BELL CORPORATION SULLIVAN & CROMWELL
175 E. HOUSTON STREET 250 PARK AVENUE
SAN ANTONIO, TEXAS 78205-2233 NEW YORK, NEW YORK 10177
(210) 821-4105 (212) 558-4000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: From time to time after the effective date of this
Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to the 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]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
TITLE OF EACH MAXIMUM
CLASS OF AMOUNT OFFERING PROPOSED AMOUNT OF
SECURITIES TO TO BE PRICE MAXIMUM AGGREGATE REGISTRATION
BE REGISTERED REGISTERED PER UNIT OFFERING PRICE(1) FEE
<S> <C> <C> <C> <C>
Debt Securities(2). . .
Preferred Stock(3). . .
Depositary Shares
representing
Preferred Stock(4). . .} (8) (8) } U.S.$3,000,000,000(9) } U.S.$1,034,490
Common Stock(5)(6). . .
Support Obligations(2).
<FN>
(1) In United States dollars or the equivalent thereof in any other
currency, currency unit or units, or composite currency or
currencies. Such amount represents the maximum aggregate
offering price to the public of the securities offered hereby.
(2) Such indeterminate amount of Debt Securities as may from time to
time be issued by Southwestern Bell Corporation ("SBC" or the
"Corporation") or by Southwestern Bell Capital Corporation
("Capital").
(3) Such indeterminate number of shares of Preferred Stock as may
from time to time be issued by SBC at indeterminate prices or
issuable upon conversion of Debt Securities or other Preferred
Stock.
(4) To be evidenced by Depositary Receipts and representing an
interest in all or a specified portion of a share of Preferred
Stock of SBC. In the event that SBC elects to offer to the
public fractional interests in shares of the Preferred Stock
registered hereunder, Depositary Receipts will be distributed
to the persons acquiring such fractional interests and the
shares of Preferred Stock will be issued to the Depositary
under the Deposit Agreement.
(5) Such indeterminate number of shares of Common Stock as may
from time to time be issued by SBC at indeterminate prices or
issuable upon conversion of Debt Securities or Preferred Stock.
(6) Includes rights to purchase Series A Junior Participating Preferred
Stock of SBC. Prior to the occurrence of certain events the rights
will not be exercisable or evidenced separately from the Common Stock.
(7) Support Obligations of SBC in respect of any Debt Securities issued
by Capital, and which will be included in the offering price of such
Debt Securities.
(8) The aggregate amount to be registered and the aggregate offering price
per unit have been omitted pursuant to Securities Act Release No. 6964.
The registration fee has been calculated on the basis of the maximum
offering price of all securities listed in accordance with Rule 457(o)
under the Securities Act of 1933.
(9) No separate consideration will be received for the Depositary Shares,
or for the Preferred Stock, Depositary Shares or Common Stock issuable
upon conversion of or in exchange for Debt Securities or Preferred Stock.
</TABLE>
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.
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<PAGE>
Subject to Completion, dated December 16, 1994
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.
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<PAGE>
PROSPECTUS
U.S. $3,000,000,000
SOUTHWESTERN BELL CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
SOUTHWESTERN BELL CAPITAL CORPORATION
DEBT SECURITIES
Southwestern Bell Corporation (the "Corporation" or
"SBC") may offer from time to time, together or separately,
(i) in one or more series, unsecured senior debentures, notes
or other obligations ("Debt Securities") of the Corporation,
any of which may be convertible or exchangeable into preferred
stock, par value $1.00 per share, of the Corporation ("Preferred
Stock"), Depositary Shares (as defined herein), common stock,
par value $1.00 per share, of the Corporation ("Common Stock"),
or equity securities of another issuer; (ii) Preferred Stock,
which may be convertible or exchangeable into other Preferred
Stock (including Depositary Shares), Common Stock or equity
securities of another issuer; (iii) Depositary Shares; and
(iv) Common Stock. The Debt Securities, Common Stock, Preferred
Stock and Depositary Shares are collectively referred to herein
as the "Securities". The Corporation may issue Securities for
proceeds up to an aggregate of not more than U.S. $3,000,000,000
or the equivalent thereof in one or more currencies or currency
units on terms to be determined at the time such Securities are
offered for sale. As used herein, Securities shall include
securities denominated in U.S. dollars or, at the option of the
Corporation and if so specified in the applicable Prospectus
Supplement, in any other currency, including composite currencies
such as the European Currency Unit. The Debt Securities will be
unsecured and will rank equally with all other unsubordinated and
unsecured indebtedness and certain other obligations of the
Corporation.
When a particular series of Securities is offered, a
prospectus supplement ("Prospectus Supplement") together with
this Prospectus will be delivered setting forth the terms of
such Securities, including, where applicable, (i) with regard
to Debt Securities, the specific designation, aggregate principal
amount, currency or currencies in which the principal, premium,
if any, and interest are payable, denominations, maturity, rate
or rates of any interest, any index, price or formula to be used
for determining the amount of any payment of principal, premium,
if any, or interest, any interest payment dates, whether the
Securities are issuable in registered form, in bearer form, or
in the form of one or more global securities or a combination
thereof, any redemption provisions, terms, if any, for conversion
or exchange into other securities, any listing on a securities
exchange, the initial public offering price, methods of
distribution and any other specific terms in connection with the
offering and sale of such Securities; (ii) with regard to
Preferred Stock, the specific designation, number of shares,
title, stated value and liquidation preference of each share,
dividend rate or method of calculation, dividend periods,
dividend payment dates, any redemption or sinking fund provision,
any conversion or exchange provisions, whether fractional
interests in shares of Preferred Stock will be offered through
depositary arrangements, any listing on a securities exchange,
the initial public offering price, methods of distribution and
any other specific terms in connection with the offering and
sale of such Securities; (iii) with regard to Depositary Shares,
the fraction of a share of Preferred Stock which each such
Depositary Share will represent; and (iv) with regard to Common
Stock, the number of shares offered, methods of distribution
and the initial public offering price.
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Southwestern Bell Capital Corporation ("Capital"), a
wholly owned subsidiary of SBC, may also offer from time to
time, together or separately, in one or more series, Debt
Securities of Capital. Any such Debt Securities may be issued
in such amounts and otherwise having any of the terms
specified herein for Debt Securities of the Corporation,
except that Debt Securities of Capital will not be convertible
or exchangeable. Any Debt Securities issued by Capital will
also be entitled to the benefits of a Support Agreement of SBC
as described herein (the "Support Obligations"). Unless
otherwise stated, the term "Securities" also includes Debt
Securities of Capital and related Support Obligations of SBC.
The Corporation's Common Stock is listed on the New
York Stock Exchange, the Chicago Stock Exchange and the
Pacific Stock Exchange. Any Common Stock offered will be
listed, subject to notice of issuance, on such exchanges.
The Corporation or Capital may sell Securities to or
through underwriters, and may also sell Securities directly to
other purchasers or through agents. If any underwriters,
dealers or agents are involved in the sale of Securities in
respect of which this Prospectus is being delivered, the names
of such underwriters, dealers or agents, any compensation to
such underwriters, dealers or agents will be set forth in the
applicable Prospectus Supplement. See "Plan of Distribution."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1994.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE CORPORATION SINCE THE DATE HEREOF OR THEREOF. THIS
PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.
AVAILABLE INFORMATION
The Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934 ("Exchange
Act") and in accordance therewith files reports and other
information with the Securities and Exchange Commission
("SEC"). Such reports and other information filed by the
Corporation can be inspected and copied at the public
reference facilities of the SEC, Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549, as well as at
the following SEC Regional Offices: 7 World Trade Center,
Suite 1300, New York, NY 10048; Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, IL 60661-2511; and 5670
Wilshire Blvd., 11th Floor, Los Angeles, CA 90036-3648.
Copies can be obtained from the SEC by mail at prescribed
rates. Requests should be directed to the SEC's Public
Reference Section, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, DC 20549. Such material can also be
inspected at the New York Stock Exchange, 20 Broad Street, New
York, NY 10005, on which the Corporation's common stock is
traded.
Capital has been advised by the SEC in a No-Action
Letter that separate financial information regarding Capital
need not be included in any registration statement on Form S-3
filed by Capital and the Corporation with respect to Debt
Securities issued by Capital and the Support Agreement. The
SEC also stated in such No-Action Letter that it will not
raise any objection if Capital does not file periodic reports
pursuant to Sections 13 and 15(d) of the Exchange Act.
The Corporation and Capital have filed with the SEC
a Registration Statement on Form S-3 (together with all
amendments and exhibits thereto, the "Registration Statement")
under the Securities Act of 1933, as amended ("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 SEC. For further information, reference is
made to the Registration Statement.
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INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by SBC with
the SEC (File No. 1-8610) and are hereby incorporated herein
by reference:
(1) SBC's Annual Report on Form 10-K for the year ended
December 31, 1993;
(2) SBC's Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30,
1994; and
(3) SBC's Current Reports on Form 8-K dated March 15,
1994, April 5, 1994 and May 19, 1994.
ALL DOCUMENTS FILED BY SBC 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
SECURITIES SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN
THIS PROSPECTUS AND TO BE 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.
Copies of the above documents (other than exhibits
to such documents) may be obtained upon request without charge
from SBC's Specialist--External Reporting, Southwestern Bell
Corporation, 175 E. Houston Street, San Antonio, Texas 78205-
2233 (telephone number (210) 351-3049).
SOUTHWESTERN BELL CORPORATION
The Corporation is a communications holding company
whose subsidiaries are engaged principally in communications
services. The Corporation has several subsidiaries, which
include: Southwestern Bell Telephone Company ("Telephone
Company"), Southwestern Bell Mobile Systems, Inc. ("Mobile
Systems"), SBC International, Inc. ("SBC International"),
Southwestern Bell Yellow Pages, Inc. ("Yellow Pages") and
Southwestern Bell Telecommunications, Inc. ("Telecom"). The
Telephone Company provides telephone services in the states of
Arkansas, Kansas, Missouri, Oklahoma and Texas (five-state
area) and is the Corporation's largest subsidiary, accounting
for approximately 71 percent of the Corporation's 1993 income
before extraordinary loss and cumulative effect of changes in
accounting principles; Mobile Systems principally provides
wireless communication services; SBC International is a
holding company owning interests in directory, cable
television and telecommunications businesses in Australia,
Israel, Mexico and the United Kingdom; Yellow Pages engages
principally in the sale of advertising for and publication of
Yellow Pages and White Pages directories and in other
directory-related activities; and Telecom is engaged in the
sale of customer premises and private business exchange
equipment.
The Corporation was incorporated under the laws of
the State of Delaware in 1983 by AT&T as one of seven regional
holding companies formed to hold AT&T's local telephone
companies. AT&T divested the Corporation by means of a
spin-off of stock to its shareowners on January 1, 1984
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(the "divestiture"). The divestiture was made pursuant to a
consent decree, referred to as the Modification of Final
Judgment, issued by the United States District Court for the
District of Columbia.
Capital is a wholly owned finance subsidiary of the
Corporation and was incorporated in 1986 under the laws of the
State of Delaware. Capital is engaged principally in issuing
debt securities and lending the proceeds to the Corporation
and to certain subsidiaries of the Corporation other than the
Telephone Company.
Capital and SBC have entered into a Support
Agreement, dated as of November 10, 1986, in which SBC has
agreed, among other things, to ensure the timely payment of
principal, premium, if any, and interest owed on any debt
securities, including Debt Securities, and certain other
obligations issued by Capital ("Debt"), with the limitation
that no Holder of Debt Securities issued by Capital or other
entity to which Capital Corporation owes any Debt will have
recourse to or against the stock or assets of the Telephone
Company or any interest of SBC or Capital in the Telephone
Company. See "Description of Debt Securities -- Support
Obligations."
The principal office of Capital is located at 175 E.
Houston Street, San Antonio, Texas 78205-2233 (telephone
number (210) 351-3888).
SBC's principal executive offices are located at 175
E. Houston Street, San Antonio, Texas 78205-2233 (telephone
number (210) 821-4105).
USE OF PROCEEDS
Unless otherwise specified in a Prospectus
Supplement, the net proceeds from the sale of the Securities
by the Corporation or Capital are intended to be used to
provide funds in connection with the repayment of long and
short-term debt of Capital or the Corporation, if any, to
provide funds for the diversification of the Corporation's
activities, to provide funds for certain subsidiaries of the
Corporation other than the Telephone Company, and to provide
funds for the general corporate purposes of the Corporation.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings
to fixed charges of SBC for the periods indicated. At
September 30, 1994, no preferred stock was outstanding.
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
1994 1993 1993 1992 1991 1990 1989
5.44 4.40 4.51 3.96 3.53 3.69 3.52
For the purpose of calculating this ratio, earnings
consist of income before income taxes, extraordinary loss,
cumulative effect of changes in accounting principles, and
fixed charges. Fixed
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charges include interest on indebtedness and one-third of rental expense
(the portion of rentals representative of the interest factor).
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities of any series
to which any Prospectus Supplement may relate. The particular terms and
provisions of the series of Debt Securities offered by a Prospectus
Supplement, 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 series of Debt Securities.
The Debt Securities of the Corporation are to be issued under an
Indenture dated as of November 1, 1994 (the "SBC Indenture"), between the
Corporation and The Bank of New York, as trustee ("Trustee"). The Debt
Securities of Capital are to be issued under an Indenture dated as of
February 1, 1987, as supplemented by the First Supplemental Indenture,
dated as of October 1, 1990, among Capital, the Corporation, and the
Trustee (together, the "Capital Indenture" and, together with the SBC
Indenture, the "Indentures"). Copies of the Indentures have been filed
as exhibits to the Registration Statement of which this Prospectus is a
part. The following summaries of certain provisions of the Debt Securities
and the Indentures do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Indentures, including the definitions therein of certain terms. Particular
sections of the Indentures which are relevant to the discussion are cited
parenthetically. Wherever particular sections or defined terms of the
Indentures are referred to, it is intended that such sections or defined
terms shall be incorporated herein by reference. "Principal" when used
herein includes, when appropriate, the premium, if any, on the Debt
Securities.
GENERAL
The Indentures do not limit the amount of Debt Securities which
may be issued thereunder, and additional debt securities may be issued
thereunder up to the aggregate principal amount which may be authorized
from time to time by, or pursuant to, a resolution of the Board of
Directors of the Corporation or Capital, as the case may be. Reference
is made to the Prospectus Supplement for the following terms of the
particular series of Debt Securities being offered hereby: (i) the title
of the Debt Securities of the series; (ii) if other than U.S. dollars,
the currency or currencies (which may include composite currencies such
as the European Currency Unit) of payment of principal of and interest
on the Debt Securities of the series; (iii) any limit upon the aggregate
principal amount of the Debt Securities of the series; (iv) the date or
dates on which the principal of the Debt Securities of the series is
payable; (v) the rate or rates (or manner of calculation thereof) at
which the Debt Securities of the series will bear interest, if any, the
date or dates from which any such interest will accrue and on which such
interest will be payable, and, with respect to Debt Securities of the
series in registered form, the record date for the interest payable on
any interest payment date and the extent to which, or the manner in which,
any interest payable on a global security on an interest payment date will
be paid if other than in the manner described under "Global Securities";
(vi) the place or places where the principal of and interest on the
Debt Securities of the series will be payable; (vii) any redemption or
sinking fund provisions; (viii) if in other than denominations of $1,000
and any integral multiple thereof, the denominations in which Debt
Securities of the series shall be issuable; (ix) if other than the
principal amount thereof, the portion of the principal amount of Debt
Securities of the series which will be payable upon declaration of
acceleration of the maturity thereof; (x) whether the Debt Securities of
the series will be issuable in
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registered or bearer form or both, whether any such Debt Securities are
to be issuable initially in temporary global form and whether any such
Debt Securities are to be issuable in permanent global form with or without
coupons and, if so, whether beneficial owners of interests in any such
permanent global Debt Security may exchange such interests for Debt
Securities of like tenor of any authorized form and denomination and the
circumstances under which any such exchange may occur, any restrictions
applicable to the offer, sale or delivery of Debt Securities in bearer
form ("bearer the offer, sale or delivery of Debt Securities in bearer
Debt Securities") and whether, and the terms upon which, bearer Debt
Securities will be exchangeable for Debt Securities in registered form
("registered Debt Securities") and vice versa; (xi) whether and under
what circumstances the Corporation or Capital will pay additional amounts
on the Debt Securities of the series held by a person who is not a U.S.
person (as defined below) in respect of taxes or similar charges withheld
or deducted and, if so, whether the Corporation or Capital will have the
option to redeem such Debt Securities rather than pay such additional
amounts; (xii) any index, price or formula used to determine the amount
of payments of principal of, premium, if any, and interest on the Debt
Securities of the series; (xiii) in the case of Debt Securities of the
Corporation, the terms, if any, upon which the Debt Securities may be
convertible into or exchanged for Common Stock or Preferred Stock (which
may be represented by Depositary Shares) of the Corporation or for
equity securities of another issuer and the terms and conditions upon
which such conversion or exchange will be effected, including the initial
conversion or exchange price or rate, the conversion or exchange period
and any other provision in addition to or in lieu of those described
herein; and (xiv) any additional provisions or other special terms not
inconsistent with the provisions of the Indentures, including any terms
which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Debt
Securities of such series. (Sections 2.01 and 2.02.)
Each series of Debt Securities will constitute unsecured and
unsubordinated indebtedness of the issuer thereof and will rank on a
parity with the issuer's other unsecured and unsubordinated indebtedness
and, in the case of Debt Securities of the Corporation, on a parity with
the Support Obligations.
Debt Securities of any series may be issued as registered Debt
Securities or bearer Debt Securities or both, or in the form of one or
more global securities, as specified in the terms of the series. Unless
otherwise indicated in the Prospectus Supplement, Debt Securities will be
issued in denominations of U.S. $1,000 and integral multiples thereof.
Bearer Debt Securities will be offered, sold and delivered only outside
the United States to non-U.S. persons and to offices located outside the
United States of certain U.S. financial institutions. For purposes of
this Prospectus, "United States" or "U.S." means the United States of
America, including the states and the District of Columbia, its
territories, its possessions and all other areas subject to its
jurisdiction. "U.S. person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or a political subdivision
thereof, or an estate or trust the income of which is subject to United
States Federal income taxation regardless of its source.
Particular restrictions on the offer, sale and delivery of
bearer Debt Securities and any special federal income tax considerations
applicable to bearer Debt Securities will be described in the Prospectus
Supplement relating thereto.
Except as set forth in an applicable Prospectus Supplement,
interest on bearer Debt Securities will be payable only upon presentation
and surrender of the coupons for the interest installments evidenced
thereby as they mature at a paying agency of the Corporation located
outside of the United States. (Section 2.05(c).) The Corporation or
Capital will maintain such an agency for a
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period of two years after the principal of such bearer Debt Securities
has become due and payable. During any period thereafter for which it
is necessary in order to conform to United States tax law or regulations,
the Corporation or Capital will maintain a paying agent outside the
United States to which the bearer Debt Securities may be presented for
payment and will provide the necessary funds therefor to such paying agent
upon reasonable notice. (Section 2.04.) No payment with respect to any
bearer Debt Securities will be made at any office or agency in the United
States or by check mailed in or to an address in the United States or by
transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payments on bearer Debt Securities
denominated and payable in U.S. dollars will be made in the United States
if (but only if) payment of the full amount thereof in U.S. dollars at
each office of each paying agent outside the United States appointed and
maintained by the Corporation is illegal or effectively precluded by
exchange controls or other similar restrictions. (Section 2.05.)
Registration of transfer of registered Debt Securities may be
requested upon surrender thereof at an agency of the Corporation or
Capital maintained for such purpose ("Registrar") and upon fulfillment
of all other requirements of such Registrar. (Section 2.08(a).) Bearer
Debt Securities and the coupons related thereto will be transferable by
delivery. (Section 2.08(e).)
Debt Securities may be issued under the Indentures as Original
Issue Discount Securities to be offered and sold at a substantial
discount from the principal amount thereof. Special federal income tax,
accounting and other considerations applicable thereto will be described
in the Prospectus Supplement relating to such Original Issue Discount
Securities. "Original Issue Discount Security" means any Debt Security
which provides for an amount less than the stated principal amount
thereof to be due and payable upon declaration of acceleration of the
maturity thereof upon the occurrence of an event of default and the
continuation thereof. (Section 1.01.)
Unless otherwise indicated in an applicable Prospectus Supplement,
payment of principal of and any premium and interest on registered Debt
Securities (other than a global security) will be made at the office of
such paying agent or paying agents as the Corporation or Capital may
designate from time to time, except that, at the option of the Corporation
or Capital, payment of any interest may be made (i) by check mailed to the
address of the payee entitled thereto or (ii) by wire transfer to an account
maintained by such payee. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of any installment of interest on registered
Debt Securities will be made to the person in whose name such registered
Debt Security is registered at the close of business on the record date for
such interest payment.
If the purchase price of any of the Debt Securities is denominated
in other than U.S. dollars or if the principal of and any premium and
interest on any series of Debt Securities is payable in other than U.S.
dollars, then the restrictions, elections, general tax considerations,
specific terms and other information with respect to such issue of Debt
Securities and such currency or currencies will be set forth in the
applicable Prospectus Supplement.
BOOK-ENTRY 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 Depository (the "Depository") identified in the Prospectus
Supplement relating to such series. The specific terms of the Depository
arrangement with respect to any Debt Securities of a series will be described
in the Prospectus
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<PAGE> 9
Supplement relating to such series. The Corporation and Capital each
anticipates that the following provisions will apply to all Depository
arrangements for registered Debt Securities issued by it.
Unless otherwise specified in an applicable Prospectus
Supplement, Debt Securities which are to be represented by a global
security to be deposited with or on behalf of a Depository will be
represented by a global security registered in the name of such
Depository or its nominee. Upon issuance of a global security in
registered form, the Depository of such global security will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such global security to the
accounts of institutions that have accounts with such Depository or its
nominee ("participants"). The accounts to be credited shall be designated
by the underwriters or agents of such Debt Securities, or by the Corporation
or Capital if such Debt Securities are offered and sold directly by the
Corporation or Capital. Ownership of beneficial interests in a global
security will be limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in such global
securities will be shown on, and the transfer of that ownership will be
effected only through records maintained by the Depository (with respect to
participants' interests) or its nominee for such global security or by
participants or persons that hold through participants. The laws of some
jurisdictions require that certain purchasers of Debt Securities take
physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in a global security.
So long as the Depository for a global security in registered
form, 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 Indentures. Except as set forth below,
owners of beneficial interests in such global securities will not be
entitled to have Debt Securities of the series represented by such global
security registered in their names, will not receive or be entitled to
receive physical delivery of Debt Securities of such series in definitive
form and will not be considered the owners or holders thereof under the
Indentures.
Principal, premium, if any, and interest payments on Debt
Securities registered in the name of or held by a Depository or its
nominee will be made to the Depository or its nominee, as the case may
be, as the registered owner or the holder of the global security
representing such Debt Securities. Neither the Corporation, Capital,
the Trustee, or any paying agent 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 in a global
security for such Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Corporation and Capital each expects that the Depository for
Debt Securities of a series, upon receipt of any payments of principal,
premium, if any, or interest in respect of a global security, will credit
immediately the accounts of the related participants with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of such global security as shown on the records of such
Depository. The Corporation and Capital each 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.
Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form in accordance with the terms of the Debt
Securities, a global security 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
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<PAGE> 10
such nominee to a successor of such Depository or a nominee of
such successor Depository. If a Depository for Debt Securities
notifies the Corporation or Capital that it is unwilling or
unable to continue as depository for such global security or if
at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and a successor Depository is
not appointed by the Corporation or Capital within 90 days, the
Corporation or Capital will issue Debt Securities in definitive
registered form in exchange for the global security representing
such Debt Securities. In addition, the Corporation or Capital
may at any time and in its sole discretion determine not to have
any Debt Securities in registered form represented by one or more
global securities and, in such event, will issue Debt Securities
in definitive registered form in exchange for all global
securities representing such Debt Securities. Further, if an
event of default, or an event which, with the giving of notice
or lapse of time, or both, would constitute an event of default,
under the Indentures occurs and is continuing with respect to the
debt Securities of a series, or if the Corporation or Capital so
specifies with respect to the Debt Securities of a series, the
Depository may exchange a global security representing Debt
Securities of such series for Debt Securities of such series in
definitive registered 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.
EXCHANGE OF SECURITIES
Registered Debt Securities in definitive form may be
exchanged for an equal aggregate principal amount of registered
Debt Securities of the same series and date of maturity in such
authorized denominations as may be requested upon surrender of
the registered Debt Securities to the Registrar and upon fulfillment
of all other requirements of such Registrar. (Section 2.08(a).)
To the extent permitted by the terms of a series of
Debt Securities authorized to be issued in registered form and
bearer form, bearer Debt Securities in definitive form may be
exchanged for an equal aggregate principal amount of registered
or bearer Debt Securities of the same series and date of maturity
in such authorized denominations as may be requested upon
surrender of the bearer Debt Securities with all unpaid coupons
relating thereto (except as may otherwise be provided in the Debt
Securities) to the Registrar (or a paying agent if the exchange is
for bearer securities) and upon fulfillment of all other
requirements of the Registrar (or such paying agent). (Section
2.08(b).) Registered Debt Securities may not be exchanged for
bearer Debt Securities.
LIENS ON ASSETS
The Indentures do not restrict the Corporation or
Capital from pledging or otherwise encumbering any of its
assets, including, in the case of the Corporation, the stock
of the Telephone Company and its right to dividends paid
thereon.
SUCCESSOR ENTITY
Neither the Corporation nor, if it issues the Debt
Securities, Capital may consolidate with or merge into, or be
merged into, or transfer or lease its property and assets
substantially as an entirety to, another entity unless the
successor entity is a U.S. corporation, in the case of the
Corporation, and assumes all the obligations of the Corporation
under the Debt Securities and any coupons related thereto or
the Support Obligation, as the case may be, and the relevant
Indenture and, in the case of Capital, assumes all the
obligations of Capital under the Debt Securities and any
coupons related thereto, and the
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<PAGE> 11
Capital Indenture. Thereafter, except in the case of a lease, all such
obligations of the Corporation under the Debt Securities or the Support
Obligations, as the case may be, and such Indenture, and of Capital
under the Debt Securities and the Capital Indenture shall terminate.
(Sections 5.01 and 5.02.)
EVENTS OF DEFAULT
The following events are defined in the Indentures as "Events
of Default" with respect to a series of Debt Securities: (i) default
in the payment of interest on any Debt Security of such series when
the same becomes due and payable and continues for 90 days; (ii) default
in the payment of the principal of any Debt Security of such series
when the same becomes due and payable at maturity, upon redemption, or
otherwise; (iii) failure by the Corporation or, in the case of Debt
Securities issued by Capital, failure by Capital for 90 days after
notice to it to comply with any of its other agreements in the Debt
Securities of such series, in the related Indenture, in any
supplemental indenture under which the Debt Securities of that series
may have been issued (other than covenants relating only to other
series); and (iv) certain events of bankruptcy or insolvency of the
Corporation or, in the case of Debt Securities issued by Capital, of
Capital. (Section 6.01.) If an Event of Default occurs with
respect to the Debt Securities of any series and is continuing, the
Trustee or the Holders of at least 25 percent in principal amount of
all of the outstanding Debt Securities of that series may declare the
principal (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of, and any accrued interest on,
all the Debt Securities of that series to be due and payable. Upon such
declaration, such principal (or, in the case of Original Issue Discount
Securities, such specified amount) and any accrued interest will become
due and payable immediately. (Section 6.02.)
Debt Securityholders may not enforce the Debt Securities or
related Indenture, except as provided in such Indenture. (Section 6.06.)
The Trustee may require indemnity satisfactory to it before it enforces
the Debt Securities or related Indenture. (Section 7.07.) Subject to
certain limitations, holders of a majority in principal amount of the
Debt Securities of each series affected may direct the Trustee in its
exercise of any trust power with respect to Debt Securities of that
series. (Section 6.05.) The Trustee may withhold from Debt
Securityholders notice of any continuing default (except a default in
payment of principal, premium, if any, or interest) if it determines
that withholding notice is in their interests. (Section 7.05.)
AMENDMENT AND WAIVER
Subject to certain exceptions, the SBC Indenture or the Debt
Securities issued thereunder may be amended or supplemented by the
Corporation and the Trustee, and the Capital Indenture or the Debt
Securities issued thereunder may be amended by Capital, the Corporation
or the Trustee, in each case with the written consent of the Holders
of a majority in principal amount of the outstanding Debt Securities of
each series affected by the amendment or supplement (with each such
series voting as a class), or compliance with any provision may be
waived with the consent of the Holders of a majority in principal
amount of the outstanding Debt Securities of each series affected by
such waiver (with each such series voting as a class). However,
without the consent of each Debt Securityholder affected, an amendment
or waiver may not (i) reduce the amount of Debt Securities whose
holders must consent to an amendment or waiver; (ii) reduce the rate
of or change the time for payment of interest on any Debt Security;
(iii) reduce the principal of, or change the fixed maturity of, any
Debt Security; (iv) waive a default in the payment of the principal
of or interest on any Debt Security; (v) make any Debt Security
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<PAGE> 12
payable in currency other than that stated in the Debt Security;
or (vi) impair the right to institute suit for the enforcement of
any payment on or with respect to any Debt Securities. (Section 9.02.)
Either Indenture may be amended or supplemented without the
consent of any holder of Debt Securities issued thereunder (i) to
cure any ambiguity, defect or inconsistency in such Indenture or in
such Debt Securities of any series; (ii) to provide for the assumption
of all the obligations of the Corporation under the Debt Securities
and any coupons related thereto or under the Support Obligations, as
the case may be, and the related Indenture and, in the case of the
Capital Indenture, the obligations of Capital under the Debt Securities
and any coupons related thereto and the Capital Indenture in connection
with a merger, consolidation or transfer or lease of the Corporation's
or Capital's property and assets substantially as an entirety as
provided for in such Indenture; (iii) to provide for the issuance of,
and establish the form, terms and conditions of, a series of Debt
Securities or to establish the form of any certifications required to
be furnished pursuant to the terms of such Indenture for any series
of Debt Securities; (iv) to secure the Debt Securities pursuant to
Section 4.02 of such Indenture; (v) to provide for uncertificated Debt
Securities in addition to or in place of certificated Debt Securities;
(vi) to add to rights of Debt Securityholders or surrender any right
or power conferred on the Corporation or Capital; or (vii) to make
any change that does not adversely affect the rights of any Debt
Securityholder. (Section 9.01.)
CONVERTIBLE AND EXCHANGEABLE DEBT SECURITIES
Certain Debt Securities issued by the Corporation (the
"Convertible Debt Securities") may be convertible into Preferred
Stock (including Depositary Shares) or Common Stock of the
Corporation and certain Debt Securities issued by the Corporation
("Exchangeable Debt Securities") may be exchangeable for equity
securities of another issuer. The holders of Convertible Debt
Securities of a specified series may be entitled or, if so provided
in the applicable Prospectus Supplement, may be required at such
time or times specified in the applicable Prospectus Supplement,
subject to prior redemption, repayment or repurchase, to convert any
Convertible Debt Securities of such series (in denominations set
forth in the applicable Prospectus Supplement) into Preferred Stock,
Depositary Shares or Common Stock, as the case may be (collectively,
the foregoing securities into which the Convertible Debt Securities
may convert are referred to herein as "Conversion Securities") at
the conversion price set forth in the applicable Prospectus
Supplement, subject to adjustment as described below, and in the
applicable Prospectus Supplement. The holders of Exchangeable Debt
Securities of a specified series may be entitled or, if so provided
in the applicable Prospectus Supplement, may be required at such
time or times specified in the applicable Prospectus Supplement,
subject to prior redemption, repayment or repurchase, to exchange
any Exchangeable Debt Securities of such series (in denominations
set forth in the applicable Prospectus Supplement) for specified
equity securities of another issuer described in the Prospectus
Supplement (collectively, the foregoing securities for which the
Exchangeable Debt Securities may be exchanged are referred to
herein as "Exchange Securities") at the exchange price set forth
in the applicable Prospectus Supplement, subject to adjustment
as described below, and in the applicable Prospectus Supplement.
The relevant provisions for each series of Convertible or
Exchangeable Debt Securities will be set forth in the applicable
Prospectus Supplement. Except as described below or in the
applicable Prospectus Supplement, no adjustment will be made
upon conversion of any Convertible Debt Securities or exchange
of any Exchangeable Debt Securities for interest accrued thereon
or for dividends on any Conversion or Exchange Securities issued
or delivered. If any Convertible or Exchangeable Debt Securities
not called for redemption are converted or exchanged between a
Regular Record Date for the payment of interest and the next
succeeding Interest Payment Date, such Convertible or Exchangeable
Debt Securities must be accompanied by funds equal to the interest
payable on such succeeding Interest
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Payment Date on the principal amount so converted or exchanged.
The Corporation is not required to issue fractional shares of
Preferred Stock, Depositary Shares or Common Stock upon conversion
of Convertible Debt Securities or deliver fractional shares of
Exchange Securities upon exchange of Exchangeable Securities,
respectively, and, in lieu thereof, will pay a cash adjustment, in
the case of Convertible Debt Securities convertible into Preferred
Stock or Depositary Shares, based upon the liquidation preference of
such series of Preferred Stock, in the case of Convertible Debt
Securities convertible into Common Stock, based upon the market
value of the Common Stock, and in the case of Exchangeable Debt
Securities, based upon the market value of the Exchange Securities,
unless otherwise specified in the Prospectus Supplement.
The conversion price for a series of Convertible Debt
Securities that are convertible into Common Stock and the exchange
price for Exchangeable Debt Securities are subject to adjustment
upon the occurrence of certain events under formulas that will be
set forth in the applicable Prospectus Supplement.
In the event of a taxable distribution to holders of
Common Stock or Preferred Stock or Exchange Securities (or other
transaction) which results in any adjustment of the conversion
price of Convertible Debt Securities or the exchange price of
Exchangeable Debt Securities, the holders of such Convertible or
Exchangeable Debt Securities may, in certain circumstances, be
deemed to have received a distribution subject to United States
Federal income tax as a dividend; in certain other circumstances,
the absence of such an adjustment may result in a taxable dividend
to the holders of Common Stock or Preferred Stock or Exchange
Securities acquired upon conversion or exchange of such Convertible
or Exchangeable Debt Securities.
SUPPORT OBLIGATIONS
Any Debt Securities issued by Capital will be entitled to
the benefits the Support Agreement (the "Support Agreement"), dated
as of November 10, 1986, between Capital and the Corporation. The
Support Agreement provides that (a) SBC will own all outstanding
voting capital stock of Capital throughout the term of the Support
Agreement, (b) SBC will cause Capital to maintain a positive tangible
net worth as determined in accordance with generally accepted
accounting principles, and (c) if Capital is unable to make timely
payment of principal of, or premium, if any, or interest on any Debt,
SBC will, at Capital's request, provide funds to Capital to make such
payments. The Support Agreement also provides that any Lender (as
defined below) to Capital shall have the right to demand that Capital
enforce its rights against SBC under the Support Agreement as described
in the previous sentence and in the event that Capital fails to require
SBC to perform such obligations or Capital defaults in the payment of
principal of or premium, if any, or interest on any Debt owed to a
Lender, such Lender may proceed directly against SBC to enforce Capital's
rights against SBC under the Support Agreement or to obtain payment of
such defaulted principal, premium, if any, or interest owed to such
Lender. The Support Agreement provides that in no event may any
Lender, on default of Capital or SBC or upon failure by Capital or SBC
to comply with the Support Agreement, have recourse to or against the
stock or assets of the Telephone Company or any interest of SBC or
Capital in the Telephone Company. Despite this limitation, the Support
Agreement provides that funds available to SBC to satisfy any
obligations under the Support Agreement will include dividends paid by
the Telephone Company to SBC. See "Ratio of Earnings to Fixed Charges."
The term "Lender" is defined in the Support Agreement as any person,
firm or corporation to which Capital is indebted for money borrowed or
to which Capital otherwise owes any Debt or which is acting as trustee
or authorized representative on behalf of such
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<PAGE> 14
person, firm or corporation. Lender includes the Holder of
any Debt Securities issued by Capital and the Trustee acting
on such Holder's behalf.
The Support Agreement may be amended or terminated
at any time by agreement of SBC and Capital, but no amendment
shall be entered into which adversely affects the rights of
creditors of Capital (Including Holders of Debt Securities
issued by Capital) and no termination shall be effective until
such time as all Debt (including the Debt Securities issued by
Capital) outstanding on the date of such amendment or
termination shall have been paid in full unless all such
creditors shall have consented to such amendment or
termination.
CONCERNING THE TRUSTEE
The Corporation and Capital maintain banking
relationships in the ordinary course of business with the
Trustee. The Trustee is also the trustee under an indenture
with the Telephone Company which may from time to time
represent a significant portion of the Corporation's
consolidated long-term debt.
DESCRIPTION OF PREFERRED STOCK
The summary of terms of the Preferred Stock
contained in this Prospectus does not purport to be complete
and is subject to, and qualified in its entirety by, the
provisions of the Corporation's Certificate of Incorporation
and By-Laws and the certificate of designations relating to
each series of the Preferred Stock (the "Certificate of
Designations"), which will be filed as an exhibit to or
incorporated by reference in the Registration Statement of
which this Prospectus is a part at or prior to the time of
issuance of such series of the Preferred Stock.
SBC's Restated Certificate of Incorporation
currently authorizes the issuance of 10,000,000 preferred
shares, par value $1.00 per share, issuable in series (the
"Preferred Stock"). SBC's Board of Directors is authorized to
approve the issuance of one or more series of Preferred Stock
and to fix the number of shares, the designations, the
relative rights and the limitations of any such series without
further authorization of the stockholders of the Corporation.
At October 31, 1994, no shares of Preferred Stock were
outstanding, but the Corporation has designated 4,000,000
shares of Preferred Stock as Series A Junior Participating
Preferred Stock issuable pursuant to a Rights Agreement (the
"Rights Agreement"). See "Description of Rights" and
"Description of Series A Preferred Stock".
Each series of the Preferred Stock shall have the
dividend, liquidation, redemption and voting rights provided
in the applicable Prospectus Supplement. The applicable
Prospectus Supplement will describe the following terms of the
series of Preferred Stock in respect of which this Prospectus
is being delivered: (i) the designation and stated value per
share of such Preferred Stock and the number of shares
offered; (ii) the amount of liquidation preference per share;
(iii) the initial public offering price at which such
Preferred Stock will be issued; (iv) the dividend rate (or
method of calculation), the dates on which dividends shall be
payable and the dates from which dividends shall commence to
cumulate, if any; (v) any redemption or sinking fund
provisions; (vi) any conversion or exchange rights;
(vii) whether the Corporation has elected to offer Depositary
Shares as described below under "Description of Depositary
Shares"; and (viii) any additional voting, dividend,
liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
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The holders of Preferred Stock will have no
preemptive rights. Preferred Stock, upon issuance against
full payment of the purchase price therefor, will be fully
paid and nonassessable. Neither the par value nor the
liquidation preference is indicative of the price at which the
Preferred Stock will actually trade on or after the date of
issuance. The applicable Prospectus Supplement will contain a
description of certain United States Federal income tax
consequences relating to the purchase and ownership of the
series of Preferred Stock offered by such Prospectus
Supplement.
As described under "Description of Depositary
Shares," the Corporation may, at its option, elect to offer
depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts"), each representing
a fractional interest (to be specified in the Prospectus
Supplement relating to the particular series of the Preferred
Stock) in a share of the particular series of the Preferred
Stock issued and deposited with a Depositary (as defined
below).
The transfer agent for each series of Preferred
Stock will be described in the applicable Prospectus
Supplement.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Corporation may, at its option, elect to offer
fractional shares of Preferred Stock, rather than full shares
of Preferred Stock. In the event such option is exercised,
the Corporation will issue to the public receipts for
Depositary Shares, each of which will represent a fraction (to
be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of a share of a
particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock
represented by Depositary Shares will be deposited under a
Deposit Agreement (the "Deposit Agreement") between the
Corporation and a bank or trust company selected by the
Corporation having its principal office in the United States
and having a combined capital and surplus of at least
$50,000,000 (the "Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be
entitled, in proportion to the applicable fraction of a share
of Preferred Stock represented by such Depositary Share, to
all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares will be evidenced by
Depositary Receipts issued pursuant to the Deposit Agreement.
Depositary Receipts will be distributed to those persons
purchasing the fractional shares of Preferred Stock in
accordance with the terms of the offering. Copies of the
forms of Deposit Agreement and Depositary Receipts will be
filed as exhibits to, or incorporated by reference in, the
Registration Statement of which this Prospectus is a part, and
the following summary is qualified in its entirety by
reference to such exhibits.
Pending the preparation of definitive engraved
Depositary Receipts, the Depositary may, upon the written
order of the Corporation, issue temporary Depositary Receipts
substantially identical to (and entitling the holders thereof
to all the rights pertaining to) the definitive Depositary
Receipts but not in definitive form. Definitive Depositary
Receipts will be prepared thereafter without unreasonable
delay, and temporary Depositary Receipts will be exchangeable
for definitive Depositary Receipts at the Corporation's
expense.
Upon surrender of Depositary Receipts at the
principal office of the Depositary (unless the related
Depositary Shares have previously been called for redemption),
the owner of the Depositary Shares evidenced thereby is
entitled to delivery at such office, to or upon his order, of
the number of whole shares of Preferred Stock and any money or
other property represented by such Depositary Shares. Partial
shares of Preferred Stock will not be issued. If the
Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary
Shares representing a number of whole shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares. Holders of shares of
Preferred Stock thus withdrawn will not thereafter be entitled
to deposit such shares under the Deposit Agreement or to
receive Depositary Shares therefor. The Corporation does not
expect that there will be any public trading market for
withdrawn shares of Preferred Stock.
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DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or
other cash distributions received in respect of the Preferred
Stock to the record holders of Depositary Shares relating to
such Preferred Stock in proportion to the numbers of such
Depositary Shares owned by such holders. The Depositary shall
distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a
fraction of one cent and any balance not so distributed shall
be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash,
the Depositary will distribute property received by it to the
record holders of Depositary Shares entitled thereto, unless
the Depositary determines that it is not feasible to make such
distribution, in which case the Depositary may, with the
approval of the Corporation, sell such property and distribute
the net proceeds from such sale to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock represented by
Depositary Shares is subject to redemption, the Depositary
Shares will be redeemed from the proceeds received by the
Depositary resulting from the redemption, in whole or in part,
of such series of Preferred Stock held by the Depositary. The
Depositary shall mail notice of redemption not less than 30
nor more than 60 days prior to the date fixed for redemption
to the record holders of the Depositary Shares to be so
redeemed at their respective addresses appearing in the
Depositary's books. The redemption price per Depositary Share
will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of the
Preferred Stock. Whenever the Corporation redeems shares of
Preferred Stock held by the Depositary, the Depositary will
redeem as of the same redemption date the number of Depositary
Shares representing shares of Preferred Stock so redeemed. If
less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or
pro rata as may be determined by the Depositary.
After the date fixed for redemption, the Depositary
Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary
Shares will cease, except the right to receive the monies
payable upon such redemption and any money or other property
to which the holders of such Depositary Shares were entitled
upon such redemption upon surrender to the Depositary of the
Depositary Receipts evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the
holders of the Preferred Stock are entitled to vote, the
Depositary will mail the information contained in such notice
of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same
date as the record date for the Preferred Stock) will be
entitled to instruct the Depositary as to the exercise of the
voting rights pertaining to the amount of the Preferred Stock
represented by such holder's Depositary Shares. The
Depositary will endeavor, insofar as practicable, to vote the
amount of the Preferred Stock represented by such Depositary
Shares in accordance with such instructions, and the
Corporation will agree to take all action which may be deemed
necessary by the Depositary in order to enable the Depositary
to do so. The Depositary will
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abstain from voting shares of the Preferred Stock to the extent
it does not receive specific instructions from the holders of
the Depositary Shares representing such Preferred Stock.
CONVERSION OR EXCHANGE
Whenever the Corporation converts all of the shares
of a particular series of Preferred Stock held by the Depositary
into other Preferred Stock or Common Stock or exchanges all such
shares for securities of another issuer, the Depositary will
convert or exchange as of the same date all Depositary Shares
representing the shares of the Preferred Stock so converted or
exchanged, provided that the Corporation shall have deposited
with the Depositary the other Preferred Stock, Common Stock or
other securities into or for which all such shares of Preferred
Stock are to be converted or exchanged. The exchange rate per
Depositary Share shall be equal to the exchange rate per share
of Preferred Stock multiplied by the fraction of a share of
Preferred Stock represented by one Depositary Share, plus all
money and other property, if any, represented by such Depositary
Shares, including all amounts paid by the Corporation in respect of
dividends which on the exchange date have accrued on the shares of
Preferred Stock to be so converted or exchanged and have not
theretofore been paid.
The Depositary Shares, as such, are not convertible or
exchangeable into other Preferred Stock, Common Stock, securities
of another issuer or any other securities or property of the
Corporation. Nevertheless, if so specified in the applicable
Prospectus Supplement, the Depositary Receipts may be surrendered
by holders thereof to the Depositary with written instructions to
the Depositary to instruct the Corporation to cause conversion of
the Preferred Stock represented by the Depositary Shares evidenced
by such receipts into other shares of Preferred Stock or Common
Stock of the Corporation or exchange of such Preferred Stock for
securities of another issuer, as the case may be, and the
Corporation has agreed that upon receipt of such instructions and
any amounts payable in respect thereof, it will cause the
conversion or exchange thereof utilizing the same procedures as
those provided for delivery of Preferred Stock to effect such
conversion or exchange. If the Depositary Shares represented by
a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary
Shares not to be converted or exchanged.
TAXATION
Owners of the Depositary Shares will be treated for
Federal income tax purposes as if they were owners of the series
of Preferred Stock represented by such Depositary Shares and,
accordingly, will be entitled to take into account for Federal
income tax purposes income and deductions to which they would
be entitled if they were holders of such series of Preferred
Stock. In addition, (i) no gain or loss will be recognized for
Federal income tax purposes upon the withdrawal of Preferred
Stock in exchange for Depositary Shares as provided in the
Deposit Agreement, (ii) the tax basis of each share of Preferred
Stock to an exchanging owner of Depositary Shares will, upon
such exchange, be the same as the aggregate tax basis of the
Depositary Shares exchanged therefor and (iii) the holding period
for shares of the Preferred Stock in the hands of an exchanging
owner of Depositary Shares who held such Depositary Shares as a
capital asset at the time of the exchange thereof for Preferred
Stock will include the period during which such person owned
such Depositary Shares.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary
Shares and any provision of the Deposit Agreement may at any time
be amended by agreement between the Corporation and the
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<PAGE> 19
Depositary. However, any amendment which materially and
adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved
by the holders of at least a majority of the Depositary Shares
then outstanding. The Deposit Agreement may be terminated by
the Corporation or the Depositary only if (i) all outstanding
Depositary Shares have been redeemed or (ii) there has been a
final distribution in respect of the Preferred Stock in
connection with any liquidation, dissolution or winding up of
the Corporation and such distribution has been distributed to
the holders of Depositary Receipts.
CHARGES OF DEPOSITARY
The Corporation will pay all transfer and other taxes
and governmental charges arising solely from the existence of
the depositary arrangements. The Corporation will pay charges
of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock.
Holders of Depositary Receipts will pay other transfer and other
taxes and governmental charges and such other charges as are
expressly provided in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary
Shares all reports and communications from the Corporation which
are delivered to the Depositary and which the Corporation is
required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Corporation will be
liable if it is prevented or delayed by law or any circumstance
beyond its control in performing its obligations under the
Deposit Agreement. The obligations of the Corporation and the
Depositary under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they
will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or information
provided by persons presenting Preferred Stock for deposit,
holders of Depositary Receipts or other persons believed to be
competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering
to the Corporation notice of its election to do so, and the
Corporation may at any time remove the Depositary, any such
resignation or removal to take effect upon the appointment of
a successor Depositary and its acceptance of such appointment.
Such successor Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and
must be a bank or trust company having its principal office in
the United States and having a combined capital and surplus of
at least $50,000,000.
DESCRIPTION OF COMMON STOCK
SBC's Restated Certificate of Incorporation
currently authorizes the issuance of 1,100,000,000 shares of
Common Stock. As of October 31, 1994, there were outstanding
599,654,873 shares of Common Stock (as well as 299,827,436.5
Rights to Purchase Series A Preferred Stock pursuant to the
Rights Agreement) (each as defined below). See "Description of
Rights".
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<PAGE> 20
The Common Stock is listed on the NYSE, the Chicago
Stock Exchange and the Pacific Stock Exchange under the symbol
"SBC".
The holders of Common Stock are entitled to participate
equally in dividends when and as such dividends are declared by
the SBC Board of Directors out of funds legally available therefor.
The holders of Common Stock are entitled to one vote for
each share held on all matters voted on by stockholders, including
election of directors. The holders of Common Stock do not have
any conversion, redemption, preemptive or cumulative voting rights.
In the event of the dissolution, liquidation or winding up of SBC,
holders of Common Stock are entitled to share ratably in any assets
remaining after the satisfaction in full of the prior rights of
creditors, including holders of SBC's indebtedness, and the
aggregate liquidation preference of any Preferred Stock then
outstanding.
All outstanding shares of Common Stock are, and any
shares of Common Stock offered hereby upon issuance will be,
fully paid and nonassessable.
The Bylaws of the Corporation provide that the Board
of Directors shall be divided into three classes each consisting
of an equal, or as nearly equal as possible, number of Directors.
The terms of each class will expire in succeeding years. It will,
therefore, require elections in three consecutive years to reelect
or to replace the entire Board of Directors. The Bylaws of the
Corporation also provide that certain business combinations must
be approved by an affirmative vote of the holders of two-thirds of
the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (the
"Voting Stock"). A "business combination" subject to this vote of
approval is defined to include certain mergers or consolidations;
certain sales, leases, exchanges, or mortgages of property in
excess of $10,000,000 fair market value; any plan or proposal for
liquidation or dissolution of the Corporation, and certain
reclassifications of securities or recapitalization of the
Corporation to which a stockholder beneficially owning more than
ten percent of the voting stock (an "Interested Stockholder")
or any affiliate of an Interested Stockholder is a party. The
two-thirds vote of approval is not required if the business
combination is approved by a majority of Directors not affiliated
with any Interested Stockholder or if the consideration received
by the other stockholders upon the consummation of the business
combination reflects a fair value (which is determined by formulae
set forth in the Bylaws) for their interest in the Corporation and
certain other requirements are met, including maintenance of
dividends during the business combination and the furnishing of
information to the stockholders of the Corporation.
The Certificate of Incorporation of the Corporation
requires a two-thirds affirmative vote of the shareholders to
amend any Bylaw which provides for the maximum number of Directors
on the Board, for a classified Board with staggered items of
office or for approval by the shareholders or by the Board of
Directors of any business combination. The Certificate of
Incorporation also requires that shareholders representing at
least two-thirds of the total number of shares of the Corporation
must sign a written consent of any action without a meeting of
the shareholders. Reference is hereby made to the Certificate
of Incorporation and the Bylaws of the Corporation which are
incorporated by reference as exhibits to the Registration Statement
of which this Prospectus is a part.
The provisions described in the foregoing two paragraphs, as
well as the provisions of the Rights Agreement described under
"Description of Rights" below, may tend to defer any potential
unfriendly tender offers or other efforts to obtain control of the
Corporation. On the other hand, these provisions will tend to assure
continuity of management and corporate policies and tend to induce any
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<PAGE> 21
persons seeking control of the Corporation or a business
combination with the Corporation to negotiate on terms acceptable
to the then elected Board of Directors of the Corporation.
The transfer agent for the Common Stock is The Bank
of New York, Church Street Station, P.O. Box 11272, New York,
New York 10277-0123.
DESCRIPTION OF RIGHTS
THE RIGHTS AGREEMENT
The information set forth below summarizes certain of
the provisions of the Rights Agreement incorporated by reference
as an exhibit to the Registration Statement of which this
Prospectus is a part. Such information is qualified in its
entirety by reference to such exhibit. See "Available Information."
On January 27, 1989, the Board of Directors of SBC
declared a dividend distribution of one right (a "Right") for
each outstanding share of Common Stock to shareholders of record
at the close of business on February 16, 1989. After giving
effect to a stock split in May 1993, effected in the form of a
stock dividend, each share of Common Stock also represents one-half
of a Right. Each Right entitles the registered holder to purchase
from SBC a unit consisting of one one-hundredth of a share (a "Unit")
of Series A Junior Participating Preferred Stock, par value $1.00
per share (the "Series A Preferred Stock"), at a purchase price of
$160 per Unit, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between SBC and The Bank of
New York, as successor Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and no
separate certificate representing the Rights (the "Rights
Certificates") will be distributed. The Rights will separate from
the Common Stock and a distribution date (the "Distribution Date")
will occur upon the earliest of any of the following events:
(A) 10 business days following a public announcement
that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right
to acquire (the "Stock Acquisition Date"), beneficial
ownership of 20% or more of the shares of Common Stock then
outstanding;
(B) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person
or group beneficially owning 20% or more of such outstanding
shares of Common Stock;
(C) 10 days after the Board of Directors of SBC
determines that any person, alone or together with its
affiliates and associates, has become the beneficial owner
of an amount of Common Stock which the SBC Board of Directors
determines to be substantial (which amount shall in no event
be less than 10% of the shares of Common Stock outstanding)
and at least a majority of the independent directors, after
reasonable inquiry and investigation, including consultation
with such persons as such directors shall deem appropriate,
determines that (i) beneficial ownership by such person is
intended to cause SBC to repurchase the Common Stock
beneficially owned by such person or to cause
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<PAGE> 22
pressure on SBC to take action or enter into a
transaction or series of transactions intended to provide
such person with short-term financial gain under
circumstances where the SBC Board of Directors determines
that the best long-term interests of SBC and its
shareowners would not be served by taking such action or
entering into such transactions or series of transactions
at that time or (ii) beneficial ownership by such person
is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment
of relationships with customers or regulators or
impairment of SBC's ability to maintain its competitive
position) on the business or prospects of SBC (any such
person being referred to herein and in the Rights
Agreement as an "Adverse Person").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after February 16,
1989 will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Pursuant to the
Rights Agreement, SBC reserves the right to require that, upon
any exercise of Rights, a number of Rights be exercised so
that only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the
Distribution Date and will expire at the close of business on
January 27, 1999, unless they are earlier redeemed by SBC or
expire in accordance with other provisions of the Rights
Agreement as described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by
the SBC Board of Directors, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event that, at any time following the
Distribution Date, (i) a Person becomes the beneficial owner
(except pursuant to a Flip-Over Event, as described below, or
an offer for all outstanding shares of Common Stock which the
independent directors determine to be fair to and otherwise in
the best interests of SBC and its shareowners) of more than
20% of the then outstanding shares of Common Stock, or (ii) a
Person becomes an Adverse Person, each holder of a Right will
thereafter have the right to receive, upon exercise, Series A
Preferred Stock (or, in certain circumstances, cash, property
or other securities of SBC) having a value equal to two times
the Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any of the events set
forth in this paragraph ("Flip-In Events"), all Rights that
are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person or
an Adverse Person will be null and void. However, Rights are
not exercisable following the occurrence of either of the
Flip-In Events set forth above until such time as the Rights
are no longer redeemable by SBC as set forth below.
For example, at a Purchase Price of $160 per Right,
each Right not owned by an Acquiring Person or by an Adverse
Person (or by certain related parties) following Flip-In
Events set forth in the preceding paragraph would entitle its
holder to purchase $320 worth of Common Stock (or other
consideration, as noted above) for $160. Assuming that the
Common Stock had a per share value of $40 at such time, the
holder of each valid Right would be entitled to purchase 8
shares of Common Stock for $160.
<PAGE>
<PAGE> 23
Following the occurrence of any of the Flip-In Events set forth
above, subject to applicable law, the SBC Board of Directors may determine
to exchange for any or all Rights (other than Rights held by the Acquiring
Person or Adverse Person and certain transferees) Common Stock with a value
equal to the Right's Purchase Price or substitute value in the form of cash,
property, debt or equity securities, or any combination of the foregoing.
Such exchange shall be on a pro rata basis if less than all Rights are to be
exchanged, and holders of Rights pay no consideration (other than delivery
of the Right) in such exchange.
In the event that, at any time following the Stock Acquisition
Date, (i) SBC is acquired in a merger or other business combination
transaction in which SBC is not the surviving corporation (other than
certain mergers following a fair offer described in the third preceding
paragraph), or (ii) more than 50% of SBC's assets, cash flow or earning
power is sold or transferred (events (i) and (ii) are referred to as
"Flip-Over Events" and together with Flip-In Events, the "Triggering
Events") each holder of a Right which has not yet been exercised (except
Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of
the Right.
The Purchase Price payable, and the number of Units of Series A
Preferred Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series A Preferred Stock, (ii) if holders of the
Series A Preferred Stock are granted certain rights or warrants to subscribe
for Series A Preferred Stock or convertible securities at less than the
current market price of Series A Preferred Stock, or (iii) upon the
distribution to holders of the Series A Preferred Stock of evidence of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Series A
Preferred Stock on the last trading date prior to the date of exercise.
In general, at any time until 10 business days following the Stock
Acquisition Date, or such later date as the SBC Board of Directors may
designate, SBC may redeem the Rights in whole, but not in part, at a price
of $.05 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the SBC Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem
the Rights shall require the concurrence of a majority of the Continuing
Directors. Immediately upon the action of the SBC Board of Directors
ordering redemption of the Rights (with, where required, the concurrence of
the Continuing Directors) the Rights will terminate and the only right of
the holders of Rights will be to receive the $.05 redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of SBC who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board
if such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, Adverse Person or an
affiliate or associate of an Acquiring Person or Adverse Person, or any
representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareowner of SBC, including, without limitation, the right to
vote or to receive dividends. While the distribution
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<PAGE> 24
of the Rights will not be taxable to shareowners or to SBC,
shareowners may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable
for Series A Preferred Stock (or for other consideration) or
for common stock of the acquiring company as set forth above.
Other than those provisions relating to the
principal economic terms of the Rights, any of the provisions
of the Rights Agreement may be amended by the SBC Board of
Directors prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may
be amended by the Board (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any
ambiguity, to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any
Acquiring Person or Adverse Person), or to shorten or lengthen
any time period under the Rights Agreement.
DESCRIPTION OF SERIES A PREFERRED STOCK
The information set forth below summarizes certain
of the provisions of the Series A Junior Participating
Preferred Stock (the "Series A Preferred Stock") of the
Corporation. Such information is qualified in its entirety by
reference to the terms of the Series A Preferred Stock set
forth in the Corporation's Restated Certificate of
Incorporation, which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
In connection with the Rights Agreement, the Board
of Directors of the Corporation has authorized the issuance of
up to 4,000,000 shares of Series A Preferred Stock. See
"Rights Agreement." Upon issuance, each share of Series A
Preferred Stock is entitled to quarterly cash dividends equal
to the greater of $5 or 200 times (subject to antidilution
adjustments for stock dividends and stock splits) the
aggregate value of all dividends or other distributions
declared on the Common Stock (other than distributions of
Common Stock) since the last quarterly dividend payment date.
The Series A Preferred Stock is not redeemable by the
Corporation.
Each share of Series A Preferred Stock is entitled
to 200 votes (subject to antidilution adjustments) on all
matters submitted to a vote of the shareholders of the
Corporation, voting together as one class with the Common
Stock. In addition, if at any time dividends in an amount
equal to six quarterly dividend payments shall have accrued
and be unpaid, the Board of Directors shall be increased by
two directors and holders of the Series A Preferred Stock
shall have the right to elect two members to the Board of
Directors until dividends on the Series A Preferred Stock have
been declared and paid or set apart for payment. Except as
required by applicable law, holders of Series A Preferred
Stock have no other special voting rights. Whenever dividends
or distributions on the Series A Preferred Stock are in
arrears, the Corporation is prohibited from declaring or
paying dividends or distributions on, and the Corporation and
any subsidiary are prohibited from redeeming or acquiring for
value, any stock ranking junior as to dividends or upon
liquidation. During any such arrearage, the Corporation may
declare or pay dividends on stock ranking on a parity with the
Series A Preferred Stock as to dividends or upon liquidation
only if declared or paid ratably with the Series A Preferred
Stock. During any such arrearage, the Corporation and any
subsidiary are prohibited from redeeming or acquiring for
value any such parity stock or any Series A Preferred Stock,
except pursuant to an exchange of parity stock for stock
ranking junior to the Series A Preferred Stock or pursuant to
a purchase offer to the Series A Preferred Stock and holders
of parity stock on terms the Board of Directors determines to
be fair and equitable.
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<PAGE> 25
The Series A Preferred Stock ranks junior to all
other series of the Corporation's preferred stock as to the
payment of dividends and the distribution of assets, unless
the terms of any such series shall provide otherwise.
Upon any liquidation, dissolution or winding up of
the Corporation, the Series A Preferred Stock is entitled to a
liquidation preference of $100 per share plus any accrued but
unpaid dividends, subject to the prior rights of any series of
preferred stock ranking in liquidation senior to the Series A
Preferred Stock. In the event of any shortfall in the assets
available for distribution, any such liquidating distribution
shall be made ratably to the Series A Preferred Stock and any
other series of preferred stock ranking on a parity in
proportion to their relative liquidation preferences.
Following such payment, no additional liquidating
distributions may be made on the Series A Preferred Stock
until each share of Common Stock shall have received $0.50
(subject to antidilution adjustments). Thereafter, any
remaining assets shall be distributed to each share of Series
A Preferred Stock and each share of Common Stock in the ratio
of 200 to 1 (subject to antidilution adjustments).
PLAN OF DISTRIBUTION
GENERAL
The Corporation or Capital may sell the Securities
being offered hereby: (i) directly to purchasers,
(ii) through agents, (iii) through dealers, (iv) through
underwriters, or (v) through a combination of any such methods
of sale.
The distribution of the 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.
Offers to purchase Securities may be solicited
directly by the Corporation or Capital or by agents designated
by the Corporation or Capital 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 Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the
Corporation or Capital to such agent will be set forth in the
Prospectus Supplement relating to the offering of such
Securities. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If a dealer is utilized in the sale of the
Securities in respect of which this Prospectus is delivered,
the Corporation or Capital will sell such Securities to the
dealer, as principal. The dealer, which may be deemed to be
an underwriter as that term is defined in the Securities Act,
may then resell such Securities to the public at varying
prices to be determined by such dealer at the time of resale.
If an underwriter or underwriters are utilized in
the sale, the Corporation or Capital will execute an
underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters will be set
forth in the applicable Prospectus Supplement, which will be
used by the underwriters to make resales of the Securities in
respect of which this Prospectus is delivered to the public.
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<PAGE> 26
Underwriters, dealers, agents and other persons may
be entitled, under agreements which may be entered into with
the Corporation or Capital, to indemnification against certain
civil liabilities, including liabilities under the Securities
Act.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the
Corporation or Capital will authorize underwriters, dealers or
other persons acting as agents of the Corporation or Capital
to solicit offers by certain institutions to purchase
Securities from the Corporation or Capital pursuant to
contracts providing for payment and delivery on a future date
or dates. Institutions with which such contracts may be made
include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and
charitable institutions and others, but in all cases such
institutions must be approved by the Corporation or Capital.
The obligations of any purchaser under any such contract will
not be subject to any conditions except that (a) the purchase
of the Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such
purchaser is subject, and (b) if the Securities are also being
sold to underwriters, the Corporation or Capital shall have
sold to such underwriters the Securities not sold for delayed
delivery. The underwriters, dealers and such other persons
will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL OPINIONS
The validity of the Securities of the Corporation
offered hereby and of the Support Agreement will be passed
upon for the Corporation by Mr. James D. Ellis, Senior
Executive Vice President and General Counsel of the
Corporation, and for any underwriters, dealers or agents by
Sullivan & Cromwell, New York, New York. The validity of the
Debt Securities of Capital offered hereby and of the Support
Agreement will be passed upon for Capital by Mr. William J.
Free, Secretary of Capital and its counsel, and for any
underwriters, dealers or agents by Sullivan & Cromwell, New
York, New York. As of November 30, 1994, Mr. Ellis owned
44,783 shares of SBC stock and options to purchase 129,187
shares of SBC stock, and Mr. Free owned 12,494 shares of SBC
stock and options to purchase 52,951 shares of SBC stock.
EXPERTS
The consolidated financial statements and financial
statement schedules included or incorporated by reference in
SBC's Annual Report on Form 10-K for the year ended December
31, 1993, and incorporated by reference in this prospectus and
registration statement, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports included
and incorporated by reference in SBC's Annual Report on Form
10-K. Such consolidated financial statements and financial
statement schedules have been incorporated by reference in
reliance upon such reports given upon the authority of Ernst &
Young LLP as experts in accounting and auditing.
<PAGE>
<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission
Filing Fee . . . . . . . . . . . . . . . . $1,034,490
Legal Fees and Expenses . . . . . . . . . . . 75,000*
Fees and Expenses of Trustee . . . . . . . . 20,000*
Accountants' Fees and Expenses . . . . . . . 65,000*
Blue Sky Fees and Expenses . . . . . . . . . 50,000*
Miscellaneous Expenses . . . . . . . . . . . 317,000
Total . . . . . . . . . . . . . . . . . $1,561,490*
[FN]
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law
("DGCL") permits a corporation to indemnify its directors and
officers against expenses (including attorneys' fees),
judgments, fines and amount paid in settlements actually and
reasonably incurred by them in connection with any action,
suit or proceeding brought by third parties, if such directors
or officers acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reason to believe their conduct
was unlawful. In a derivative action, i.e., only by or in the
right of the corporation, indemnification may be made only for
expenses actually and reasonably incurred by directors and
officers in connection with the defense or settlement of an
action or suit, and only with respect to a matter as to which
they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification
shall be made if such person shall have been adjudged liable
to the corporation, unless and only to the extent that the
court in which the action or suit was brought shall determine
upon application that the defendant officers or directors are
fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
SBC's Bylaws provide that SBC shall indemnify any
person who was or is a party or is threatened to made a party
to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action or suit
by or in the right of SBC) by reason of the fact that such
person is or was a director, officer, employee or agent of SBC
or is or was serving at the request of SBC 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
such person in connection with such action, suit or
proceeding, but in each case only if and to the extent
permitted under applicable state or federal law.
<PAGE>
<PAGE> 28
SBC's Bylaws further state that the indemnification
provided therein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled, and shall
continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of
the heirs, and personal representatives of such a person.
The SBC Restated Certificate of Incorporation
provides that no director of SBC shall be liable to SBC or its
stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability (1) for any breach of the
director's duty of loyalty to SBC or its stockholders; (2) for
acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of the law; (3)
under Section 174 of the DGCL; or (4) for any transaction from
which a director derived an improper benefit.
The bylaws of Capital provide that Capital shall
indemnify, and advance expenses to, any director, officer
employee or agent of Capital or any person serving as a
director or officer of any other entity at the request of
Capital to the fullest extent permitted by law.
Pursuant to agreements which may be entered into by
SBC and Capital, underwriters may agree to indemnify and hold
harmless SBC and Capital, each of its directors, each of its
officers who signed the Registration Statement and any person
who controls SBC or Capital within the meaning of the
Securities Act from and against certain civil liabilities,
including liabilities under the Securities Act.
ITEM 16. EXHIBITS.
The exhibits identified in parentheses below, on
file with the Securities and Exchange Commission, are
incorporated herein by reference as exhibits hereto.
Exhibit
Number
1-a Form of Underwriting Agreement for Debt Securities issued
by the Corporation.
1-b Form of Underwriting Agreement for Preferred Stock and/or
Depositary Shares (to be filed by post-effective
amendment or incorporated by reference herein prior to
the issuance of Preferred Stock and/or Depositary
Shares).
1-c Form of Underwriting Agreement for Common Stock (to be
filed by post-effective amendment or incorporated by
reference herein prior to the issuance of Common Stock).
1-d Form of Selling Agency Agreement for Debt Securities
issued by Capital (Exhibit 1-b to Registration Statement
No. 33-45490).
1-e Form of Underwriting Agreement for Debt Securities issued
by Capital.
4-a Form of Indenture, dated as of November 1, 1994, between
Southwestern Bell Corporation and The Bank of New York,
Trustee. The form or forms of Debt Securities with
respect to each particular series of Debt Securities will
be filed as an exhibit to a Current Report on Form 8-K of
Southwestern Bell Corporation and incorporated herein by
reference.
<PAGE>
<PAGE> 29
4-b Restated Certificate of Incorporation, as amended to date
(Exhibit 3-a to Form 8A/A, dated June 22, 1994, File 1-
8610).
4-c By-Laws, as amended to date (Exhibit 3-b to the quarterly
Report on Form 10-Q for the second quarter 1991, File 1-
8610).
4-d Rights Agreement (executed in the form as filed), dated
as of January 27, 1989, between Southwestern Bell
Corporation and American Transtech, Inc., the Rights
Agent, which includes as Exhibit B thereto the Form of
Rights Certificate (Exhibit 4-a to Form 8-A, dated
February 9, 1989, File 1-8610).
4-e Amendment of Rights Agreement (executed in the form as
filed), dated as of August 5, 1992, between Southwestern
Bell Corporation, American Transtech, Inc., and The Bank
of New York, the successor Rights Agent, which includes
the Form of Rights Certificate as an attachment
identified as Exhibit B (Exhibit 4-a to Form 8-K, dated
August 7, 1992, File 1-8610).
4-f Form of Rights Certificate (included in the attachment to
the Amendment of Rights Agreement and identified as
Exhibit B) (Exhibit 4-b to Form 8-K, dated August 7,
1992, File 1-8610).
4-g Second Amendment of Rights Agreement, dated as of June
15, 1994, between Southwestern Bell Corporation and The
Bank of New York, as successor Rights Agent (Exhibit 4-e
to Form 8-A/A, dated June 22, 1994, File 1-8610).
4-h Form of Deposit Agreement, including form of Depositary
Receipt for Depositary Shares (to be filed by post-
effective amendment or incorporated by reference herein
prior to the issuance of Depositary Shares).
4-i Indenture, dated as of February 1, 1987, among
Southwestern Bell Capital Corporation, Southwestern Bell
Corporation, and The Bank of New York, Trustee (Exhibit
4-a to Registration Statement No. 2-11669). The form or
forms of Debt Securities with respect to each particular
series of Debt Securities will be filed as an exhibit to
a Current Report on Form 8-K of Southwestern Bell
Corporation and incorporated herein by reference.
4-j First Supplemental Indenture, dated October 1, 1990,
among Southwestern Bell Capital Corporation, Southwestern
Bell Corporation and The Bank of New York, Trustee
(Exhibit 4-a to Form 8-K, dated January 7, 1991,
File 1-8610).
4-k Support Agreement between Southwestern Bell Capital
Corporation and Southwestern Bell Corporation
(Exhibit 4-b to Registration Statement No. 33-11669).
5-a Opinion of Mr. James D. Ellis, Senior Executive Vice
President and General Counsel, Southwestern Bell
Corporation, as to the validity of the Securities to be
issued by SBC and the validity of the Support Agreement.
5-b Opinion of Mr. William J. Free, Secretary of Southwestern
Bell Capital Corporation, as to the validity of the Debt
Securities to be issued by Capital and the validity of the Support
Agreement.
<PAGE>
<PAGE> 30
12 Computation of Ratio of Earnings to Fixed Charges
(Exhibit 12 to Form 10-Q for the third quarter 1994, File
1-8610).
23-a Consent of Ernst & Young LLP, Independent Auditors.
23-b Consent of Mr. James D. Ellis is contained in his opinion
filed as Exhibit 5-a.
23-c Consent of Mr. William J. Free is contained in his
opinion filed as Exhibit 5-b.
24-a Powers of Attorney of SBC.
25-a Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of New
York, as Trustee under the Capital Indenture and the SBC
Indenture.
ITEM 17. UNDERTAKINGS.
I. The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales
are being made of the securities registered hereby,
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 this
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 this registration statement;
(iii) to include any material information with
respect to the plan of distribution not
previously disclosed in this registration
statement or any material change to such
information in this 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 SBC 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 herein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
<PAGE> 31
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability
under the Securities Act of 1933, each filing of
SBC's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this
registration statement shall be deemed to be a new
registration statement relating to the securities
offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
II. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrants
pursuant to the provisions referred to in Item 15 or
otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in
the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid
by a director, officer or controlling person of the
registrants in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrants will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
<PAGE> 32
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT AND ISSUER OF SECURITIES AND OBLIGOR PURSUANT
TO THE SUPPORT AGREEMENT CERTIFIES THAT IT HAS REASONABLE
GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR
FILING FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAN ANTONIO AND
STATE OF TEXAS, ON THE 16TH DAY OF DECEMBER, 1994.
SOUTHWESTERN BELL CORPORATION
By /s/ Donald E. Kiernan
Donald E. Kiernan
Senior Vice President, Treasurer
and Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
Principal Executive Officer:
Edward E. Whitacre Jr.*
Chairman and Chief Executive Officer
Principal Financial and Accounting Officer:
Donald E. Kiernan, /s/ Donald E. Kiernan
Senior Vice President, Treasurer Donald E. Kiernan, as
and Chief Financial Officer attorney-in-fact for
Mr. Whitacre, the Directors
and on his own behalf as
Principal Financial Officer
and Principal Accounting Officer
December 16, 1994
Directors:
Clarence C. Barksdale* Bobby R. Inman*
James E. Barnes* Charles F. Knight*
Jack S. Blanton* Sybil C. Mobley*
August A. Busch, III* Haskell M. Monroe, Jr.*
Ruben R. Cardenas* Carlos Slim Helu*
Martin K. Eby, Jr.* Patricia P. Upton*
Tom C. Frost* Edward E. Whitacre, Jr.*
Jess T. Hay*
*by power of attorney
<PAGE>
<PAGE> 33
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THE REGISTRANT AND ISSUER OF DEBT SECURITIES CERTIFIES THAT IT
HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAN
ANTONIO AND STATE OF TEXAS, ON THE 16TH DAY OF DECEMBER, 1994.
SOUTHWESTERN BELL CAPITAL CORPORATION
By /s/ Donald E. Kiernan
Donald E. Kiernan
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
December 16, 1994 By
By /s/ Donald E. Kiernan
Donald E. Kiernan
President, Treasurer and Director (principal
executive officer and principal financial
and accounting officer)
By /s/ William J. Free
William J. Free
Senior Vice President, Secretary and
Director
<PAGE>
<PAGE> 34
INDEX TO EXHIBITS
The exhibits identified in parentheses below, on file with the
Securities and Exchange Commission, are incorporated herein by
reference as exhibits hereto.
Exhibit
Number
1-a Form of Underwriting Agreement for Debt Securities
issued by the Corporation.
1-b Form of Underwriting Agreement for Preferred Stock
and/or Depositary Shares (to be filed by post-
effective amendment or incorporated by reference
herein prior to the issuance of Preferred Stock
and/or Depositary Shares).
1-c Form of Underwriting Agreement for Common Stock (to
be filed by post-effective amendment or incorporated
by reference herein prior to the issuance of Common
Stock).
1-d Form of Selling Agency Agreement for Debt Securities
issued by Capital (Exhibit 1-b to Registration
Statement No. 33-45490).
1-e Form of Underwriting Agreement for Debt Securities
issued by Capital.
4-a Form of Indenture, dated as of November 1, 1994,
between Southwestern Bell Corporation and The Bank
of New York, Trustee. The form or forms of Debt
Securities with respect to each particular series of
Debt Securities will be filed as an exhibit to a
Current Report on Form 8-K of Southwestern Bell
Corporation and incorporated herein by reference.
4-b Restated Certificate of Incorporation, as amended to
date (Exhibit 3-a to Form 8A/A, dated June 22, 1994,
File 1-8610).
4-c By-Laws, as amended to date (Exhibit 3-b to the
quarterly Report on Form 10-Q for the second quarter
1991, File 1-8610).
4-d Rights Agreement (executed in the form as filed),
dated as of January 27, 1989, between Southwestern
Bell Corporation and American Transtech, Inc., the
Rights Agent, which includes as Exhibit B thereto
the Form of Rights Certificate (Exhibit 4-a to Form
8-A, dated February 9, 1989, File 1-8610).
4-e Amendment of Rights Agreement (executed in the form
as filed), dated as of August 5, 1992, between
Southwestern Bell Corporation, American Transtech,
Inc., and The Bank of New York, the successor Rights
Agent, which includes the Form of Rights Certificate
as an attachment identified as Exhibit B (Exhibit 4-
a to Form 8-K, dated August 7, 1992, File 1-8610).
4-f Form of Rights Certificate (included in the
attachment to the Amendment of Rights Agreement and
identified as Exhibit B) (Exhibit 4-b to Form 8-K,
dated August 7, 1992, File 1-8610).
4-g Second Amendment of Rights Agreement, dated as of
June 15, 1994, between Southwestern Bell Corporation
and The Bank of New York, as successor Rights Agent
(Exhibit 4-e to Form 8-A/A, dated June 22, 1994,
File 1-8610).
<PAGE>
<PAGE> 35
4-h Form of Deposit Agreement, including form of
Depositary Receipt for Depositary Shares (to be
filed by post-effective amendment or incorporated by
reference herein prior to the issuance of Depositary
Shares).
4-i Indenture, dated as of February 1, 1987, among
Southwestern Bell Capital Corporation, Southwestern
Bell Corporation, and The Bank of New York, Trustee
(Exhibit 4-a to Registration Statement No. 2-11669).
The form or forms of Debt Securities with respect to
each particular series of Debt Securities will be
filed as an exhibit to a Current Report on Form 8-K
of Southwestern Bell Corporation and incorporated
herein by reference.
4-j First Supplemental Indenture, dated October 1, 1990,
among Southwestern Bell Capital Corporation,
Southwestern Bell Corporation and The Bank of
New York, Trustee (Exhibit 4-a to Form 8-K, dated
January 7, 1991, File 1-8610).
4-k Support Agreement between Southwestern Bell Capital
Corporation and Southwestern Bell Corporation
(Exhibit 4-b to Registration Statement
No. 33-11669).
5-a Opinion of Mr. James D. Ellis, Senior Executive Vice
President and General Counsel, Southwestern Bell
Corporation, as to the validity of the Securities to
be issued by SBC and the validity of the Support Agreement.
5-b Opinion of Mr. William J. Free, Secretary of
Southwestern Bell Capital Corporation, as to the
validity of the Debt Securities to be issued by Capital and the
validity of the Support Agreement.
12 Computation of Ratio of Earnings to Fixed Charges
(Exhibit 12 to Form 10-Q for the third quarter 1994,
File 1-8610).
23-a Consent of Ernst & Young LLP, Independent Auditors.
23-b Consent of Mr. James D. Ellis is contained in his
opinion filed as Exhibit 5-a.
23-c Consent of Mr. William J. Free is contained in his
opinion filed as Exhibit 5-b.
24-a Powers of Attorney of SBC.
25-a Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of The Bank of
New York, as Trustee under the Capital Indenture and
the SBC Indenture.
<PAGE>
EXHIBIT 1.A
Draft of December 1, 1994
[Debt Securities]
SOUTHWESTERN BELL CORPORATION
DEBT SECURITIES
FORM OF UNDERWRITING AGREEMENT
(date)
To the Representative(s)
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Southwestern Bell Corporation, a Delaware corporation
(the "Company"), may issue and sell from time to time series
of its debt securities registered under the registration
statement referred to in Paragraph 1(a) hereof ("Securities"
and individually "Security"). The Securities will be issued
under an Indenture, dated as of November 1, 1994 (the
"Indenture"), from the Company to The Bank of New York, as
Trustee, in one or more series, which series may vary as to
interest rates, maturities, redemption provisions and selling
prices, with all such terms for any particular series being
determined at the time of sale. The Company proposes to sell
to the underwriters named in Schedule II hereto
("Underwriters") for whom you are acting as representative(s)
("Representative"), a series of Securities, of the
designation, with the terms and in the aggregate principal
amount specified in Schedule I hereto ("Underwritten
Securities" and, individually, "Underwritten Security").
1. The Company represents and warrants to, and agrees
with, the several Underwriters that:
(a) A registration statement on Form S-3 with
respect to the Securities has been prepared by the
Company in conformity with the requirements of the
Securities Act of 1933, as amended ("Securities Act"),
and the rules and regulations ("Rules and Regulations")
of the Securities and Exchange Commission ("Commission")
thereunder and has become effective. As used in this
Agreement, (i) "Registration Statement" means that
registration statement, as amended or supplemented to the
date hereof (including all documents incorporated therein
by reference); (ii) "Preliminary Prospectus" means each
prospectus (including all documents incorporated therein
by reference) included in that Registration Statement, or
amendments thereto or supplements thereof, before it
became effective under the Securities Act, including
any prospectus filed with the Commission pursuant to
Rule 424(a) of the Rules and Regulations; (iii) "Basic
Prospectus" means the prospectus (including all documents
incorporated therein by reference) included in the
Registration Statement; and (iv) "Prospectus" means the
Basic Prospectus, together with any prospectus amendment
or supplement <PAGE>
<PAGE> 2
(including in each case all documents incorporated therein
by reference) specifically relating to the Underwritten
Securities, as filed with, or mailed for filing to, the
Commission pursuant to paragraph (b) or (c) of Rule 424 of
the Rules and Regulations. The Commission has not issued
any order preventing or suspending the use of the Prospectus.
(b) The Registration Statement and each Prospectus
contain, and (in the case of any amendment or supplement
to any such document, or any material incorporated by
reference in any such document, filed with the Commission
after the date as of which this representation is being
made) will contain at all times during the period
specified in Paragraph 8(c) hereof, all statements which
are required by the Securities Act, the Securities
Exchange Act of 1934, as amended ("Exchange Act"), the
Trust Indenture Act of 1939, as amended ("Trust Indenture
Act"), and the rules and regulations of the Commission
under such Acts; the Indenture, including any amendments
and supplements thereto, pursuant to which the
Underwritten Securities will be issued will conform with
the requirements of the Trust Indenture Act and the rules
and regulations of the Commission thereunder, and the
Registration Statement and the Prospectus do not, and (in
the case of any amendment or supplement to any such docu-
ment, or any material incorporated by reference in any
such document, filed with the Commission after the date
as of which this representation is being made) will not
at any time during the period specified in Paragraph 8(c)
hereof, contain any untrue statement of a material fact
or omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided that the Company makes no
representation or warranty as to information contained in
or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with
information furnished in writing to the Company through
the Representative by or on behalf of any Underwriter
specifically for use therein, or as to any statements in
or omissions from the Statement of Eligibility and
Qualification of the Trustee under the Indenture.
(c) The Company is not in violation of its
corporate charter or bylaws or in default under any
agreement, indenture or instrument, the effect of which
violation or default would be material to the Company;
the execution, delivery and performance of this Agreement
and any Delayed Delivery Contracts (as defined in Paragraph 3
hereof) and compliance by the Company with the provisions
of the Underwritten Securities and the Indenture will not
conflict with, result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of
the Company or any of its material subsidiaries pursuant
to the terms of, or constitute a default under, any
agreement, indenture or instrument, or result in a
violation of the corporate charter or bylaws of the
Company or any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company;
and except as required by the Securities Act, the Trust
Indenture Act and applicable state securities laws, no
consent, authorization or order of, or filing or
registration with, any court or governmental agency is
required for <PAGE>
<PAGE> 3
the execution, delivery and performance of this Agreement,
the Delayed Delivery Contracts, if any, and the Indenture.
(d) Except as described in or contemplated by the
Registration Statement and the Prospectus, there shall
have not occurred any changes or any development
involving a prospective change, or affecting particularly
the business or properties of the Company or its
subsidiaries which materially impairs the investment
quality of the Underwritten Securities since the dates as
of which information is given in the Registration
Statement and the Prospectus.
(e) On the Delivery Date (as defined in Paragraph 7
hereof) (i) the Indenture will have been duly authorized,
executed and delivered by the Company and will constitute
the legally binding obligation of the Company,
enforceable in accordance with its terms, (ii) the
Underwritten Securities will have been duly authorized
and, upon payment therefor as provided in this Agreement,
will constitute legally binding obligations of the
Company entitled to the benefits of the Indenture, and
(iii) the Underwritten Securities and the Indenture will
conform to the descriptions thereof contained in the
Prospectus.
(f) Each of the Company and its subsidiaries has
been duly incorporated, is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation, 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 wherein it owns or
leases properties or conducts business, except where the
failure to so qualify would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(g) Except as described in the Prospectus, there is
no material litigation or governmental proceeding pending
or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries which is
reasonably expected to result in any material adverse
change in the financial condition, results of operations,
business or prospects of the Company and its subsidiaries
taken as a whole or which is required to be disclosed in
the Registration Statement.
(h) The financial statements filed as part of the
Registration Statement or included in any Preliminary
Prospectus or the Prospectus present, or (in the case of
any amendment or supplement to any such document, or any
material incorporated by reference in any such document,
filed with the Commission after the date as of which this
representation is being made) will present at all times
during the period specified in Paragraph 8(c) hereof,
fairly, the consolidated financial condition and results
of operations of the Company and its subsidiaries, at the
dates and for the periods indicated, and have been, and
(in the case of any amendment or supplement to any such
document, or any material incorporated by reference in
any such document, filed with <PAGE>
<PAGE> 4
the Commission after the date as of which this
representation is being made) will be at all times during
the period specified in Paragraph 8(c) hereof, prepared
in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved (except as described in the notes thereto).
(i) The documents incorporated by reference into
any Preliminary Prospectus or the Prospectus have been,
and (in the case of any amendment or supplement to any
such document, or any material incorporated by reference
in any such document, filed with the Commission after the
date as of which this representation is being made) will
be, at all times during the period specified in Paragraph
8(c) hereof, prepared by the Company in conformity with
the applicable requirements of the Securities Act and the
Rules and Regulations and the Exchange Act and the rules
and regulations of the Commission thereunder and such
documents have been, or (in the case of any amendment or
supplement to any such document, or any material
incorporated by reference in any such document, filed
with the Commission after the date as of which this
representation is being made) will be at all times during
the period specified in Paragraph 8(c) hereof, timely
filed as required thereby.
(j) There are no contracts or other documents which
are required to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and
Regulations, or which were required to be filed as
exhibits to any document incorporated by reference in the
Prospectus by the Exchange Act or the rules and
regulations of the Commission thereunder, which have not
been filed as exhibits to the Registration Statement or
to such document or incorporated therein by reference as
permitted by the Rules and Regulations or the rules and
regulations of the Commission under the Exchange Act as
required.
2. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price
and on the other terms set forth in Schedule I hereto, the
principal amount of the Underwritten Securities set forth
opposite its name in Schedule II hereto.
3. Any offer to purchase Underwritten Securities by
institutional investors solicited by the Underwriters for
delayed delivery shall be made pursuant to contracts
substantially in the form of Exhibit A attached hereto, with
such changes therein as the Company and the Representative may
approve ("Delayed Delivery Contracts"). The Company shall
have the right, in its sole discretion, to approve or
disapprove each such institutional investor. Underwritten
Securities which are subject to Delayed Delivery Contracts are
herein sometimes called "Delayed Delivery Underwritten
Securities" and Underwritten Securities which are not subject
to Delayed Delivery Contracts are herein sometimes called
"Immediate Delivery Underwritten Securities".
Contemporaneously with the purchase on the Delivery Date
by the Underwriters of the Immediate Delivery Underwritten
Securities pursuant to this<PAGE>
<PAGE> 5
Agreement, the Company will pay to the Representative, for the
account of the Underwriters, the compensation specified in
Schedule I hereto for arranging the sale of Delayed Delivery
Underwritten Securities. The Underwriters shall have no
responsibility with respect to the validity or performance of
any Delayed Delivery Contracts.
For the purpose of determining the principal amount of
Immediate Delivery Underwritten Securities to be purchased by
each Underwriter, there shall be deducted from the principal
amount of Underwritten Securities to be purchased by such
Underwriter as set forth in Schedule II hereto that portion of
the aggregate principal amount of Delayed Delivery
Underwritten Securities that the principal amount of
Underwritten Securities to be purchased by such Underwriter as
set forth in Schedule II hereto bears to the aggregate principal
amount of Underwritten Securities set forth therein to be purchased
by all of the Underwriters (in each case as adjusted by the
Representative to avoid fractions of the minimum principal amount
in which the Underwritten Securities may be issued), except to the
extent that the Representative determines, in its discretion,
that such deduction shall be otherwise than in such proportion
and so advises the Company.
4. [Reserved]
5. The Company shall not be obligated to deliver any
Underwritten Securities except upon payment for all Immediate
Delivery Underwritten Securities to be purchased pursuant to
this Agreement as hereinafter provided.
6. If any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the
Immediate Delivery Underwritten Securities which the
defaulting Underwriter agreed but failed to purchase in the
respective proportions which the principal amount of
Underwritten Securities set forth in Schedule II hereto to be
purchased by each remaining non-defaulting Underwriter set
forth therein bears to the aggregate principal amount of
Underwritten Securities set forth therein to be purchased by
all the remaining non-defaulting Underwriters; provided that
the remaining non-defaulting Underwriters shall not be
obligated to purchase any Immediate Delivery Underwritten
Securities if the aggregate principal amount of Immediate
Delivery Underwritten Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase
exceeds 9.09% of the total principal amount of Underwritten
Securities, and any remaining non-defaulting Underwriter shall
not be obligated to purchase more than 110% of the principal
amount of Underwritten Securities set forth in Schedule II
hereto to be purchased by it. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those
other underwriters satisfactory to the Representative who so
agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them,
all the Immediate Delivery Underwritten Securities. If the
remaining Underwriters or other underwriters satisfactory to
the Representative do not elect to purchase the Immediate
Delivery Underwritten Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase,
this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, or the Company, except that
the<PAGE>
<PAGE> 6
Company will continue to be liable for the payment of
expenses as set forth in Paragraph 8(h) hereof.
Nothing contained in this Paragraph 6 shall relieve a
defaulting Underwriter of any liability it may have to the
Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Immediate
Delivery Underwritten Securities of a defaulting or
withdrawing Underwriter, either the Representative or the
Company may postpone the Delivery Date for up to seven full
business days in order to effect any changes that in the
opinion of the Company or the Representative may be necessary
in the Registration Statement, the Prospectus or in any other
document or arrangement.
7. Delivery of and payment for the Immediate Delivery
Underwritten Securities shall be made at such address, date
and time as may be specified in Schedule I hereto. This date
and time are sometimes referred to as the "Delivery Date." On
the Delivery Date, the Company shall deliver the Immediate
Delivery Underwritten Securities to the Representative for the
account of each Underwriter against payment to or upon the
order of the Company of the purchase price by certified or
official bank check or checks payable in next-day funds
settled through the New York Clearing House or such other
Clearing House as is named in Schedule I. Time shall be of
the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the
Immediate Delivery Underwritten Securities shall be in such
form or forms and in such denominations as may be set forth in
Schedule I. Immediate Delivery Underwritten Securities in
registered form shall be in such authorized denominations and
registered in such names as the Representative shall request
in writing not less than two full business days prior to the
Delivery Date. For the purpose of expediting the checking and
packaging of the Immediate Delivery Underwritten Securities,
the Company shall make the Immediate Delivery Underwritten
Securities available for inspection by the Representative in
New York, New York not later than 2:00 P.M., local time, on
the business day prior to the Delivery Date.
8. The Company agrees with the several Underwriters
that:
(a) The Company will furnish promptly to the
Representative and to counsel for the Underwriters signed
copies of the Registration Statement as originally filed
and each amendment and supplement thereto filed prior to
the date hereof and relating to or covering the
Underwritten Securities, and a copy of the Prospectus
filed with the Commission, including all documents
incorporated therein by reference and all consents and
exhibits filed therewith;
(b) The Company will deliver promptly to the
Representative such reasonable number of the following
documents as the Representative may request: (i)
conformed copies of the Registration Statement (excluding
exhibits other than the computation of the ratio of earnings
to fixed charges, the Indenture and this Agreement), (ii)
the Prospectus and (iii) any documents incorporated by
reference in the Prospectus;
<PAGE>
<PAGE> 7
(c) During any period when a Prospectus relating to
the Underwritten Securities is required by law to be
delivered, the Company will not file any amendment of the
Registration Statement nor will the Company file any
amendment or supplement to the Prospectus (except for (i)
an amendment or supplement consisting solely of the
filing of a document under the Exchange Act or (ii) a
supplement relating to an offering of securities other
than the Underwritten Securities), unless the Company has
furnished the Representative a copy of such proposed
amendment or supplement for its review prior to filing
and will not file any such proposed amendment or
supplement to which the Representative reasonably
objects. Subject to the foregoing sentence, the Company
will cause the Prospectus and any amendment or supplement
thereto to be filed with the Commission as required
pursuant to Rule 424 under the Securities Act. The
Company will promptly advise the Representative (i) when
the Prospectus or any amendment or supplement thereto
shall have been filed with the Commission pursuant to
Rule 424 under the Securities Act, (ii) when any
amendment of the Registration Statement shall have become
effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or amendment of
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 threatening
of any proceeding for that purpose and (v) of the receipt
by the Company of any notification with respect to the
suspension of the qualification of the Underwritten
Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. The
Company will promptly (upon filing thereof) furnish the
Representative a copy of any amendment or supplement to
the Prospectus or Registration Statement not furnished to
the Representative for prior review pursuant to
exceptions (i) or (ii) of the first sentence of this
subsection (a). The Company will 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.
(d) If, at any time when a prospectus relating to
the Underwritten Securities is required to be delivered
under the Securities Act, any event occurs as a result of
which the Registration Statement, as then amended, or the
Prospectus, as then 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 Securities Act or the
Exchange Act or the respective rules thereunder, the
Company promptly will (i) notify the Representative of
the happening of such event, (ii) prepare and file with
the Commission, subject to the first sentence of
paragraph (c) of this Section 8, an amendment or
supplement which will correct such statement or omission
or an amendment or supplement which will effect such
compliance and (iii) will supply any such amended or
supplemented Prospectus to the Representative in such
quantities as the Representative may reasonably request.
<PAGE>
<PAGE> 8
(e) As soon as practicable, the Company will make
generally available to its security holders and to the
Representative an earnings statement or statements of the
Company which will satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 under the
Securities Act.
(f) During a period of five years after the date
hereof, the Company will furnish to the Representative
copies of all reports and financial statements furnished
by the Company to each securities exchange on which
securities issued by the Company may be listed pursuant
to requirements of or agreements with such exchange or to
the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder.
(g) The Company will endeavor to qualify the
Underwritten Securities for sale under the laws of such
jurisdictions as the Representative may designate and
will maintain such qualifications in effect so long as
required for the distribution of the Underwritten
Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign
corporation or take any action which would subject it to
general or unlimited service of process in any
jurisdiction where it is not now so subject.
(h) The Company will pay the costs incident to the
authorization, issuance and delivery of the Underwritten
Securities and any taxes payable in that connection; the
costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement
and any amendments, supplements and exhibits thereto; the
costs of distributing the Registration Statement as
originally filed and each amendment and post-effective
amendment thereof (including exhibits), any Preliminary
Prospectus, the Prospectus and any documents incorporated
by reference in any of the foregoing documents; the costs of
producing this Agreement, the Delayed Delivery Contracts, if
any, and the Indenture; fees paid to rating agencies in
connection with the rating of the Securities, including
the Underwritten Securities; the fees and expenses of
qualifying the Underwritten Securities under the
securities laws of the several jurisdictions as provided
in this Paragraph and of preparing and printing a Blue
Sky Memorandum and a memorandum concerning the legality
of the Securities, including the Underwritten Securities,
as an investment (including fees of counsel to the
Underwriters); and all other costs and expenses incident
to the performance of the Company's obligations under
this Agreement; provided that, except as provided in this
Paragraph and in Paragraph 12 hereof, the Underwriters
shall pay their own costs and expenses, including the
fees and expenses of their counsel, any transfer taxes on
the Underwritten Securities which they may sell and the
expenses of advertising any offering of the Underwritten
Securities made by the Underwriters;
(i) Until the termination of the offering of the
Underwritten Securities, the Company will timely file all
documents, and any amendments to previously filed
documents, required to be filed by the <PAGE>
<PAGE> 9
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act; and
(j) During the period beginning on the date hereof
and continuing to the Delivery Date, the Company will not
offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company or any guarantees or
support obligations of debt securities of others, in any
case with maturities longer than one year, other than
Underwritten Securities to the Underwriters.
9. (a) The Company shall indemnify and hold harmless
each Underwriter and each person, if any, who controls
any Underwriter within the meaning of the Securities Act
from and against any loss, claim, damage or liability,
joint or several, and any action in respect thereof, to
which that Underwriter or controlling person may become
subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or arises out of, or is 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 shall
reimburse each Underwriter and such controlling person
for any legal and other expenses reasonably incurred
by that Underwriter or controlling person in
investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such
expenses are incurred (but no more frequently than
annually); provided, however, that the Company shall not
be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus in reliance upon and in conformity with
written information furnished to the Company through the
Representative by or on behalf of any Underwriter
specifically for use therein. The foregoing indemnity
agreement is in addition to any liability which the
Company may otherwise have to any Underwriter or
controlling person.
(b) Each Underwriter shall indemnify and hold
harmless the Company, each of their directors, each of
their officers who signed the Registration Statement and
any person who controls the Company within the meaning of
the Securities Act from and against any loss, claim,
damage or liability, joint or several, and any action in
respect thereof, to which the Company, or any such
director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or arises out of, or is 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, but in each case
only to the extent that the untrue <PAGE>
<PAGE> 10
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with
information furnished in writing to the Company through the
Representative by or on behalf of that Underwriter
specifically for use therein, and shall reimburse the
Company for any legal and other expenses reasonably
incurred by the Company or any such director, officer or
controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred (but no
more frequently than annually). The foregoing indemnity
agreement is in addition to any liability which any
Underwriter may otherwise have to the Company or any of
its directors, officers or controlling persons.
(c) Promptly after receipt by an indemnified party
under this Paragraph 9 of notice of any claim or the
commencement of any action, the indemnified party shall,
if a claim in respect thereof is to be made against the
indemnifying party under this Paragraph 9, notify the
indemnifying party in writing of the claim or the
commencement of that action, provided that the failure to
notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party
otherwise than under Paragraph 9(a) or 9(b). If any such
claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel
satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the
indemnified party under this Paragraph 9 for any legal or
other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying
party shall not elect to assume the defense of such
action, such indemnifying party will reimburse such
indemnified party for the reasonable fees and expenses of
any counsel retained by them. In the event that the
parties to any such action (including impleaded parties)
include both the Company and one or more Underwriters and
either (i) the indemnifying party or parties and
indemnified party or parties mutually agree or (ii)
representation of both the indemnifying party or parties
and the indemnified party or parties by the same counsel
is inappropriate under applicable standards of
professional conduct or in the opinion of such counsel
due to actual or potential differing interests between
them, then the indemnifying party shall not have the
right to assume the defense of such action on behalf of
such indemnified party and will reimburse such
indemnified party for the reasonable fees and expenses of
any counsel retained by them and satisfactory to the
indemnifying party, it being understood that the
indemnifying party shall not, in connection with any one
action or separate but similar or related actions in the
same jurisdiction arising out of the same general
allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate
firm of attorneys for all such indemnified parties, which
firm shall be designated in writing by the Representative
in the case of an action in<PAGE>
<PAGE> 11
which one or more Underwriters or controlling persons are
indemnified parties and by the Company in the case of an
action in which the Company or any of its directors, officers
or controlling persons are indemnified parties. The
indemnifying party or parties shall not be liable under this
Agreement with respect to any settlement made by any indemnified
party or parties without prior written consent by the indemnifying
party or parties to such settlement.
(d) If the indemnification provided for in this
Paragraph 9 shall for any reason be unavailable to an
indemnified party under Paragraph 9(a) or 9(b) hereof in
respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect
thereof, in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the
offering of the Underwritten Securities. If, however,
this allocation is not permitted by applicable law, then
each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of
such loss, claim, damage or liability, or action in
respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Underwriters, on
the other hand, from the offering of the Underwritten
Securities and the relative fault of the Company, on the
one hand, and the Underwriters, on the other hand, with
respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the
other hand, with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds
from the offering of the Underwritten Securities (before
deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by
the Underwriters with respect to such offering. The
relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a
material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties
and their relative knowledge, access to information and
opportunity to correct or prevent such statement or
omission. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to
above in this Paragraph 9(d) shall be deemed to include,
for purposes of this Paragraph 9(d), any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
Paragraph 9(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which
the total price at which the Underwritten Securities
underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages
which such Underwriter has otherwise paid or <PAGE>
<PAGE> 12
become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled
to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Paragraph 9(d)
are several in proportion to their respective underwriting
obligations and not joint.
(e) The agreements contained in this Paragraph 9
and the representations, warranties and agreements of the
Company in Paragraph 1 and Paragraph 8 hereof shall
survive the delivery of the Underwritten Securities and
shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified
party.
10. The obligations of the Underwriters under this
Agreement may be terminated by the Representative, in its
absolute discretion, by notice given to and received by the
Company prior to the delivery of and payment for the Immediate
Delivery Underwritten Securities, if, during the period
beginning on the date hereof to and including the Delivery
Date, (a) trading in securities generally on the New York
Stock Exchange, Inc. is suspended or materially limited, or
(b) a banking moratorium is declared by either Federal or New
York State authorities, or (c) there shall have occurred any
outbreak or material escalation of hostilities or other
calamity or crisis or the declaration by the United States of
war or a national emergency the effect of which on the
financial markets of the United States is material and adverse
and is such as to make it, in the reasonable judgment of the
Representative, impracticable or inadvisable to market such
Underwritten Securities on the terms and in the manner
contemplated by the Prospectus, or (d) the Company shall have
received notice that any rating of any of the Company's
unsecured senior debt securities, guarantees or support
obligations shall have been lowered by any nationally
recognized statistical rating organization (as defined in Rule
15c3-1 under the Exchange Act) or any such organization has
publicly announced that it has under surveillance or review,
with possible negative implications, the ratings of any of the
Company's unsecured senior debt securities, guarantees or
support obligations or (e) there shall have occurred any
change, or any development involving a prospective change, in
or affecting particularly the business or properties of the
Company or its subsidiaries which, in the Representative's reasonable
judgment, materially impairs the investment quality of the
Underwritten Securities.
11. The respective obligations of the Underwriters under
this Agreement with respect to the Underwritten Securities are
subject to the accuracy, on the date hereof and on the
Delivery Date, of the representations and warranties of the
Company contained herein, to performance by the Company of its
obligations hereunder, and to each of the following additional
terms and conditions applicable to the Underwritten
Securities:
(a) At or before the Delivery Date, no stop order
suspending the effectiveness of the Registration
Statement nor any order directed to any document
incorporated by reference in the Prospectus shall have
been<PAGE>
<PAGE> 13
issued and prior to that time no stop order proceeding shall
have been initiated or threatened by the Commission and no
challenge shall have been made by the Commission or its staff
as to the accuracy or adequacy of any document incorporated
by reference in the Prospectus; any request of the Commission
for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been
complied with; and after the date hereof the Company shall not
have filed with the Commission any amendment or supplement to
the Registration Statement or the Prospectus (or any
document incorporated by reference therein) that shall
have been disapproved by the Representative.
(b) No Underwriter shall have discovered and
disclosed to the Company on or prior to the Delivery Date
that the Registration Statement or the Prospectus
contains an untrue statement of a fact which is material
or omits to state a fact which is material and is
required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal
matters incident to the authorization, form and validity
of this Agreement, the Underwritten Securities and the
Indenture and the form of the Registration Statement, the
Prospectus (other than financial statements and other
financial data) and all other legal matters relating to
this Agreement and the transactions contemplated hereby
shall be satisfactory in all respects to Sullivan &
Cromwell, counsel for the Underwriters, and the Company
shall have furnished to such counsel all documents and
information that they may reasonably request to enable
them to pass upon such matters.
(d) The Senior Executive Vice President and General
Counsel to the Company shall have furnished to the
Representative his opinion addressed to the Underwriters
and dated the Delivery Date, as counsel, to the effect that:
(i) the Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware;
each material subsidiary of the Company has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation; and each of the
Company and its material subsidiaries has 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 wherein it owns or leases properties
or conducts business, except where the failure to so
qualify would not have a material adverse effect on
the Company and its subsidiaries taken as a whole;
(ii) the Indenture has been duly authorized,
executed and delivered, has been duly qualified
under the Trust Indenture <PAGE>
<PAGE> 14
Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance
with its terms (subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other
similar laws of general applicability relating to or
affecting creditors' rights generally from time to
time in effect and to general principles of equity);
(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, body or any arbitrator involving the
Company 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 by reference in
the Prospectus describing any legal proceedings or
material contracts or agreements relating to the
Company or any of its subsidiaries fairly summarize
such matters; the Underwritten Securities, the
Indenture and any Delayed Delivery Contracts conform
to the descriptions thereof contained under the
following (or comparable) captions of the Prospectus:
"Description of Debt Securities" and "Plan of
Distribution";
(iv) the Immediate Delivery Underwritten
Securities have been duly authorized, executed,
authenticated, issued and delivered and are valid
and legally binding obligations of the Company
entitled to the benefits of the Indenture;
(v) the Delayed Delivery Underwritten
Securities, if any, have been duly authorized and,
when executed, authenticated, issued and delivered
to, and paid for by, the respective purchasers
thereof in accordance with the Indenture and the
related Delayed Delivery Contracts, will be valid
and legally binding obligations of the Company
entitled to the benefits of the Indenture;
(vi) the Registration Statement and any
amendments thereto have become effective under the
Securities Act; 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, the
Prospectus and each amendment thereof or supplement
thereto as of their respective effective or issue
dates (other than the financial statements and other
financial and statistical information contained
therein as to which such counsel need express no
opinion) complied as to form in all material
respects with the applicable requirements of the
Securities Act, the Exchange Act and the Trust
Indenture Act and <PAGE>
<PAGE> 15
the respective rules and regulations thereunder; and
such counsel has no reason to believe that the
Registration Statement, or any amendment thereof, at
the time it became effective or at the date of this
Agreement or at the Delivery 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, at the date of this Agreement or at the
Delivery Date, included any untrue statement of a
material fact or omitted to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading;
(vii) this Agreement and the Delayed Delivery
Contracts, if any, have been duly authorized,
executed and delivered by the Company;
(viii) no order, consent, approval,
authorization, registration or qualification of or
with any governmental agency or body having
jurisdiction over the Company or any of its
properties is required for the issue and sale of the
Underwritten Securities or the consummation by the
Company of the transactions contemplated by this
Agreement or the Indenture, except such as have been
obtained under the Securities Act and the Trust
Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under state securities or Blue Sky
laws in connection with the sale and distribution of
the Underwritten Securities; and
(ix) neither the execution and delivery of
the Indenture, this Agreement or any Delayed
Delivery Contracts, the issue and sale of the
Underwritten Securities, nor the consummation of any
other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach
of, or constitute a default under, the charter or
by-laws of the Company or the terms of any indenture
or other agreement or instrument known to such
counsel and to which the Company or any of its
material subsidiaries is a party or by which the
Company, any such subsidiary or any of their assets
is bound, or any order or regulation known to such
counsel to be applicable to the Company or any such
subsidiary of any court, regulatory body,
administrative agency, governmental body or
arbitrator having jurisdiction over the Company or
any such subsidiary.
In rendering such opinion, such counsel may rely, as to
the execution of the Indenture by the Trustee, upon a
certificate of the Trustee setting forth the facts as to
such execution.
In rendering such opinion, such counsel may also rely (A)
as to matters involving the application of laws of any
jurisdiction other than the State of Delaware, upon the
opinion of other counsel of good standing believed to be
reliable, provided that such counsel states in such
<PAGE>
<PAGE> 16
opinion that such counsel and the Representative are
justified in relying upon the opinion of such other
counsel, and (B) as to matters or fact, to the extent
deemed proper, on certificates of responsible officers
of the Company and public officials.
In rendering such opinion with respect to clause (viii)
above, insofar as it relates to regulatory authorities in
the states in which the Company or any material
subsidiary operates, such counsel may rely on the
opinions of local counsel satisfactory to such counsel.
(e) The Representative shall have received from
Sullivan & Cromwell, counsel for the Underwriters, such
opinion or opinions, dated the date hereof, with respect
to the issuance and sale of the Underwritten Securities,
the Indenture, the Registration Statement, the Prospectus
and other related matters as the Representative may
reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the
Representative a certificate signed by its Chairman of
the Board or its President or a Senior Vice President
and its Treasurer or an Assistant Treasurer stating that
after reasonable investigation and to the best of their
knowledge:
(i) the representations and warranties of
the Company in this Agreement are true and correct
in all material respects on and as of the Delivery
Date with the same effect as if made on the Delivery
Date; 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 to purchase the
Underwritten Securities hereunder; and the
conditions set forth in Paragraphs 11(a) and 11(h)
have been fulfilled;
(ii) as of the date of the Prospectus, the
Registration Statement and the Prospectus did not
include any untrue statement of a material fact and
did not omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading; and
(iii) since the date of the most recent
financial statements included or incorporated by
reference in the Prospectus, there has been no
material adverse change in the condition (financial
or other), earnings, business or properties of the
Company or its subsidiaries, whether or not arising
from transactions in the ordinary course of
business, except as set forth in or contemplated in
the Prospectus.
(g) The Company shall have furnished to the
Representative (i) a letter of Ernst & Young, addressed
to the Board of Directors of the
<PAGE>
<PAGE> 17
Company and the Underwriters and dated the later of the
effective date of the Registration Statement or the date
of the filing of the Company's latest Annual Report on
Form 10-K, of the type described in the American Institute of
Certified Public Accountants' Statement on Auditing Standards
No. 49 and covering such financial statement items as counsel
for the Underwriters may reasonably have requested and
(ii) a letter of Ernst & Young, addressed to the
Underwriters and dated the Delivery Date, stating, as of
the date of such letter (or, with respect to matters
involving changes or developments since the respective
dates as of which specified financial information is
given in the Prospectus, as of a date not more than five
days prior to the date of such letter), the conclusions
and findings of such firm with respect to the financial
information and other matters covered by its letter
referred to in subclause (i) above and confirming in all
material respects the conclusions and findings set forth
in such prior letter.
(h) No order, consent, approval, authorization,
registration or qualification of or with any governmental
agency or body having jurisdiction over the Company or
any of its properties is required for the issue and sale
of the Underwritten Securities or the consummation by the
Company of the transactions contemplated by this
Agreement or the Indenture, except such as have been, or
will have been prior to the Delivery Date, obtained under
the Securities Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and
distribution of the Underwritten Securities by the
Underwriters.
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they
are in form and substance satisfactory to the Representative.
12. If the Company shall fail to tender the Immediate
Delivery Underwritten Securities for delivery to the
Underwriters for any reason permitted under this Agreement, or
if the Underwriters shall decline to purchase the Immediate
Delivery Underwritten Securities for any reason permitted
under this Agreement (other than pursuant to Paragraph 6 or
Paragraphs 10(a)-(d) hereof), the Company shall reimburse the
Underwriters for the reasonable fees and expenses of their
counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement
and the proposed purchase of Immediate Delivery Underwritten
Securities and the solicitation of any purchases of the Delayed
Delivery Underwritten Securities, and upon demand the Company shall
pay the full amount thereof to the Representative. If this
Agreement is terminated pursuant to Paragraph 6 hereof by
reason of the default of one or more Underwriters or pursuant
to Paragraphs 10(a)-(d) hereof, the Company shall not be
obligated to reimburse any Underwriter on account of those
expenses.
13. The Company shall be entitled to act and rely upon
any request, consent, notice or agreement by, or on behalf of,
the Representative. Any <PAGE>
<PAGE> 18
notice by the Company to the Underwriters shall be sufficient if
given in writing or by facsimile transmission confirmed promptly
in writing addressed to the Representative at its address set forth
in Schedule I hereto, and any notice by the Underwriters to the
Company shall be sufficient if given in writing or by facsimile
transmission confirmed promptly in writing addressed to the
Company at Southwestern Bell Corporation, 175 E. Houston Street,
7th Floor, San Antonio, Texas 78205-2233, Telecopy Number: (210)
351-3849, Attention of the Senior Vice President, Treasurer, and
Chief Financial Officer with a copy to the Senior Executive Vice
President and General Counsel, Southwestern Bell Corporation,
175 E. Houston Street, 13th Floor, San Antonio, Texas 78205-2233,
Telecopy Number: (210) 351-2298.
14. This Agreement shall be binding upon the
Underwriters, the Company and their respective successors.
This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control
any Underwriter within the meaning of Section 15 of the
Securities Act, and (b) the indemnity agreement of the
Underwriters contained in Paragraph 9 hereof shall be deemed
to be for the benefit of directors of the Company, officers of
the Company who have signed the Registration Statement and any
person controlling the Company. Nothing in this Agreement is
intended or shall be construed to give any person, other than
the persons referred to in this Paragraph 14, any legal or
equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
15. For purposes of this Agreement, "business day" means
any day on which the New York Stock Exchange, Inc. is open for
trading.
16. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together
constitute one and the same instrument.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF NEW YORK.
<PAGE>
<PAGE> 19
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this Agreement shall represent a
binding agreement between the Company and the several
Underwriters.
Very truly yours,
SOUTHWESTERN BELL CORPORATION
By: __________________________________
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
[NAME OF REPRESENTATIVE]
By: __________________________________
Title:
For itself and as Representative of the
several Underwriters named in Schedule II
to the foregoing Agreement.
<PAGE>
<PAGE> 20
SCHEDULE I
Underwriting Agreement dated ____________, 199_.
Registration Statement No. 33-_____
Representative(s) and Address(es):
Underwritten Securities:
Designation:
Principal Amount: $___,000,000
Date of Maturity:
Interest Rate: ____% per annum, payable semi-
annually on each _________ and
_________, commencing _________,
199_, to holders of record at the
close of business on the preceding
_________ or _________.
Purchase Price: ____% of the principal amount
thereof, plus accrued interest from
_________, 199_ to the date of
delivery.
Redemption Provisions:
Form and Authorized [The Securities will be issued only
Denominations: in registered, book-entry form in
denominations of $1,000 and integral
multiples thereof. The Securities
will be represented by a global
security or securities deposited
with, or on behalf of, The Depository
Trust Company, and registered in the
name of Cede & Co., as nominee for
The Depository Trust Company.]
Delivery Date, Time ______ a.m. (New York time),
and Location: _________, 199_, at the offices of
__________.
<PAGE>
<PAGE> 21
The Delayed Delivery [There are no Delayed Delivery
Contracts shall have Contracts.]
the following terms:
[Delivery Date:
Expiration Date:
Compensation to
Underwriters:
Minimum principal
amount of Underwritten
Securities to be sold
pursuant to any Delayed
Delivery Contract:
Maximum aggregate
principal amount of
Underwritten Securities
to be sold pursuant
to all delayed Delivery
Contracts:]
<PAGE>
<PAGE> 22
SCHEDULE II
Principal
Amount of
Underwritten
Name of Underwriter Securities
$
Total . . . . . . . $___________
<PAGE>
<PAGE> 23
EXHIBIT A
SOUTHWESTERN BELL CORPORATION
DELAYED DELIVERY CONTRACT
,199
Southwestern Bell Corporation
175 E. Houston Street
San Antonio, Texas 78502-2233
Dear Sirs:
The undersigned hereby agrees to purchase from
Southwestern Bell Corporation, a Delaware corporation (the
"Company"), and the Company hereby agrees to sell to the
undersigned, $ principal amount of the Company's above-
captioned securities ("Securities"), offered by the Company's
prospectus dated , 199 , as supplemented by the
prospectus supplement dated , 199 (collectively,
the "Prospectus"), receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal
amount thereof plus accrued interest from , 199
to the Delivery Date (as defined in the next paragraph) and on
the further terms and conditions set forth in this Contract.
Payment for and delivery of the Securities to be
purchased by the undersigned shall be made on
, 199 , herein called the "Delivery Date".
At 10:00 A.M., New York time, on the Delivery Date, the
Securities to be purchased by the undersigned hereunder will
be delivered by the Company to the undersigned, and the
undersigned will accept delivery of such Securities and will
make payment to the Company of the purchase price therefore at
the office of The Bank of New York. Payment will be by
certified or official bank check payable in next-day funds
settled through the New York Clearing House, or such other
Clearing House as the Company may designate, to or upon the
order of the Company. The Securities will be delivered in
such authorized forms and denominations and registered in such
names as the undersigned may designate by written or
telegraphic communication addressed to the Company not less
than two full business days prior to the Delivery Date or, if
the undersigned fails to make a timely designation in the
foregoing manner, in the form of one definitive fully
registered certificate representing the Securities in the
above principal amount, registered in the name of the
undersigned.
This Contract will terminate and be of no further force
and effect after , 199_, unless (i) on or
before such date it shall have been executed and delivered by
both parties hereto and (ii) the Company shall have sold to
the Underwriters named in the Prospectus the Immediate
Delivery <PAGE>
<PAGE 24>
Underwritten Securities (as defined in the Underwriting Agreement
referred to in the Prospectus). The Company will mail or deliver
to the undersigned at its address set forth below a notice to that
effect, stating the date of the occurrence thereof, accompanied by
copies of the opinion of counsel for the Company delivered to such
Underwriters pursuant to Paragraph 11(d) of the Underwriting
Agreement.
The obligation of the undersigned to accept delivery of
and make payment for the Securities on the Delivery Date will
be subject to the condition that the Securities shall not, on
the Delivery Date, be an investment prohibited by the laws of
the jurisdiction to which the undersigned is subject, the
undersigned hereby representing that such an investment is not
so prohibited on the date hereof.
This Contract will inure to the benefit of and be binding
upon the parties hereto and their respective successors but
will not be assignable by either party hereto without the
written consent of the other.
This Contract may be executed by any of the parties
hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
It is understood that acceptance of any Delayed Delivery
Contract (as defined in said Underwriting Agreement) is in the
Company's sole discretion and, without limiting the foregoing,
need not be on a first-come, first-served basis. If this
Contract is acceptable to the Company, it is requested that
the Company sign the form of acceptance below and mail or
deliver one of the <PAGE>
<PAGE> 25
counterparts hereof to the undersigned at its address set forth
below. This will become a binding contract between the Company
and the undersigned when such counterpart is so mailed or delivered.
Very truly yours,
By......................................
........................................
Title
........................................
........................................
Address
Accepted as of , 199
SOUTHWESTERN BELL CORPORATION
By.................................
Title:
<PAGE>
EXHIBIT 1.E
Draft of December 1, 1994
[Debt Securities]
SOUTHWESTERN BELL CAPITAL CORPORATION
DEBT SECURITIES
FORM OF UNDERWRITING AGREEMENT
(date)
To the Representative(s)
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Southwestern Bell Capital Corporation, a Delaware
corporation ("Capital Corporation"), may issue and sell from
time to time series of its debt securities registered under
the registration statement referred to in Paragraph 1(a)
hereof ("Securities" and individually "Security"). The
Securities will be entitled to the benefit of the Support
Agreement, dated as of November 10, 1986 (the "Support
Agreement"), between Capital Corporation and Southwestern Bell
Corporation, a Delaware corporation ("SBC"), pursuant to which
payment of principal of, premium, if any, and interest on the
Securities will be ensured by SBC; provided, however, that, as
provided in the Support Agreement, in no event may any holder
of Securities or other Lender (as defined in the Support
Agreement) have recourse to or against the stock or assets of
Southwestern Bell Telephone Company (the "Telephone Company")
or any interest of SBC or Capital Corporation in the Telephone
Company. The obligations of SBC pursuant to the Support
Agreement are herein referred to as the "Support Obligations."
The Securities will be issued under an Indenture, dated as of
February 1, 1987 and supplemented by a First Supplemental
Indenture dated as of October 1, 1990 (together, the
"Indenture"), among Capital Corporation, SBC and The Bank of
New York, as Trustee, in one or more series, which series may
vary as to interest rates, maturities, redemption provisions
and selling prices, with all such terms for any particular
series being determined at the time of sale. Capital
Corporation proposes to sell to the underwriters named in
Schedule II hereto ("Underwriters") for whom you are acting as
representative(s) ("Representative"), a series of Securities,
of the designation, with the terms and in the aggregate
principal amount specified in Schedule I hereto ("Underwritten
Securities" and, individually, "Underwritten Security").
1. Capital Corporation and SBC represent and warrant
to, and agree with, the several Underwriters that:
(a) A registration statement on Form S-3 with
respect to the Securities and with respect to the Support
Obligations has been prepared by Capital Corporation and
SBC in conformity with the requirements of the Securities
Act of 1933, as amended ("Securities Act"), and the rules
<PAGE>
<PAGE> 2
and regulations ("Rules and Regulations") of the
Securities and Exchange Commission ("Commission")
thereunder and has become effective. As used in this
Agreement, (i) "Registration Statement" means that
registration statement, as amended or supplemented to the
date hereof (including all documents incorporated therein
by reference); (ii) "Preliminary Prospectus" means each
prospectus (including all documents incorporated therein
by reference) included in that Registration Statement, or
amendments thereto or supplements thereof, before it
became effective under the Securities Act, including any
prospectus filed with the Commission pursuant to Rule
424(a) of the Rules and Regulations; (iii) "Basic
Prospectus" means the prospectus (including all documents
incorporated therein by reference) included in the
Registration Statement; and (iv) "Prospectus" means the
Basic Prospectus, together with any prospectus amendment
or supplement (including in each case all documents
incorporated therein by reference) specifically relating
to the Underwritten Securities, as filed with, or mailed
for filing to, the Commission pursuant to paragraph (b)
or (c) of Rule 424 of the Rules and Regulations. The
Commission has not issued any order preventing or
suspending the use of the Prospectus.
(b) The Registration Statement and each Prospectus
contain, and (in the case of any amendment or supplement
to any such document, or any material incorporated by
reference in any such document, filed with the Commission
after the date as of which this representation is being
made) will contain at all times during the period
specified in Paragraph 8(c) hereof, all statements which
are required by the Securities Act, the Securities
Exchange Act of 1934, as amended ("Exchange Act"), the
Trust Indenture Act of 1939, as amended ("Trust Indenture
Act"), and the rules and regulations of the Commission
under such Acts; the Indenture, including any amendments
and supplements thereto, pursuant to which the
Underwritten Securities will be issued and the Support
Agreement pursuant to which the Support Obligations are
created will conform with the requirements of the Trust
Indenture Act and the rules and regulations of the
Commission thereunder, and the Registration Statement and
the Prospectus do not, and (in the case of any amendment
or supplement to any such document, or any material
incorporated by reference in any such document, filed
with the Commission after the date as of which this
representation is being made) will not at any time during
the period specified in Paragraph 8(c) hereof, contain
any untrue statement of a material fact or omit to state
any material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided that neither Capital Corporation nor SBC makes
any representation or warranty as to information
contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with
information furnished in writing to Capital Corporation
and SBC through the Representative by or on behalf of any
Underwriter specifically for use therein, or as to any
statements in or omissions from the Statement of
Eligibility and Qualification of the Trustee under the
Indenture. Capital Corporation has been advised by the
Commission in a No-Action Letter that financial
information regarding Capital Corporation need not be
included in any registration statement on Form S-3 filed
by Capital
<PAGE>
<PAGE> 3
Corporation and SBC with respect to the Securities and
the Support Agreement. The Commission also stated in
such No-Action Letter that it will not raise any
objection if Capital Corporation does not file periodic
reports pursuant to Sections 13 and 15(d) of the
Exchange Act.
(c) Neither Capital Corporation nor SBC is in
violation of its corporate charter or bylaws or in
default under any agreement, indenture or instrument, the
effect of which violation or default would be material to
Capital Corporation or SBC; the execution, delivery and
performance of this Agreement and any Delayed Delivery
Contracts (as defined in Paragraph 3 hereof) and
compliance by Capital Corporation and SBC with the
provisions of the Underwritten Securities, the Indenture
and the Support Agreement will not conflict with, result
in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of Capital
Corporation, SBC or any of its material subsidiaries
pursuant to the terms of, or constitute a default under,
any agreement, indenture or instrument, or result in a
violation of the corporate charter or bylaws of Capital
Corporation or SBC or any order, rule or regulation of
any court or governmental agency having jurisdiction over
Capital Corporation or SBC; and except as required by the
Securities Act, the Trust Indenture Act and applicable
state securities laws, no consent, authorization or order
of, or filing or registration with, any court or
governmental agency is required for the execution,
delivery and performance of this Agreement, the Delayed
Delivery Contracts, if any, the Indenture and the Support
Agreement.
(d) Except as described in or contemplated by the
Registration Statement and the Prospectus, there shall
have not occurred any changes or any development
involving a prospective change, or affecting particularly
the business or properties of Capital Corporation, SBC or
its subsidiaries which materially impairs the investment
quality of the Underwritten Securities since the dates as
of which information is given in the Registration
Statement and the Prospectus.
(e) On the Delivery Date (as defined in Paragraph 7
hereof) (i) the Indenture will have been duly authorized,
executed and delivered by Capital Corporation and SBC and
will constitute the legally binding obligation of Capital
Corporation and SBC, enforceable in accordance with its
terms, (ii) the Underwritten Securities will have been
duly authorized and, upon payment therefor as provided in
this Agreement, will constitute legally binding
obligations of Capital Corporation entitled to the
benefits of the Indenture, (iii) the Support Agreement
will have been duly authorized, executed and delivered by
Capital Corporation and SBC and will constitute the
legally binding obligations of Capital Corporation and
SBC, (iv) the Support Obligations relating to the
Underwritten Securities, upon payment for the
Underwritten Securities as provided in this Agreement,
will constitute legally binding obligations of SBC
entitled to the benefits of the Indenture and the Support
Agreement, and (v) the Underwritten Securities, the
Indenture and the Support Agreement will conform to the
descriptions thereof contained in the Prospectus.
<PAGE>
<PAGE> 4
(f) Each of Capital Corporation, SBC and its
subsidiaries has been duly incorporated, is validly
existing as a corporation in good standing under the laws
of its jurisdiction of incorporation, 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 wherein it owns or
leases properties or conducts business, except where the
failure to so qualify would not have a material adverse
effect on SBC and its subsidiaries taken as a whole.
(g) Except as described in the Prospectus, there is
no material litigation or governmental proceeding pending
or, to the knowledge of Capital Corporation or SBC,
threatened against Capital Corporation, SBC or any of its
subsidiaries which is reasonably expected to result in
any material adverse change in the financial condition,
results of operations, business or prospects of SBC and
its subsidiaries taken as a whole or which is required to
be disclosed in the Registration Statement.
(h) The financial statements filed as part of the
Registration Statement or included in any Preliminary
Prospectus or the Prospectus present, or (in the case of
any amendment or supplement to any such document, or any
material incorporated by reference in any such document,
filed with the Commission after the date as of which this
representation is being made) will present at all times
during the period specified in Paragraph 8(c) hereof,
fairly, the consolidated financial condition and results
of operations of SBC and its subsidiaries, at the dates
and for the periods indicated, and have been, and (in the
case of any amendment or supplement to any such document,
or any material incorporated by reference in any such
document, filed with the Commission after the date as of
which this representation is being made) will be at all
times during the period specified in Paragraph 8(c)
hereof, prepared in conformity with generally accepted
accounting principles applied on a consistent basis
throughout the periods involved (except as described in
the notes thereto).
(i) The documents incorporated by reference into
any Preliminary Prospectus or the Prospectus have been,
and (in the case of any amendment or supplement to any
such document, or any material incorporated by reference
in any such document, filed with the Commission after the
date as of which this representation is being made) will
be, at all times during the period specified in Paragraph
8(c) hereof, prepared by SBC in conformity with the
applicable requirements of the Securities Act and the
Rules and Regulations and the Exchange Act and the rules
and regulations of the Commission thereunder and such
documents have been, or (in the case of any amendment or
supplement to any such document, or any material
incorporated by reference in any such document, filed
with the Commission after the date as of which this
representation is being made) will be at all times during
the period specified in Paragraph 8(c) hereof, timely
filed as required thereby.
<PAGE>
<PAGE> 5
(j) There are no contracts or other documents which
are required to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and
Regulations, or which were required to be filed as
exhibits to any document incorporated by reference in the
Prospectus by the Exchange Act or the rules and
regulations of the Commission thereunder, which have not
been filed as exhibits to the Registration Statement or
to such document or incorporated therein by reference as
permitted by the Rules and Regulations or the rules and
regulations of the Commission under the Exchange Act as
required.
2. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth,
Capital Corporation agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from Capital
Corporation, at the purchase price and on the other terms set
forth in Schedule I hereto, the principal amount of the
Underwritten Securities and related Support Obligations set
forth opposite its name in Schedule II hereto.
3. Any offer to purchase Underwritten Securities and
related Support Obligations by institutional investors
solicited by the Underwriters for delayed delivery shall be
made pursuant to contracts substantially in the form of
Exhibit A attached hereto, with such changes therein as
Capital Corporation, SBC and the Representative may approve
("Delayed Delivery Contracts"). Capital Corporation and SBC
shall each have the right, in their sole discretion, to
approve or disapprove each such institutional investor.
Underwritten Securities which are subject to Delayed Delivery
Contracts are herein sometimes called "Delayed Delivery
Underwritten Securities" and Underwritten Securities which are
not subject to Delayed Delivery Contracts are herein sometimes
called "Immediate Delivery Underwritten Securities".
Contemporaneously with the purchase on the Delivery Date
by the Underwriters of the Immediate Delivery Underwritten
Securities and related Support Obligations pursuant to this
Agreement, Capital Corporation will pay to the Representative,
for the account of the Underwriters, the compensation
specified in Schedule I hereto for arranging the sale of
Delayed Delivery Underwritten Securities. The Underwriters
shall have no responsibility with respect to the validity or
performance of any Delayed Delivery Contracts.
For the purpose of determining the principal amount of
Immediate Delivery Underwritten Securities to be purchased by
each Underwriter, there shall be deducted from the principal
amount of Underwritten Securities to be purchased by such
Underwriter as set forth in Schedule II hereto that portion of
the aggregate principal amount of Delayed Delivery
Underwritten Securities that the principal amount of
Underwritten Securities to be purchased by such Underwriter as
set forth in Schedule II hereto bears to the aggregate princi-
pal amount of Underwritten Securities set forth therein to be
purchased by all of the Underwriters (in each case as adjusted
by the Representative to avoid fractions of the minimum
principal amount in which the Underwritten Securities may be
issued), except to the extent that the Representative
determines, in its discretion, that such deduction shall be
otherwise than in such proportion and so advises Capital
Corporation.
<PAGE>
<PAGE> 6
4. [Reserved]
5. Capital Corporation shall not be obligated to
deliver any Underwritten Securities except upon payment for
all Immediate Delivery Underwritten Securities to be purchased
pursuant to this Agreement as hereinafter provided.
6. If any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-
defaulting Underwriters shall be obligated to purchase the
Immediate Delivery Underwritten Securities which the
defaulting Underwriter agreed but failed to purchase in the
respective proportions which the principal amount of
Underwritten Securities set forth in Schedule II hereto to be
purchased by each remaining non-defaulting Underwriter set
forth therein bears to the aggregate principal amount of
Underwritten Securities set forth therein to be purchased by
all the remaining non-defaulting Underwriters; provided that
the remaining non-defaulting Underwriters shall not be
obligated to purchase any Immediate Delivery Underwritten
Securities if the aggregate principal amount of Immediate
Delivery Underwritten Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase
exceeds 9.09% of the total principal amount of Underwritten
Securities, and any remaining non-defaulting Underwriter shall
not be obligated to purchase more than 110% of the principal
amount of Underwritten Securities set forth in Schedule II
hereto to be purchased by it. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those
other underwriters satisfactory to the Representative who so
agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them,
all the Immediate Delivery Underwritten Securities. If the
remaining Underwriters or other underwriters satisfactory to
the Representative do not elect to purchase the Immediate
Delivery Underwritten Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase,
this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter, Capital Corporation or SBC,
except that Capital Corporation will continue to be liable for
the payment of expenses as set forth in Paragraph 8(h) hereof
and SBC will continue to have Support Obligations with respect
to such expenses as set forth in Paragraph 8(h) hereof.
Nothing contained in this Paragraph 6 shall relieve a
defaulting Underwriter of any liability it may have to Capital
Corporation or SBC for damages caused by its default. If
other Underwriters are obligated or agree to purchase the
Immediate Delivery Underwritten Securities of a defaulting or
withdrawing Underwriter, either the Representative, on the one
hand, or Capital Corporation and SBC, on the other hand, may
postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of Capital
Corporation, SBC or the Representative may be necessary in the
Registration Statement, the Prospectus or in any other document or
arrangement.
7. Delivery of and payment for the Immediate Delivery
Underwritten Securities shall be made at such address, date
and time as may be specified in Schedule I hereto. This date
and time are sometimes referred to as the "Delivery Date." On
the Delivery Date, Capital Corporation shall deliver the
<PAGE>
<PAGE> 7
Immediate Delivery Underwritten Securities to the
Representative for the account of each Underwriter against
payment to or upon the order of Capital Corporation of the
purchase price by certified or official bank check or checks
payable in next-day funds settled through the New York
Clearing House or such other Clearing House as is named in
Schedule I. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Immediate Delivery Underwritten
Securities shall be in such form or forms and in such
denominations as may be set forth in Schedule I. Immediate
Delivery Underwritten Securities in registered form shall be
in such authorized denominations and registered in such names
as the Representative shall request in writing not less than
two full business days prior to the Delivery Date. For the
purpose of expediting the checking and packaging of the
Immediate Delivery Underwritten Securities, Capital Corpora-
tion shall make the Immediate Delivery Underwritten Securities
available for inspection by the Representative in New York,
New York not later than 2:00 P.M., local time, on the business
day prior to the Delivery Date.
8. Capital Corporation and SBC each agrees with the
several Underwriters that:
(a) Capital Corporation and SBC will furnish
promptly to the Representative and to counsel for the
Underwriters signed copies of the Registration Statement
as originally filed and each amendment and supplement
thereto filed prior to the date hereof and relating to or
covering the Underwritten Securities and related Support
Obligations, and a copy of the Prospectus filed with the
Commission, including all documents incorporated therein
by reference and all consents and exhibits filed
therewith;
(b) Capital Corporation and SBC will deliver
promptly to the Representative such reasonable number of
the following documents as the Representative may
request: (i) conformed copies of the Registration
Statement (excluding exhibits other than the computation
of the ratio of earnings to fixed charges, the Indenture,
the Support Agreement and this Agreement), (ii) the
Prospectus and (iii) any documents incorporated by
reference in the Prospectus;
(c) During any period when a Prospectus relating to
the Underwritten Securities is required by law to be
delivered, neither Capital Corporation nor SBC will file
any amendment of the Registration Statement nor will
either file any amendment or supplement to the Prospectus
(except for (i) an amendment or supplement consisting
solely of the filing of a document under the Exchange Act
or (ii) a supplement relating to an offering of
securities other than the Underwritten Securities),
unless Capital Corporation and SBC have furnished the
Representative a copy of such proposed amendment or
supplement for its review prior to filing and neither
Capital Corporation nor SBC will file any such proposed
amendment or supplement to which the Representative
reasonably objects. Subject to the foregoing sentence,
Capital Corporation and SBC will cause the Prospectus and
any amendment or supplement
<PAGE>
<PAGE> 8
thereto to be filed with the Commission as required pursuant to Rule 424
under the Securities Act. Capital Corporation and SBC will promptly
advise the Representative (i) when the Prospectus or any amendment or
supplement thereto shall have been filed with the Commission pursuant to
Rule 424 under the Securities Act, (ii) when any amendment of the
Registration Statement shall have become effective, (iii) of any request
by the Commission for any amendment of the Registration Statement or
amendment of 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 threatening of any proceeding for that purpose and (v) of
the receipt by Capital Corporation or SBC of any notification with
respect to the suspension of the qualification of the Underwritten
Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. Capital Corporation and SBC will
promptly (upon filing thereof) furnish the Representative a copy of any
amendment or supplement to the Prospectus or Registration Statement not
furnished to the Representative for prior review pursuant to exceptions
(i) or (ii) of the first sentence of this subsection (a). Capital
Corporation and SBC will use their best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(d) If, at any time when a prospectus relating to
the Underwritten Securities is required to be delivered
under the Securities Act, any event occurs as a result of
which the Registration Statement, as then amended, or the
Prospectus, as then 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 Securities Act or the Exchange Act or the
respective rules thereunder, Capital Corporation and SBC
promptly will (i) notify the Representative of the
happening of such event, (ii) prepare and file with the
Commission, subject to the first sentence of paragraph
(c) of this Section 8, an amendment or supplement which
will correct such statement or omission or an amendment
or supplement which will effect such compliance and (iii)
will supply any such amended or supplemented Prospectus
to the Representative in such quantities as the
Representative may reasonably request.
(e) As soon as practicable, Capital Corporation and
SBC will each make generally available to its security
holders and to the Representative an earnings statement
or statements of SBC which will satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 under
the Securities Act.
(f) During a period of five years after the date
hereof, Capital Corporation and SBC will furnish to the
Representative copies of all reports and financial
statements furnished by Capital Corporation or SBC to each
securities exchange on which securities issued by
Capital Corpo-
<PAGE>
<PAGE> 9
ration or SBC may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission
thereunder.
(g) Capital Corporation and SBC will endeavor to
qualify the Underwritten Securities for sale under the
laws of such jurisdictions as the Representative may
designate and will maintain such qualifications in effect
so long as required for the distribution of the
Underwritten Securities, provided that in connection
therewith neither Capital Corporation nor SBC shall be
required to qualify as a foreign corporation or take any
action which would subject it to general or unlimited
service of process in any jurisdiction where it is not
now so subject.
(h) Capital Corporation will pay the costs incident
to the authorization, issuance and delivery of the
Underwritten Securities and related Support Obligations
and any taxes payable in that connection; the costs
incident to the preparation, printing and filing under
the Securities Act of the Registration Statement and any
amendments, supplements and exhibits thereto; the costs
of distributing the Registration Statement as originally
filed and each amendment and post-effective amendment
thereof (including exhibits), any Preliminary Prospectus,
the Prospectus and any documents incorporated by reference
in any of the foregoing documents; the costs of producing this
Agreement, the Delayed Delivery Contracts, if any, the
Indenture and the Support Agreement; fees paid to rating
agencies in connection with the rating of the Securities,
including the Underwritten Securities and the rating of
the Support Obligations; the fees and expenses of
qualifying the Underwritten Securities and related
Support Obligations under the securities laws of the
several jurisdictions as provided in this Paragraph and
of preparing and printing a Blue Sky Memorandum and a
memorandum concerning the legality of the Securities,
including the Underwritten Securities, or of the Support
Obligations as an investment (including fees of counsel
to the Underwriters); and all other costs and expenses
incident to the performance of the obligations of Capital
Corporation and SBC under this Agreement; provided that,
except as provided in this Paragraph and in Paragraph 12
hereof, the Underwriters shall pay their own costs and
expenses, including the fees and expenses of their
counsel, any transfer taxes on the Underwritten
Securities and related Support Obligations which they may
sell and the expenses of advertising any offering of the
Underwritten Securities and related Support Obligations
made by the Underwriters (it being understood and agreed
that Capital Corporation's obligations to pay costs and
expenses under this subparagraph shall be deemed to be
"other obligations" of Capital Corporation entitled to
the benefits of the Support Agreement);
(i) Until the termination of the offering of the
Underwritten Securities and related Support Obligations,
Capital Corporation and SBC will timely file all
documents, and any amendments to previously filed
documents, required to be filed by Capital Corporation or
SBC pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act; and
<PAGE>
<PAGE> 10
(j) During the period beginning on the date hereof
and continuing to the Delivery Date, neither Capital
Corporation nor SBC will offer, sell, contract to sell or
otherwise dispose of any debt securities of Capital
Corporation, any debt securities of SBC, or any Support
Obligations or other support obligations or guarantees by
SBC of debt securities of others, in any case with
maturities longer than one year, other than Underwritten
Securities and related Support Obligations to the
Underwriters.
9. (a) Capital Corporation and SBC shall jointly and
severally indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter
within the meaning of the Securities Act from and against
any loss, claim, damage or liability, joint or several, and
any action in respect thereof, to which that Underwriter or
controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or arises
out of, or is 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 shall reimburse each
Underwriter and such controlling person for any legal and
other expenses reasonably incurred by that Underwriter or
controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred (but no
more frequently than annually); provided, however, that
neither Capital Corporation nor SBC shall be liable in
any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus
in reliance upon and in conformity with written
information furnished to the Company through the
Representative by or on behalf of any Underwriter
specifically for use therein. The foregoing indemnity
agreement is in addition to any liability which Capital
Corporation and SBC may otherwise have to any Underwriter
or controlling person.
(b) Each Underwriter shall indemnify and hold
harmless Capital Corporation and SBC, each of their
directors, each of their officers who signed the
Registration Statement and any person who controls
Capital Corporation or SBC within the meaning of the
Securities Act from and against any loss, claim, damage
or liability, joint or several, and any action in respect
thereof, to which Capital Corporation, SBC or any such
director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or arises out of, or is based upon, the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to
<PAGE>
<PAGE> 11
make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information
furnished in writing to Capital Corporation or SBC
through the Representative by or on behalf of that Underwriter
specifically for use therein, and shall reimburse Capital
Corporation and SBC for any legal and other expenses reasonably
incurred by Capital Corporation, SBC or any such director,
officer or controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred (but no
more frequently than annually). The foregoing indemnity
agreement is in addition to any liability which any
Underwriter may otherwise have to Capital Corporation,
SBC or any of their directors, officers or controlling
persons.
(c) Promptly after receipt by an indemnified party
under this Paragraph 9 of notice of any claim or the
commencement of any action, the indemnified party shall,
if a claim in respect thereof is to be made against the
indemnifying party under this Paragraph 9, notify the
indemnifying party in writing of the claim or the
commencement of that action, provided that the failure to
notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party
otherwise than under Paragraph 9(a) or 9(b). If any such
claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel
satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the
indemnified party under this Paragraph 9 for any legal or
other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying
party shall not elect to assume the defense of such
action, such indemnifying party will reimburse such
indemnified party for the reasonable fees and expenses of
any counsel retained by them. In the event that the
parties to any such action (including impleaded parties)
include Capital Corporation or SBC, on the one hand, and
one or more Underwriters, on the other hand, and either
(i) the indemnifying party or parties and indemnified
party or parties mutually agree or (ii) representation of
both the indemnifying party or parties and the
indemnified party or parties by the same counsel is
inappropriate under applicable standards of professional
conduct or in the opinion of such counsel due to actual
or potential differing interests between them, then the
indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified
party and will reimburse such indemnified party for the
reasonable fees and expenses of any counsel retained by
them and satisfactory to the indemnifying party, it being
understood that the indemnifying party shall not, in
connection with any one action or separate but similar or
related actions in the same jurisdiction arising
<PAGE>
<PAGE> 12
out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate
firm of attorneys for all such indemnified parties, which
firm shall be designated in writing by the Representative
in the case of an action in which one or more
Underwriters or controlling persons are indemnified
parties and by Capital Corporation or SBC in the case of
an action in which Capital Corporation or SBC or any of
their directors, officers or controlling persons are
indemnified parties. The indemnifying party or parties
shall not be liable under this Agreement with respect to
any settlement made by any indemnified party or parties
without prior written consent by the indemnifying party
or parties to such settlement.
(d) If the indemnification provided for in this
Paragraph 9 shall for any reason be unavailable to an
indemnified party under Paragraph 9(a) or 9(b) hereof in
respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect
thereof, in such proportion as is appropriate to reflect
the relative benefits received by Capital Corporation and
SBC, on the one hand, and the Underwriters, on the other
hand, from the offering of the Underwritten Securities
and related Support Obligations. If, however, this
allocation is not permitted by applicable law, then each
indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other hand,
from the offering of the Underwritten Securities and the
relative fault of Capital Corporation and SBC, on the one
hand, and the Underwriters, on the other hand, with
respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by
Capital Corporation and SBC, on the one hand, and the
Underwriters, on the other hand, with respect to such
offering shall be deemed to be in the same proportion as
the total net proceeds from the offering of the
Underwritten Securities and related Support Obligations
(before deducting expenses) received by Capital Corporation
bear to the total underwriting discounts and commissions
received by the Underwriters with respect to such offering.
The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a
material fact relates to information supplied by Capital
Corporation and SBC or the Underwriters, the intent of
the parties and their relative knowledge, access to
information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to
above in this Paragraph 9(d) shall be deemed to include,
for purposes of this Paragraph 9(d), any legal or other
expenses reasonably incurred by such indemnified party in<PAGE>
<PAGE> 13
connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
Paragraph 9(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which
the total price at which the Underwritten Securities and
related Support Obligations underwritten by it and
distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to
contribute as provided in this Paragraph 9(d) are several
in proportion to their respective underwriting
obligations and not joint.
(e) The agreements contained in this Paragraph 9
and the representations, warranties and agreements of
Capital Corporation and SBC in Paragraph 1 and Paragraph
8 hereof shall survive the delivery of the Underwritten
Securities and related Support Obligations and shall
remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified
party.
10. The obligations of the Underwriters under this Agreement may be
terminated by the Representative, in its absolute discretion, by notice given
to and received by Capital Corporation and SBC prior to the delivery of and
payment for the Immediate Delivery Underwritten Securities and related Support
Obligations, if, during the period beginning on the date hereof to and
including the Delivery Date, (a) trading in securities generally on the New
York Stock Exchange, Inc. is suspended or materially limited, or (b) a banking
moratorium is declared by either Federal or New York State authorities, or (c)
there shall have occurred any outbreak or material escalation of hostilities
or other calamity or crisis or the declaration by the United States of war or
a national emergency the effect of which on the financial markets of the
United States is material and adverse and is such as to make it, in the
reasonable judgment of the Representative, impracticable or inadvisable to
market such Underwritten Securities on the terms and in the manner
contemplated by the Prospectus, or (d) Capital Corporation or SBC shall have
received notice that any rating of any of Capital Corporation's unsecured
senior debt securities, SBC's unsecured senior debt securities or SBC's
Support Obligations or other support obligations or guarantees of debt
securities of others shall have been lowered by any nationally recognized
statistical rating organization (as defined in Rule 15c3-1 under the Exchange
Act) or any such organization has publicly announced that it has under
surveillance or review, with possible negative implications, the ratings of
any of Capital Corporation's unsecured senior debt securities, SBC's unsecured
senior debt securities or SBC's Support Obligations or other support
obligations or guarantees of debt securities of others or (e) there shall have
occurred any change, or any development involving a prospective change, in or
affecting particularly the business or properties of Capital Corporation, SBC
or its subsidiaries which, in the Representative's reasonable judgment,
<PAGE>
<PAGE> 14
materially impairs the investment quality of the Underwritten Securities or
related Support Obligations.
11. The respective obligations of the Underwriters under this Agree-
ment with respect to the Underwritten Securities and related Support
Obligations are subject to the accuracy, on the date hereof and on the
Delivery Date, of the representations and warranties of Capital Corporation
and SBC contained herein, to performance by Capital Corporation and SBC of
their obligations hereunder, and to each of the following additional terms and
conditions applicable to the Underwritten Securities and related Support
Obligations:
(a) At or before the Delivery Date, no stop order
suspending the effectiveness of the Registration
Statement nor any order directed to any document
incorporated by reference in the Prospectus shall have
been issued and prior to that time no stop order
proceeding shall have been initiated or threatened by the
Commission and no challenge shall have been made by the
Commission or its staff as to the accuracy or adequacy of
any document incorporated by reference in the Prospectus;
any request of the Commission for inclusion of additional
information in the Registration Statement or the
Prospectus or otherwise shall have been complied with;
and after the date hereof Capital Corporation and SBC
shall not have filed with the Commission any amendment or
supplement to the Registration Statement or the Prospectus
(or any document incorporated by reference therein) that
shall have been disapproved by the Representative.
(b) No Underwriter shall have discovered and
disclosed to Capital Corporation or SBC on or prior to
the Delivery Date that the Registration Statement or the
Prospectus contains an untrue statement of a fact which
is material or omits to state a fact which is material
and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c) All corporate proceedings and other legal
matters incident to the authorization, form and validity
of this Agreement, the Underwritten Securities, the
related Support Obligations, the Indenture and the
Support Agreement and the form of the Registration
Statement, the Prospectus (other than financial
statements and other financial data) and all other legal
matters relating to this Agreement and the transactions
contemplated hereby shall be satisfactory in all respects
to Sullivan & Cromwell, counsel for the Underwriters, and
Capital Corporation and SBC shall have furnished to such
counsel all documents and information that they may
reasonably request to enable them to pass upon such
matters.
(d) Counsel to Capital Corporation shall have
furnished to the Representative his opinion addressed to
the Underwriters and dated the Delivery Date, as counsel,
to the effect that:
<PAGE>
<PAGE> 15
(i) Capital Corporation has been duly
incorporated and is validly existing as a
corporation in good standing under the laws of the
State of Delaware; and Capital Corporation has 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 wherein it owns or leases properties
or conducts business, except where the failure to so
qualify would not have a material adverse effect on
Capital Corporation;
(ii) each of the Indenture and the Support
Agreement has been duly authorized, executed and
delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and
binding instrument enforceable against Capital
Corporation in accordance with its terms (subject,
as to enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws of
general applicability relating to or affecting
creditors' rights generally from time to time in
effect and to general principles of equity);
(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, body or any arbitrator involving Capital
Corporation 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 by reference in the Prospectus
describing any legal proceedings or material
contracts or agreements relating to Capital
Corporation fairly summarize such matters; the
Underwritten Securities, the Indenture, the Support
Agreement and any Delayed Delivery Contracts conform
to the descriptions thereof contained under the
following (or comparable) captions of the
Prospectus: "Description of Debt Securities" and
"Plan of Distribution";
(iv) the Immediate Delivery Underwritten
Securities have been duly authorized, executed,
authenticated, issued and delivered and are valid
and legally binding obligations of Capital
Corporation entitled to the benefits of the
Indenture and the Support Agreement;
(v) the Delayed Delivery Underwritten
Securities, if any, have been duly authorized and,
when executed, authenticated, issued and delivered
to, and paid for by, the respective purchasers
thereof in accordance with the Indenture and the
related Delayed Delivery Contracts, will be valid
and legally binding
<PAGE>
<PAGE> 16
obligations of Capital Corporation entitled to
the benefits of the Indenture and the Support
Agreement;
(vi) this Agreement and the Delayed Delivery
Contracts, if any, have been duly authorized,
executed and delivered by Capital Corporation;
(vii) no order, consent, approval,
authorization, registration or qualification of or
with any governmental agency or body having jurisdiction
over Capital Corporation or any of its properties is
required for the issue and sale of the Underwritten
Securities or the consummation by Capital
Corporation of the transactions contemplated by this
Agreement, the Indenture or the Support Agreement,
except such as have been obtained under the
Securities Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations
or qualifications as may be required under state
securities or Blue Sky laws in connection with the
sale and distribution of the Underwritten Securities
and related Support Obligations; and
(viii) neither the execution and delivery of
the Indenture, the Support Agreement, this Agreement
or any Delayed Delivery Contracts, the issue and
sale of the Underwritten Securities and related
Support Obligations, nor the consummation of any
other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach
of, or constitute a default under, the charter or
by-laws of Capital Corporation or the terms of any
indenture or other agreement or instrument known to
such counsel and to which Capital Corporation is a
party or by which Capital Corporation or any of its
assets is bound, or any order or regulation known to
such counsel to be applicable to Capital Corporation
of any court, regulatory body, administrative
agency, governmental body or arbitrator having
jurisdiction over Capital Corporation.
In rendering such opinion, such counsel may rely, as to
the execution of the Indenture by the Trustee, upon a
certificate of the Trustee setting forth the facts as to
such execution.
In rendering such opinion, such counsel may also rely (A)
as to matters involving the application of laws of any
jurisdiction other than the State of Delaware, upon the
opinion of other counsel of good standing believed to be
reliable, provided that such counsel states in such
opinion that such counsel and the Representative are
justified in relying upon the opinion of such other
counsel, and (B) as to matters or fact, to the extent
deemed proper, on certificates of responsible officers of
Capital Corporation and public officials.
In rendering such opinion with respect to clause (vii) above,
insofar as it relates to regulatory authorities in the states
in which Capital<PAGE>
<PAGE> 17
Corporation operates, such counsel may rely on the opinions
of local counsel satisfactory to such counsel.
(e) The Senior Executive Vice President and General
Counsel to SBC shall have furnished to the Representative
his opinion addressed to the Underwriters and dated the
Delivery Date, as counsel, to the effect that:
(i) SBC has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Delaware; each
material subsidiary of SBC has been duly
incorporated and is validly existing as a corpora-
tion in good standing under the laws of the
jurisdiction of its incorporation; and each of SBC
and its material subsidiaries has 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 wherein it owns or leases properties
or conducts business, except where the failure to so
qualify would not have a material adverse effect on
SBC and its subsidiaries taken as a whole;
(ii) each of the Indenture and the Support
Agreement has been duly authorized, executed and
delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and
binding instrument enforceable against SBC in
accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general
applicability relating to or affecting creditors'
rights generally from time to time in effect and to
general principles of equity);
(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, body or any arbitrator involving SBC 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 by reference in the Prospectus
describing any legal proceedings or material
contracts or agreements relating to SBC or any of its
subsidiaries fairly summarize such matters; the
Underwritten Securities, the Indenture, the Support
Agreement and any Delayed Delivery Contracts conform
to the descriptions thereof contained under the
following (or comparable) captions of the
Prospectus: "Description of Debt Securities" and
"Plan of Distribution";
<PAGE>
<PAGE> 18
(iv) the Support Obligations relating to the
Immediate Delivery Underwritten Securities have been
duly authorized, and are valid and legally binding
obligations of SBC entitled to the benefits of the
Indenture and the Support Agreement;
(v) the Support Obligations relating to the
Delayed Delivery Underwritten Securities, if any,
have been duly authorized and, when such Delayed
Delivery Underwritten Securities are executed,
authenticated, issued and delivered to, and paid for
by, the respective purchasers thereof in accordance
with the Indenture and the related Delayed Delivery
Contracts, will be valid and legally binding
obligations of SBC entitled to the benefits of the
Indenture and the Support Agreement;
(vi) the Registration Statement and any
amendments thereto have become effective under the
Securities Act; 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, the
Prospectus and each amendment thereof or supplement
thereto as of their respective effective or issue
dates (other than the financial statements and other
financial and statistical information contained
therein as to which such counsel need express no
opinion) complied as to form in all material
respects with the applicable requirements of the
Securities Act, the Exchange Act and the Trust
Indenture Act and the respective rules and
regulations thereunder; and such counsel has no
reason to believe that the Registration Statement,
or any amendment thereof, at the time it became
effective or at the date of this Agreement or at the
Delivery 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, at the date of this Agreement or at the
Delivery Date, included any untrue statement of a
material fact or omitted to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were made,
not misleading;
(vii) this Agreement and the Delayed Delivery
Contracts, if any, have been duly authorized,
executed and delivered by SBC;
(viii) no order, consent, approval,
authorization, registration or qualification of or
with any governmental agency or body having
jurisdiction over SBC or any of its properties is
required for the issue of the Support Obligations
relating to the Underwritten Securities or the
consummation by SBC of the transactions contemplated
by this Agreement, the Indenture or the Support
Agreement, except such as have been obtained under
the Securities Act and the Trust Indenture Act and
such consents, approvals, authorizations,
registrations or qualifications as may be required
under state securities or Blue Sky laws in
connection <PAGE>
<PAGE> 19
with the sale and distribution of the Underwritten
Securities and related Support Obligations; and
(ix) neither the execution and delivery of
the Indenture, the Support Agreement, this Agreement
or any Delayed Delivery Contracts, the issue and
sale of the Underwritten Securities and related
Support Obligations, nor the consummation of any
other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach
of, or constitute a default under, the charter or
by-laws of SBC or the terms of any indenture or
other agreement or instrument known to such counsel
and to which SBC or any of its material subsidiaries
is a party or by which SBC, any such subsidiary or
any of their assets is bound, or any order or
regulation known to such counsel to be applicable to
SBC or any such subsidiary of any court, regulatory
body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or
any such subsidiary.
In rendering such opinion, such counsel may rely, as to
the execution of the Indenture by the Trustee, upon a
certificate of the Trustee setting forth the facts as to
such execution.
In rendering such opinion, such counsel may also rely (A)
as to matters involving the application of laws of any
jurisdiction other than the State of Delaware, upon the
opinion of other counsel of good standing believed to be
reliable, provided that such counsel states in such
opinion that such counsel and the Representative are
justified in relying upon the opinion of such other
counsel, and (B) as to matters or fact, to the extent
deemed proper, on certificates of responsible officers of
the Company and public officials.
In rendering such opinion with respect to clause (viii)
above, insofar as it relates to regulatory authorities in
the states in which the Company or any material
subsidiary operates, such counsel may rely on the
opinions of local counsel satisfactory to such counsel.
(f) The Representative shall have received from
Sullivan & Cromwell, counsel for the Underwriters, such
opinion or opinions, dated the date hereof, with respect
to the issuance and sale of the Underwritten Securities
and related Support Obligations, the Indenture, the
Registration Statement, the Prospectus and other related
matters as the Representative may reasonably require, and
Capital Corporation and SBC shall have furnished to such
counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(g) Each of Capital Corporation and SBC shall have
furnished to the Representative a certificate signed by
its Chairman of the Board or its President or a Senior
Vice President and its Treasurer or an Assistant
Treasurer stating that after reasonable investigation and
to the best of their knowledge;
<PAGE>
<PAGE> 20
(i) the representations and warranties of
Capital Corporation or SBC, as the case may be, in
this Agreement are true and correct in all material
respects on and as of the Delivery Date with the
same effect as if made on the Delivery Date; Capital
Corporation or SBC, as the case may be, 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
to purchase the Underwritten Securities and related
Support Obligations hereunder; and the conditions
set forth in Paragraphs 11(a) and 11(i) have been
fulfilled;
(ii) as of the date of the Prospectus, the
Registration Statement and the Prospectus did not
include any untrue statement of a material fact and
did not omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading; and
(iii) since the date of the most recent
financial statements included or incorporated by
reference in the Prospectus, there has been no
material adverse change in the condition (financial
or other), earnings, business or properties of
Capital Corporation, SBC or its subsidiaries,
whether or not arising from transactions in the
ordinary course of business, except as set forth in
or contemplated in the Prospectus.
(h) Capital Corporation and SBC shall have
furnished to the Representative (i) a letter of Ernst &
Young, addressed to the Boards of Directors of Capital
Corporation and SBC and the Underwriters and dated the
later of the effective date of the Registration Statement
or the date of the filing of SBC's latest Annual Report
on Form 10-K, of the type described in the American
Institute of Certified Public Accountants' Statement on
Auditing Standards No. 49 and covering such financial
statement items as counsel for the Underwriters may
reasonably have requested and (ii) a letter of Ernst &
Young, addressed to the Underwriters and dated the
Delivery Date, stating, as of the date of such letter
(or, with respect to matters involving changes or
developments since the respective dates as of which
specified financial information is given in the
Prospectus, as of a date not more than five days prior to
the date of such letter), the conclusions and findings of
such firm with respect to the financial information and
other matters covered by its letter referred to in sub-
clause (i) above and confirming in all material respects
the conclusions and findings set forth in such prior
letter.
(i) No order, consent, approval, authorization,
registration or qualification of or with any governmental
agency or body having jurisdiction over Capital
Corporation, SBC or any of their properties is required
for the issue and sale of the Underwritten Securities and
related Support Obligations or the consummation by
Capital Corporation and SBC of the transactions
contemplated by this Agreement, the Indenture or the
Support Agreement, except such as have been, or will <PAGE>
<PAGE> 21
have been prior to the Delivery Date, obtained under the
Securities Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and
distribution of the Underwritten Securities and related
Support Obligations by the Underwriters.
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in
form and substance satisfactory to the Representative.
12. If Capital Corporation shall fail to tender the
Immediate Delivery Underwritten Securities for delivery to the
Underwriters for any reason permitted under this Agreement, or
if the Underwriters shall decline to purchase the Immediate
Delivery Underwritten Securities for any reason permitted
under this Agreement (other than pursuant to Paragraph 6 or
Paragraphs 10(a)-(d) hereof), Capital Corporation shall
reimburse the Underwriters for the reasonable fees and
expenses of their counsel and for such other out-of-pocket
expenses as shall have been incurred by them in connection
with this Agreement and the proposed purchase of Immediate
Delivery Underwritten Securities and the solicitation of any
purchases of the Delayed Delivery Underwritten Securities, and
upon demand Capital Corporation shall pay the full amount
thereof to the Representative (it being understood and agreed
that the Capital Corporation's obligations to pay costs and
expenses under this Paragraph shall be deemed to be "other
obligations" of Capital Corporation entitled to the benefits
of the Support Agreement). If this Agreement is terminated
pursuant to Paragraph 6 hereof by reason of the default of one
or more Underwriters or pursuant to Paragraphs 10(a)-(d)
hereof, Capital Corporation shall not be obligated to
reimburse any Underwriter on account of those expenses.
13. Capital Corporation and SBC shall be entitled to act
and rely upon any request, consent, notice or agreement by, or
on behalf of, the Representative. Any notice by Capital
Corporation or SBC to the Underwriters shall be sufficient if
given in writing or by facsimile transmission confirmed
promptly in writing addressed to the Representative at its
address set forth in Schedule I hereto, and any notice by the
Underwriters to Capital Corporation or SBC shall be sufficient
if given in writing or by facsimile transmission confirmed
promptly in writing addressed to Capital Corporation or SBC at
Southwestern Bell Corporation, 175 E. Houston Street, 7th
Floor, San Antonio, Texas 78205-2233, Telecopy Number: (210)
351-3849, Attention of the Vice President, Treasurer, and
Chief Financial Officer with a copy to the Senior Executive
Vice President and General Counsel, Southwestern Bell
Corporation, 13th Floor, San Antonio, Texas 78205-2233,
Telecopy Number: (210) 351-2298.
14. This Agreement shall be binding upon the
Underwriters, Capital Corporation, SBC and their respective
successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except
that (a) the representations, warranties, indemnities and
agreements of <PAGE>
<PAGE> 22
Capital Corporation and SBC contained in this Agreement shall
also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15
of the Securities Act, and (b) the indemnity agreement of the
Underwriters contained in Paragraph 9 hereof shall be deemed
to be for the benefit of directors of Capital Corporation and
SBC officers of Capital Corporation and SBC who have signed
the Registration Statement and any person controlling Capital
Corporation or SBC. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons
referred to in this Paragraph 14, any legal or equitable
right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
15. For purposes of this Agreement, "business day" means
any day on which the New York Stock Exchange, Inc. is open for
trading.
16. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together
constitute one and the same instrument.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF NEW YORK.
<PAGE>
<PAGE> 23
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this Agreement shall represent a
binding agreement among Capital Corporation, SBC and the
several Underwriters.
Very truly yours,
SOUTHWESTERN BELL CAPITAL CORPORATION
By: __________________________________
Title:
SOUTHWESTERN BELL CORPORATION
By: __________________________________
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
[NAME OF REPRESENTATIVE]
By: __________________________________
Title:
For itself and as Representative of the
several Underwriters named in Schedule II
to the foregoing Agreement.
<PAGE>
<PAGE> 24
SCHEDULE I
Underwriting Agreement dated ____________, 199_.
Registration Statement No. 33-_____
Representative(s) and Address(es):
Underwritten Securities:
Designation:
Principal Amount: $___,000,000
Date of Maturity:
Interest Rate: ____% per annum, payable semi-
annually on each _________ and
_________, commencing _________,
199_, to holders of record at the
close of business on the preceding
_________ or _________.
Purchase Price: ____% of the principal amount
thereof, plus accrued interest from
_________, 199_ to the date of
delivery.
Redemption Provisions:
Form and Authorized [The Securities will be issued only
Denominations: in registered, book-entry form in
denominations of $1,000 and integral
multiples thereof. The Securities
will be represented by a global
security or securities deposited
with, or on behalf of, The Depository
Trust Company, and registered in the
name of Cede & Co., as nominee for
The Depository Trust Company.]
Delivery Date, Time ______ a.m. (New York time),
and Location: _________, 199_, at the offices of
__________.
<PAGE>
<PAGE> 25
The Delayed Delivery [There are no Delayed
Delivery Contracts.]
Contracts shall have
the following terms:
[Delivery Date:
Expiration Date:
Compensation to
Underwriters:
Minimum principal
amount of Underwritten
Securities to be sold
pursuant to any Delayed
Delivery Contract:
Maximum aggregate
principal amount of
Underwritten Securities
to be sold pursuant
to all delayed Delivery
Contracts:]
<PAGE>
<PAGE> 26
SCHEDULE II
Principal
Amount of
Underwritten
Name of Underwriter Securities
$
____________
Total . . . . . . . $
<PAGE>
<PAGE> 27
EXHIBIT A
SOUTHWESTERN BELL CORPORATION
DELAYED DELIVERY CONTRACT
,199
Southwestern Bell Capital Corporation
________________________
San Antonio, Texas _____
Dear Sirs:
The undersigned hereby agrees to purchase from
Southwestern Bell Capital Corporation, a Delaware corporation
("Capital Corporation"), and Capital Corporation hereby agrees
to sell to the undersigned, $ principal amount of
Capital Corporation's above-captioned securities
("Securities"), offered by Capital Corporation's prospectus
dated , 199 , as supplemented by the prospectus
supplement dated , 199 (collectively, the
"Prospectus"), receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal
amount thereof plus accrued interest from , 199
to the Delivery Date (as defined in the next paragraph) and on
the further terms and conditions set forth in this Contract.
The Securities are entitled to the benefits of the Support
Agreement, dated November 10, 1986, between Capital
Corporation and Southwestern Bell Corporation, a Delaware
corporation ("SBC").
Payment for and delivery of the Securities to be
purchased by the undersigned shall be made on
, 199 , herein called the "Delivery Date".
At 10:00 A.M., New York time, on the Delivery Date, the
Securities to be purchased by the undersigned hereunder will
be delivered by Capital Corporation to the undersigned, and
the undersigned will accept delivery of such Securities and
will make payment to Capital Corporation of the purchase price
therefore at the office of The Bank of New York. Payment will
be by certified or official bank check payable in next-day
funds settled through the New York Clearing House, or such
other Clearing House as Capital Corporation may designate, to
or upon the order of Capital Corporation. The Securities will
be delivered in such authorized forms and denominations and
registered in such names as the undersigned may designate by
written or telegraphic communication addressed to Capital
Corporation not less than two full business days prior to the
Delivery Date or, if the undersigned fails to make a timely
designation in the foregoing manner, in the form of one
definitive fully registered certificate representing the
Securities in the above principal amount, registered in the
name of the undersigned.
<PAGE>
<PAGE> 28
This Contract will terminate and be of no further force
and effect after , 199_, unless (i) on or
before such date it shall have been executed and delivered by
both parties hereto and (ii) Capital Corporation shall have
sold to the Underwriters named in the Prospectus the Immediate
Delivery Underwritten Securities (as defined in the
Underwriting Agreement referred to in the Prospectus).
Capital Corporation will mail or deliver to the undersigned at
its address set forth below a notice to that effect, stating
the date of the occurrence thereof, accompanied by copies of
the opinion of counsel for Capital Corporation and SBC
delivered to such Underwriters pursuant to Paragraph 11(d) and
11(e) of the Underwriting Agreement.
The obligation of the undersigned to accept delivery of
and make payment for the Securities on the Delivery Date will
be subject to the condition that the Securities shall not, on
the Delivery Date, be an investment prohibited by the laws of
the jurisdiction to which the undersigned is subject, the
undersigned hereby representing that such an investment is not
so prohibited on the date hereof.
This Contract will inure to the benefit of and be binding
upon the parties hereto and their respective successors but
will not be assignable by either party hereto without the
written consent of the other.
This Contract may be executed by any of the parties
hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
It is understood that acceptance of any Delayed Delivery
Contract (as defined in said Underwriting Agreement) is in
Capital Corporation's and SBC's sole discretion and, without
limiting the foregoing, need not be on a first-come, first-
served basis. If this Contract is acceptable to Capital
Corporation and SBC, it is requested that Capital Corporation
and SBC sign the form of acceptance below and mail or deliver
one of the counterparts hereof to <PAGE>
<PAGE> 29
the undersigned at its address set forth below. This will
become a binding contract among Capital Corporation, SBC and
the undersigned when such counterpart is so mailed or delivered.
Very truly yours,
By......................................
........................................
Title
........................................
........................................
Address
Accepted as of , 199
SOUTHWESTERN BELL CAPTIAL CORPORATION
By.................................
Title:
SOUTHWESTERN BELL CORPORATION
By.................................
Title:
<PAGE>
EXHIBIT 4.A
Draft of December 6, 1994
SOUTHWESTERN BELL CORPORATION,
as Issuer and Registrant of Securities
AND
THE BANK OF NEW YORK
Trustee
____________________
INDENTURE
Dated as of November 1, 1994
___________________
Providing for Issuance of Securities in Series
<PAGE>
<PAGE>
Certain Sections of this Indenture relating to Sections 310
through 318, inclusive, of the Trust Indenture Act of 1939.
This reconciliation section does not constitute part of the
Indenture.
Trust Indenture Act Indenture
of 1939 Section Section
310(a)(1) . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . Inapplicable
(a)(4) . . . . . . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . 2.07
(b) . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . 10.03
313(a) . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . Inapplicable
(b)(2) . . . . . . . . . . . . . . . . . . . 7.06; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . 10.02
(d) . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . 4.02; 10.02
(b) . . . . . . . . . . . . . . . . . . . . . Inapplicable
(c)(1) . . . . . . . . . . . . . . . . . . . 10.04
(c)(2) . . . . . . . . . . . . . . . . . . . 10.04
(c)(3) . . . . . . . . . . . . . . . . . . . Inapplicable
(d) . . . . . . . . . . . . . . . . . . . . . Inapplicable
(e) . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . 7.05; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . 2.11
(a)(1)(A) . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1) . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . 2.06
318(a) . . . . . . . . . . . . . . . . . . . . . 10.01
<PAGE>
<PAGE> i
TABLE OF CONTENTS*
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE . . 1
1.01 Definitions . . . . . . . . . . . . . . . . . 1
1.02 Other Definitions . . . . . . . . . . . . . . 3
1.03 Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . 3
1.04 Rules of Construction . . . . . . . . . . . . 4
ARTICLE 2
THE SECURITIES . . . . . . . . . 4
2.01 Issuable in Series . . . . . . . . . . . . . 4
2.02 Establishment of Terms and Form of Series of
Securities . . . . . . . . . . . . . . . . . 4
2.03 Execution, Authentication and Delivery . . . 6
2.04 Registrar and Paying Agent . . . . . . . . . 8
2.05 Payment on Securities . . . . . . . . . . . . 9
2.06 Paying Agent to Hold Money in Trust . . . . . 10
2.07 Securityholder Lists; Ownership of Securities 10
2.08 Registration of Transfer and Exchange . . . . 11
2.09 Replacement Securities . . . . . . . . . . . 13
2.10 Outstanding Securities . . . . . . . . . . . 13
2.11 Treasury Securities . . . . . . . . . . . . . 14
2.12 Temporary Securities . . . . . . . . . . . . 14
2.13 Cancellation . . . . . . . . . . . . . . . . 15
2.14 Defaulted Interest . . . . . . . . . . . . . 15
2.15 CUSIP Numbers . . . . . . . . . . . . . . . . 15
ARTICLE 3
REDEMPTION . . . . . . . . . . 16
3.01 Notice to Trustee . . . . . . . . . . . . . . 16
3.02 Selection of Securities to be Redeemed . . . 16
3.03 Notice of Redemption . . . . . . . . . . . . 16
3.04 Effect of Notice of Redemption . . . . . . . 17
3.05 Deposit of Redemption Price . . . . . . . . . 17
3.06 Securities Redeemed in Part . . . . . . . . . 17
ARTICLE 4
COVENANTS . . . . . . . . . . 17
4.01 Payment of Securities . . . . . . . . . . . . 17
4.02 Reports by SBC . . . . . . . . . . . . . . . 18
4.03 Statement as to Compliance . . . . . . . . . 19
4.04 Calculation of Original Issue Discount . . . 19
* This Table of Contents Does Not Constitute Part of the
Indenture.
<PAGE>
<PAGE> ii
ARTICLE 5
SUCCESSORS . . . . . . . . . . 19
5.01 When SBC May Merge, etc. . . . . . . . . . . 19
ARTICLE 6
DEFAULTS AND REMEDIES . . . . . . . 19
6.01 Events of Default . . . . . . . . . . . . . . 19
6.02 Acceleration . . . . . . . . . . . . . . . . 21
6.03 Other Remedies Available to Trustee . . . . . 21
6.04 Waiver of Existing Defaults . . . . . . . . . 22
6.05 Control by Majority . . . . . . . . . . . . . 22
6.06 Limitation on Suits by Securityholders . . . 22
6.07 Rights of Holders to Receive Payment . . . . 23
6.08 Collection Suits by Trustee . . . . . . . . . 23
6.09 Trustee May File Proofs of Claim . . . . . . 23
6.10 Priorities . . . . . . . . . . . . . . . . . 23
6.11 Undertaking for Costs . . . . . . . . . . . . 24
ARTICLE 7
TRUSTEE . . . . . . . . . . . 24
7.01 Duties of Trustee . . . . . . . . . . . . . . 24
7.02 Rights of Trustee . . . . . . . . . . . . . . 25
7.03 Individual Rights of Trustee . . . . . . . . 26
7.04 Trustee's Disclaimer . . . . . . . . . . . . 26
7.05 Notice of Defaults . . . . . . . . . . . . . 26
7.06 Reports by Trustee to Holders . . . . . . . . 26
7.07 Compensation and Indemnity . . . . . . . . . 26
7.08 Replacement of Trustee . . . . . . . . . . . 27
7.09 Successor Trustee, Agents by Merger, etc. . . 29
7.10 Eligibility; Disqualification . . . . . . . . 29
7.11 Preferential Collection of Claims Against SBC
. . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 8
DISCHARGE OF INDENTURE . . . . . . . 29
8.01 Termination of SBC's Obligations . . . . . . 29
8.02 Application of Trust Money . . . . . . . . . 30
8.03 Repayment to SBC . . . . . . . . . . . . . . 30
8.04 Indemnity for Government Obligations . . . . 30
ARTICLE 9
AMENDMENTS AND WAIVERS . . . . . . . 31
9.01 Without Consent of Holders . . . . . . . . . 31
9.02 With Consent of Holders . . . . . . . . . . . 31
9.03 Compliance with Trust Indenture Act . . . . . 32
9.04 Revocation and Effect of Consents . . . . . . 32
9.05 Notation on or Exchange of Securities . . . . 33
9.06 Trustee Protected . . . . . . . . . . . . . . 33
<PAGE>
<PAGE> iii
9.07 Execution of Supplemental Indentures . . . . 33
ARTICLE 10
MISCELLANEOUS . . . . . . . . . 33
10.01 Trust Indenture Act Controls . . . . . . . . 33
10.02 Notices . . . . . . . . . . . . . . . . . . 33
10.03 Communication by Holders with Other Holders 34
10.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . 34
10.05 Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . 34
10.06 Rules by Trustee and Agents . . . . . . . . 35
10.07 Legal Holidays . . . . . . . . . . . . . . . 35
10.08 Governing Law . . . . . . . . . . . . . . . 35
10.09 No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . . 35
10.10 No Recourse Against Others . . . . . . . . . 35
10.11 Acts of Holders . . . . . . . . . . . . . . 35
10.12 Execution in Counterparts . . . . . . . . . 37
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 37
<PAGE>
<PAGE> 1
INDENTURE dated as of November 1, 1994 between
SOUTHWESTERN BELL CORPORATION, a Delaware corporation ("SBC"),
and THE BANK OF NEW YORK, a New York banking company duly
organized and validly existing under the laws of the State of
New York ("Trustee").
RECITALS OF SBC
SBC has duly authorized the execution and delivery of
this Indenture for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness
("Securities") as herein provided.
All things necessary to make this Indenture a valid
agreement of SBC, in accordance with its terms, have been
done.
For and in consideration of the premises and the purchase
of the Securities by the Holders thereof, it is mutually
covenanted and agreed as follows for the equal and ratable
benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Affiliate" means any person directly or indirectly
controlling or controlled by, or under direct or indirect
common control with, SBC.
"Agent" means any Paying Agent, Registrar, or co-
Registrar.
"Authorized Newspaper" means a newspaper of general
circulation, in an official language of the country of
publication or in the English language, customarily published
on days other than Legal Holidays, as defined in Section
10.07, in such country. Whenever successive weekly
publications in an Authorized Newspaper are required
hereunder, they may be made (unless otherwise expressly
provided herein) on the same or different days of the week and
in the same or different Authorized Newspapers.
"Board of Directors" means the Board of Directors of SBC,
or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution of the
Board of Directors, certified by the Secretary or an Assistant
Secretary of SBC to have been duly adopted by the Board of
Directors and to be in full force and effect.
"Default" means any event which is, or after notice or
passage of time would be, an Event of Default.
"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 Global Securities, the person designated as
Depository by SBC pursuant to Section 2.02.
"Global Security" means a Security in the form prescribed
in Section 2.02 evidencing all or part of a Series of
Securities, issued to the Depository for such series or its
nominee, and registered in the name of such Depository or
nominee.
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"Holder" or "Securityholder" means the bearer of an
Unregistered Security or of a coupon appertaining thereto or
the person in whose name a Registered Security is registered
on the Registrar's books.
"Indenture" means this Indenture as amended or
supplemented from time to time including, for all purposes of
this instrument and any such amendment or supplement, the
provisions of the TIA that are deemed to be a part of and
govern this instrument and any such amendment or supplement,
respectively. The term "Indenture" shall also include the
forms and terms of a particular Series of Securities
established as contemplated hereunder.
"Officer" means the Chairman of the Board of Directors,
any Vice Chairman of the Board of Directors, the President,
any Vice-President, the Treasurer or the Secretary of SBC.
"Officers' Certificate" means a certificate signed by two
Officers or by any Officer and an Assistant Treasurer or an
Assistant Secretary of SBC.
"Opinion of Counsel" means a written opinion of legal
counsel who is acceptable to SBC and the Trustee. Counsel may
be an employee of or counsel to SBC or the Trustee.
"Order" means an order in the name of SBC signed by two
Officers or by any Officer and an Assistant Treasurer or an
Assistant Secretary of SBC.
"Original Issue Discount Security" means any Security
which provides for an amount less than the stated principal
amount thereof to be due and payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.02.
"Principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the
security.
"Registered Security" means any Security issued hereunder
and registered by the Registrar.
"Responsible Officer", when used with respect to the
Trustee, shall mean the chairman or any vice-chairman of the
board of directors or trustees, the chairman or any vice-
chairman of the executive committee of the board of directors
or trustees, the president, any vice-president, the treasurer,
the secretary, any trust officer, any second or assistant
vice-president or any other officer or assistant officer of
the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter
is referred because of his knowledge of and familiarity with a
particular subject.
"SBC" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable
provisions hereof and thereafter means the successor.
"SEC" means the Securities and Exchange Commission.
"Series" or "Series of Securities" means a series of
Securities.
"Securities" means the debentures, notes or other
obligations of SBC issued, authenticated and delivered under
this Indenture.
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"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or
indirectly, by SBC or by one or more other of its
Subsidiaries, or by SBC and one or more other of its
Subsidiaries. For the purposes of this definition, "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.
"TIA" means the Trust Indenture Act of 1939 as in effect
on the date of this Indenture provided, however, that in the
event the Trust Indenture Act of 1939 is amended after such
date, "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to the applicable
provisions hereof and thereafter means the successor and if,
at any time, there is more than one Trustee, "Trustee" as used
with respect to the Securities of any Series shall mean the
Trustee with respect to that Series.
"U.S. person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or a
political subdivision thereof, or an estate or trust the
income of which is subject to United States Federal income
taxation regardless of its source.
"United States" means the United States of America
(including the States and the District of Columbia), its
territories, its possessions and all other areas subject to
its jurisdiction.
"Unregistered Security" means any Security issued
hereunder which is not a Registered Security.
"Yield to Maturity" means the yield to maturity,
calculated by SBC at the time of issuance of a Series of
Securities or, if applicable, at the most recent determination
of interest on such Series in accordance with accepted
financial practice.
SECTION 1.02 Other Definitions.
Term Section
"Bankruptcy Law". . . . . . . . . . . . 6.01
"Custodian" . . . . . . . . . . . . . . 6.01
"Event of Default" . . . . . . . . . . 6.01
"Legal Holiday" . . . . . . . . . . . . 10.07
"Paying Agent" . . . . . . . . . . . . 2.04
"Registrar" . . . . . . . . . . . . . . 2.04
"U.S. Government Obligations" . . . . . 8.01
SECTION 1.03 Incorporation by Reference of Trust Indenture
Act.
Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part
of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture to be qualified" means this Indenture.
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<PAGE> 4
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means SBC.
All other terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by SEC rule under the TIA have the meanings assigned
to them therein.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with accounting
principles generally accepted in the United States of
America.
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and
words in the plural include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01 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 may
be Registered Securities and Unregistered Securities within a
Series and the Unregistered Securities may be subject to such
restrictions, and contain such legends, as may be required by
United States laws and regulations. Except as provided in the
foregoing sentence or as otherwise provided by or pursuant to
the Board Resolution referred to in Section 2.02, all
Securities of a Series shall be identical in all respects.
Securities of different Series may differ in any respect;
provided that all Series of Securities shall be equally and
ratably entitled to the benefits of this Indenture.
SECTION 2.02 Establishment of Terms and Form of Series of
Securities.
(a) At or prior to the issuance of any Series of
Securities, the following shall be established either by or
pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or by an indenture supplemental hereto:
(1) the title of the Securities of the Series
(which title shall distinguish the Securities of the
Series from the Securities of all other Series and from
all other securities issued by SBC);
(2) 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 2.08, 2.09, 2.12, 3.06 or 9.05);
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<PAGE> 5
(3) the date or dates on which the principal of
the Securities of the Series is payable;
(4) the rate or rates at which the Securities of
the Series shall bear interest, if any, or the method of
calculating such rate or rates of interest, the date or
dates from which such interest shall accrue, the dates on
which such interest shall be payable and, with respect to
Registered Securities, the record date for the interest
payable on any interest payment date;
(5) the place or places where the principal of
and interest on Registered and any Unregistered
Securities of the Series shall be payable;
(6) 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 SBC;
(7) the obligation, if any, of SBC to redeem or
purchase Securities of the Series pursuant to any sinking
fund or analogous provisions or upon the happening of a
specified event 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;
(8) if in other than denominations of $1,000 and
any integral multiple thereof, the denominations in which
Securities of the Series shall be issuable;
(9) if other than the principal amount thereof,
the portion of the principal amount of Securities of the
Series which shall be payable upon declaration or
acceleration of the maturity thereof pursuant to Section
6.02;
(10) whether Securities of the Series shall be
issuable as Registered Securities or Unregistered
Securities (with or without interest coupons), or both,
and any restrictions applicable to the offering, sale or
delivery of Unregistered Securities and whether, and the
terms upon which, Unregistered Securities of a Series may
be exchanged for Registered Securities of the same Series
and vice versa;
(11) whether and under what circumstances SBC
will pay additional amounts on the Securities of that
Series held by a person who is not a U.S. person in
respect of taxes or similar charges withheld or deducted
and, if so, whether SBC will have the option to redeem
such Securities rather than pay such additional amounts;
(12) the currency or currencies, including
composite currencies, in which payment of the principal
of and interest on the Securities of the Series shall be
payable (if other than the currency of the United States
of America);
(13) if the amount or payments of principal of 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;
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<PAGE> 6
(14) the obligation, if any, of SBC to permit the
conversion or exchange of the Securities of the Series
into other securities (whether or not issued by, or the
obligation of, SBC), and the terms and conditions upon
which such conversion or exchange shall be effected
(including, without limitation, the initial conversion or
exchange price or rate, the conversion or exchange period
and any other provisions in addition to or in lieu of
those set forth in this Indenture relative to such
obligation;
(15) whether the Securities of the Series shall
be issuable in whole or in part in the form of one or
more Global Securities and, in such case, the Depository
for such Global Security or Securities, which Depository
shall be a clearing agency registered under the
Securities Exchange Act of 1934, as amended;
(16) any other terms of the Series (which terms
shall not be inconsistent with the provisions of this
Indenture), including any terms which may be required by
or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities
of that Series;
(17) the form of the Securities (or forms thereof
if Unregistered and Registered Securities shall be
issuable in such Series, including such legends as may be
required by United States laws or regulations, the form
of any coupons or temporary global Security which may be
issued and the forms of any certificates which may be
required hereunder or under United States laws or
regulations in connection with the offering, sale,
delivery or exchange of Unregistered Securities); and
(18) the CUSIP number, if any.
(b) If the terms and form or forms of any Series of
Securities are established by or pursuant to a Board
Resolution, SBC shall deliver a copy of such Board Resolution
to the Trustee at or prior to the issuance of such Series with
(1) the form or forms of Security which have been approved
attached thereto, or (2) if such Board Resolution authorized
Officers to approve the terms and form or forms of the
Securities, an Officers' Certificate approving the terms and
form or forms of Security with such form or forms of
Securities attached thereto.
SECTION 2.03 Execution, Authentication and Delivery.
(a) Securities shall be executed on behalf of SBC by its
Chairman of the Board of Directors or a Vice-Chairman of the
Board of Directors or its President or a Vice-President, and
its Treasurer or an Assistant Treasurer or its Secretary or an
Assistant Secretary. Signatures shall be manual or facsimile.
SBC's seal shall be reproduced on the Securities and may, but
need not, be attested. The coupons of Unregistered Securities
shall bear the facsimile signature of the Treasurer or an
Assistant Treasurer of SBC.
(b) If an Officer, an Assistant Treasurer or an
Assistant Secretary of SBC whose signature is on a Security or
coupon no longer holds that office at the time the Security is
authenticated, the Security or coupon shall be valid
nevertheless.
(c) A Security shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent
and no coupon
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<PAGE> 7
shall be valid until the Security to which it appertains has
been so authenticated. Such signature shall be conclusive
evidence that the Security has been authenticated under this
Indenture. Each Registered Security shall be dated the date
of its authentication, and each Unregistered Security shall be
dated as provided in connection with the establishment of the
Series thereof.
(d) The Trustee shall at any time, and from time to
time, authenticate and deliver Securities of any Series
executed and delivered by SBC for original issue in an
aggregate principal amount not in excess of the principal
amount authorized for such Series, upon receipt by the Trustee
of (i) an Order for the authentication and delivery of such
Securities, (ii) if the terms and form or forms of the
Securities of such Series have been established by or pursuant
to a Board Resolution as permitted by Section 2.02, a copy of
such Board Resolution and any Officers' Certificate that may
be required pursuant to Section 2.02(b), and (iii) an Opinion
of Counsel stating,
(1) if the form of such Securities has been
established by or pursuant to a Board Resolution as
permitted by Section 2.02, that such form has been
established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been
established by or pursuant to a Board Resolution as
permitted by Section 2.02, that such terms have been
established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and
delivered by the Trustee and issued by SBC in the manner
and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding
obligations of SBC entitled to the benefits of the
Indenture.
Notwithstanding the provisions of Section 2.02 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 2.02(b) 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 time
of authentication upon original issuance of the first Security
of such series to be issued.
If the terms and form or forms of such Securities have
been established by or pursuant to a Board Resolution as
permitted by Section 2.02, the Trustee shall not be required
to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will adversely 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 foregoing, until SBC has delivered an
Officers' Certificate to the Trustee and the Registrar stating
that, as a result of the action described, SBC would not
suffer adverse consequences under the provisions of United
States law or regulations in effect at the time of the
delivery of Unregistered Securities, (i) delivery of
Unregistered Securities by the Trustee or Registrar will be
made only outside the United States and (ii) Unregistered
Securities will be released by the Trustee or Registrar in
definitive form to the
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<PAGE> 8
person entitled to physical delivery thereof only upon
presentation of a certificate in the form prescribed by SBC.
(e) If SBC shall establish pursuant to Section 2.02 that
the Securities of a Series are to be issued in whole or in
part in the form of one or more Global Securities, then SBC
shall execute and the Trustee shall, in accordance with this
Section and SBC's Order with respect to such Series,
authenticate and deliver one or more Global Securities that
(i) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of outstanding
Securities of such series to be represented by one or more
Global Securities; (ii) shall be registered in the name of the
Depository for such Global Security or Securities or the
nominee of such Depository, (iii) shall be delivered by the
Trustee to such Depository or pursuant to such Depository's
instruction and (iv) shall bear a legend substantially to the
following effect: "This Security is a Global Security within
the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depository or a nominee of a
Depository. Unless and until it is exchanged in whole or in
part for Securities in definitive form in accordance with the
provisions of the Indenture and the terms of the Securities,
this Security may not be transferred except as a whole by the
Depository to a nominee of 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 Depository or a nominee of such successor
Depository."
Each depository designated pursuant to Section 2.02 for a
Global Security must, at the time of its designation and at
all times while it serves as Depository, be a clearing agency
registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation.
(f) The Trustee may appoint an authenticating agent to
authenticate Securities. An authenticating agent may
authenticate Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating
agent has the same rights as an Agent to deal with SBC or an
Affiliate thereof.
SECTION 2.04 Registrar and Paying Agent.
SBC shall maintain in the Borough of Manhattan, The City
of New York, State of New York, an office or agency where
Registered Securities may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency
where (subject to Sections 2.05(c) and 2.08(b)) Securities may
be presented for payment or for exchange ("Paying Agent").
With respect to any Series of Securities issued in whole or in
part as Unregistered Securities, SBC shall maintain one or
more Paying Agents located outside the United States and shall
maintain such Paying Agents for a period of two years after
the principal of such Unregistered Securities has become due
and payable. During any period thereafter for which it is
necessary in order to conform to United States tax law or
regulations, SBC will maintain a Paying Agent outside the
United States to which the Unregistered Securities or coupons
appertaining thereto may be presented for payment and will
provide the necessary funds therefor to such Paying Agent upon
reasonable notice. The Registrar shall keep a register with
respect to each Series of Securities issued in whole or in
part as Registered Securities and to their transfer and
exchange. SBC may appoint one or more co-Registrars
acceptable to the Trustee and one or more additional Paying
Agents for each Series of Securities and SBC may terminate the
appointment of any
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<PAGE> 9
co-Registrar or Paying Agent at any time upon written notice.
The term "Registrar" includes any co-Registrar. The term
"Paying Agent" includes any additional Paying Agent. SBC
shall notify the Trustee of the name and address of any Agent
not a party to this Indenture. If SBC fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.
SBC initially appoints the Trustee as Registrar and
Paying Agent.
SECTION 2.05 Payment on Securities.
(a) Subject to the following provisions, SBC will pay to
the Trustee the amounts, in such coin or currency as is at the
time legal tender for the payment of public or private debt,
in the manner, at the times and for the purposes set forth
herein and in the text of the Securities for each Series, and
SBC hereby authorizes and directs the Trustee from funds so
paid to it to make or cause to be made payment of the
principal of and interest, if any, on the Securities and
coupons of each Series as set forth herein and in the text of
such Securities and coupons. The Trustee will arrange
directly with any Paying Agents for the payment, or the
Trustee will make payment, from funds furnished by SBC, of the
principal and interest, if any, on the Securities and coupons
of each Series by check drawn upon a bank in The City of New
York.
(b) Interest, if any, on Registered Securities of a
Series shall be paid on each interest payment date for such
Series to the Holder thereof at the close of business on the
relevant record dates specified in the Securities of such
Series. SBC may pay such interest by check mailed to such
Holder's address as it appears on the register for Securities
of such Series. Principal of Registered Securities shall be
payable only against presentation and surrender thereof at the
office of the Paying Agent in New York, New York, unless SBC
shall have otherwise instructed the Trustee in writing.
(c) To the extent provided in the Securities of a
Series, (i) interest, if any, on Unregistered Securities shall
be paid only against presentation and surrender of the coupons
for such interest installments as are evidenced thereby as
they mature and (ii) original issue discount (as defined in
Section 1273 of the Internal Revenue Code of 1986, as
amended), if any, on Unregistered Securities shall be paid
only against presentation and surrender of such Securities, in
either case at the office of a Paying Agent located outside of
the United States, unless SBC shall have otherwise instructed
the Trustee in writing. Principal of Unregistered Securities
shall be paid only against presentation and surrender thereof
as provided in the Securities of a Series. If at the time a
payment of principal of or interest, if any, or original issue
discount, if any, on an Unregistered Security or coupon shall
become due the payment of the full amount so payable at the
office or offices of all the Paying Agents outside the United
States is illegal or effectively precluded because of the
imposition of exchange controls or other similar restrictions
on the payment of such amount in the United States currency,
then SBC may instruct the Trustee to make such payments at the
office of a Paying Agent located in the United States,
provided that provision for such payment in the United States
would not cause such Unregistered Security to be treated as a
"registration-required obligation" under United States law and
regulations.
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SECTION 2.06 Paying Agent to Hold Money in Trust.
SBC will require each Paying Agent for any Series of
Securities other than the Trustee to agree in writing that it
will hold all sums held by it for the payment of principal of
and interest on Securities of that Series in trust for the
benefit of the persons entitled thereto until such sums are
paid to such persons or otherwise disposed of as herein
provided, and that the Paying Agent will notify promptly the
Trustee of any default by SBC in making any such payment.
While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. If
SBC acts as Paying Agent, it shall segregate the money held by
it for the payment of principal of and interest on any Series
of Securities and hold such money as a separate trust fund.
SBC at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon so doing the Paying Agent
shall have no further liability for the money so paid.
SECTION 2.07 Securityholder Lists; Ownership of Securities.
(a) The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list received by or
furnished to it of the names and addresses of Holders of
Securities. If the Trustee is not the Registrar or if
Unregistered Securities are outstanding under the Indenture,
SBC shall furnish to the Trustee semiannually on or before the
last day of June and December in each year, and at such other
times as the Trustee may request in writing, a list, in such
form and as of such date as the Trustee may reasonably
require, containing all the information in the possession or
control of the Registrar, any co-Registrar, SBC or any of its
Paying Agents other than the Trustee as to the names and
addresses of Holders of Securities.
(b) Ownership of Registered Securities of a Series shall
be proved by the register for such Series kept by the
Registrar. Ownership of Unregistered Securities may be proved
by the production of such Unregistered Securities or by a
certificate or affidavit executed by the person holding such
Unregistered Securities or by a depository with whom such
Unregistered Securities were deposited, if the certificate or
affidavit is satisfactory to the Trustee. SBC, the Trustee,
and any agent of SBC may treat the bearer of any Unregistered
Security or coupon and the person in whose name a Registered
Security is registered as the absolute owner thereof for all
purposes.
(c) Notwithstanding the foregoing, with respect to any
Global Security, nothing herein shall prevent SBC, the Trustee
or any agent of SBC or the Trustee from giving effect to any
written certification, proxy or other authorization furnished
by a Depository or impair, as between a Depository and holders
of beneficial interests in any Global Security, the operation
of customary practices governing the exercise of the rights of
the Depository as Holder of such Global Security. None of
SBC, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of
the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for
maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
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SECTION 2.08 Registration of Transfer and Exchange.
(a) When Registered Securities of a Series are presented
to the Registrar with a request to register their transfer or
to exchange them for an equal principal amount of Registered
Securities of the same Series and of like tenor of other
authorized denominations, the Registrar shall register the
transfer or make the exchange if its customary requirements
for such transactions are met.
(b) If both Registered and Unregistered Securities are
authorized for a Series of Securities and the terms of such
Securities permit, Unregistered Securities may be exchanged
for an equal principal amount of Registered or Unregistered
Securities of the same Series and of like tenor in any
authorized denominations upon delivery to the Registrar (or a
Paying Agent, if the exchange is for Unregistered Securities)
of the Unregistered Security with all unmatured coupons and
all matured coupons in default appertaining thereto and if all
other requirements of the Registrar (or such Paying Agent) and
such Securities for such exchange are met.
Notwithstanding the foregoing, the exchange of
Unregistered Securities for Registered Securities will be
subject to the satisfaction of the provisions of United States
law and regulations in effect at the time of such exchange,
and no exchange will be made until SBC has notified the
Trustee and the Registrar that, as a result of such exchange,
SBC would not suffer adverse consequences under such law or
regulations.
(c) To permit registrations of transfers and exchanges,
the Trustee shall authenticate Securities upon surrender of
Securities for registration of transfer or for exchange as
provided in this Section. SBC will not make any charge for
any registration of transfer or exchange but may require the
payment by the party requesting such registration of transfer
or exchange of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith, but not
for any exchange pursuant to Section 2.12, 3.06 or 9.05.
(d) Neither SBC nor the Registrar shall be required (i)
to issue, register the transfer of or exchange Securities of
any Series for the period beginning at the opening of business
15 days immediately preceding the selection of any such
Securities to be redeemed and ending at the close of business
on the day of first publication of the relevant notice of
redemption or, if there is no publication, the mailing of the
relevant notice of redemption, or (ii) to register the
transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the
portion being redeemed of any such Securities selected, called
or being called for redemption in part.
(e) Unregistered Securities or any coupons appertaining
thereto shall be transferable by delivery.
(f) Notwithstanding the foregoing, any Global Security
shall be exchangeable pursuant to this Section 2.08 for
Securities registered in the names of Persons other than the
Depository for such Security or its nominee only if (i) such
Depository notifies SBC that it is unwilling or unable to
continue as Depository for such Global Security or if at any
time such Depository ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, (ii)
SBC executes and delivers to the Trustee an Order that such
Global Security shall be so exchangeable or (iii) there shall
have occurred and be continuing an Event of Default with
respect to the Securities. Any Global Security
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<PAGE> 12
that is exchangeable pursuant to the preceding sentence shall
be exchangeable for Securities registered in such names as
such Depository shall direct.
Notwithstanding any other provision in this Indenture, a
Global Security may not be transferred except as a whole by
the Depository with respect to 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.
(g) If at any time the Depository for the Securities of
a Series notifies SBC that it is unwilling or unable to
continue as Depository for the Securities of such Series or if
at any time the Depository for the Securities of such Series
shall no longer be eligible under Section 2.03, SBC shall
appoint a successor Depository with respect to the Securities
of such Series. If a successor Depository for the Securities
of such Series is not appointed by SBC within 90 days after
SBC receives such notice or becomes aware of such
ineligibility, SBC's election pursuant to Section 2.02(15)
shall no longer be effective with respect to the Securities of
such series and SBC will execute, and the Trustee, upon
receipt of the Order for the authentication and delivery of
definitive Securities of such Series, will authenticate and
deliver, Securities of such Series in definitive form in an
aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Series in
exchange for such Global Security or Securities.
SBC may at any time and in its sole discretion determine
that the Securities of any series issued in the form of one or
more Global Securities shall no longer be represented by such
Global Security or Securities. In such event SBC will
execute, and the Trustee, upon receipt of the Order for the
authentication and delivery of the definitive Securities of
such Series, will authenticate and deliver, Securities of such
Series in definitive form and in an aggregate principal amount
equal to the principal amount of the Global Security or
Securities representing such Series in exchange for such
Global Security or Securities.
If (a) there shall have occurred and be continuing an
Event of Default (as defined in Section 6.01) or an event
which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to a Series
of Securities issued in the form of one or more Global
Securities, or (b) if specified by SBC pursuant to
Section 2.02 with respect to a Series of Securities, the
Depository for such Series of Securities may surrender a
Global Security for such Series of Securities in exchange in
whole or in part for Securities of such Series in definitive
form. Thereupon, SBC shall execute, and the Trustee shall
authenticate and deliver, without service closing charge:
(i) to each person specified by such
Depository a new Security or Securities of the same
series, of any authorized denomination as requested
by such person in aggregate principal amount equal
to and in exchange for such person's beneficial
interest in the Global Security; and
(ii) to such Depository a new Global Security in
a denomination equal to the difference, if any, between
the principal amount of the surrendered Global Security
and the aggregate principal amount of Securities
delivered to Holders thereof.
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In any exchange provided for in any of the preceding
three paragraphs, SBC will execute and the Trustee will
authenticate and deliver Securities in definitive registered
form in authorized denominations.
Upon the exchange of a Global Security for Securities in
definitive form, such Global Security shall be canceled by the
Trustee. Registered Securities issued in exchange for a
Global Security pursuant to this Section shall be registered
in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee.
SECTION 2.09 Replacement Securities.
(a) If a mutilated Security or a Security with a
mutilated coupon appertaining to it is surrendered to the
Trustee, SBC shall issue and the Trustee shall authenticate
and deliver in exchange therefor a replacement Registered
Security, if such surrendered security was a Registered
Security, or a replacement Unregistered Security with coupons
corresponding to the coupons appertaining to the surrendered
Security, if such surrendered Security was an Unregistered
Security, of the same Series and of like tenor, if the
Trustee's requirements are met.
(b) If the Holder of a Security claims that the Security
or any coupon appertaining thereto has been lost, destroyed or
wrongfully taken, SBC shall issue (and the Trustee shall
authenticate) a replacement Registered Security of like tenor,
if such Holder's claim pertains to a Registered Security, or a
replacement Unregistered Security of like tenor with coupons
corresponding to the coupons appertaining to the lost,
destroyed or wrongfully taken Unregistered Security or the
Unregistered Security to which such lost, destroyed or
wrongfully taken coupon appertains, if such Holder's claim
pertains to an Unregistered Security, of the same Series and
of like tenor, if the Trustee's requirements are met;
provided, however, that the Trustee or SBC may require any
such Holder to provide to the Trustee and SBC security or
indemnity sufficient in the judgment of SBC and the Trustee to
protect SBC, the Trustee, any Agent or any authenticating
agent from any loss which any of them may suffer if a Security
or any coupon appertaining thereto is replaced. SBC may
charge the party requesting a replacement Security for its
expenses in replacing a Security.
(c) Every replacement Security is an additional
obligation of SBC.
(d) The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other remedies with
respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons.
SECTION 2.10 Outstanding Securities.
(a) Securities outstanding at any time are all
Securities authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, and
those described in this Section as not outstanding.
(b) If a Security is replaced pursuant to Section 2.09,
it ceases to be outstanding until the Trustee receives proof
satisfactory to it that the replaced Security is held by a
bona fide purchaser.
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<PAGE> 14
(c) If a Paying Agent (other than SBC) holds on a
redemption date or maturity date money sufficient to pay all
amounts due on Securities of any Series on that date, then on
and after that date all Securities of such Series due on such
date cease to be outstanding and interest on them ceases to
accrue, provided that if the 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.
(d) A Security does not cease to be outstanding because
SBC or an Affiliate holds the Security.
(e) In determining whether the Holders of the requisite
principal amount of Securities of any Series have concurred in
any direction, waiver or consent, (i) 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 acceleration of the maturity thereof
pursuant to Section 6.02 and (ii) the principal amount of a
Security denominated in a foreign currency or currencies shall
be the U.S. dollar equivalent, determined on 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 (i)
above) of such Security.
SECTION 2.11 Treasury Securities.
In determining whether the Holders of the requisite
principal amount of Securities of any Series have concurred in
any direction, waiver or consent, Securities of such Series
owned by SBC or an Affiliate shall be disregarded, except that
for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent,
only Securities of such Series which the Trustee knows are so
owned shall be so disregarded. Securities of such Series
owned by SBC or which have been pledged in good faith may be
considered by the Trustee if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right to so act with
respect to such Securities and that the pledgee is not SBC or
an Affiliate.
SECTION 2.12 Temporary Securities.
(a) Until definitive Registered Securities of any Series
are ready for delivery, SBC may prepare and execute and the
Trustee shall authenticate temporary Registered Securities of
such Series. Temporary Registered Securities of any Series
shall be substantially in the form of definitive Registered
Securities of such Series but may have variations that SBC
considers appropriate for temporary Securities. Every
temporary Registered Security shall be executed by SBC and
authenticated by the Trustee, and registered by the Registrar,
upon the same conditions, and with like effect, as a
definitive Registered Security. Without unreasonable delay,
SBC shall prepare and the Trustee shall authenticate
definitive Registered Securities of the same Series and of
like tenor in exchange for temporary Registered Securities.
(b) Until definitive Unregistered Securities of any
Series are ready for delivery, SBC may prepare and execute and
the Trustee shall authenticate one or more temporary
Unregistered Securities, which may have coupons attached or
which may be in the form of a single temporary global
Unregistered Security of that Series without coupons. The
temporary Unregistered Security or Securities of any Series
shall be
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<PAGE> 15
substantially in the form approved by or pursuant to a Board
Resolution and shall be delivered to one of the Paying Agents
located outside the United States or to such other person or
persons as SBC shall direct against such certifications as SBC
may from time to time prescribe. The temporary Unregistered
Security or Securities of a Series shall be executed by SBC
and authenticated by the Trustee upon the same conditions, and
with like effect, as a definitive Unregistered Security of
such Series, except as provided herein or in the Board
Resolution or supplemental indenture relating thereto. A
temporary Unregistered Security or Securities shall be
exchangeable for definitive Unregistered Securities of like
tenor at the time and on the conditions, if any, specified in
the temporary Security.
Upon any exchange of a part of a temporary Unregistered
Security of a Series for definitive Unregistered Securities of
such Series and of like tenor, the temporary Unregistered
Security shall be endorsed by the Trustee or Paying Agent to
reflect the reduction of its principal amount by an amount
equal to the aggregate principal amount of the definitive
Unregistered Securities of such Series and of like tenor so
exchanged and endorsed.
SECTION 2.13 Cancellation.
SBC at any time may deliver Securities and coupons to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities and coupons
surrendered to them for registration of transfer, for exchange
or for payment. The Trustee shall cancel all Securities and
coupons surrendered for registration of transfer, exchange,
payment or cancellation and may dispose of cancelled
Securities and coupons as SBC directs; provided, however, that
any Unregistered Securities of a Series delivered to the
Trustee for exchange prior to maturity shall be retained by
the Trustee for reissue as provided herein or in the
Securities of such Series. SBC may not issue new Securities
to replace Securities that it has paid or delivered to the
Trustee for cancellation, provided that the Trustee shall not
be required to destroy cancelled Securities but may be
required to deliver such Securities to SBC upon demand.
SECTION 2.14 Defaulted Interest.
If SBC defaults on a payment of interest on a Series of
Securities, SBC shall pay the defaulted interest as provided
in such Securities or in any other lawful manner not
inconsistent with the requirements of any securities exchange
on which such Securities may be listed and acceptable to the
Trustee. With respect to Registered Securities, the Trustee
may pay the defaulted interest, plus any interest payable on
the defaulted interest, to the Holders of such Registered
Securities on a subsequent special record date. SBC shall fix
the record date and the payment date. At least 15 days before
the record date SBC shall mail to such Holders a notice that
states the record date, the payment date and the amount of
interest to be paid.
SECTION 2.15 CUSIP Numbers.
SBC in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities,
and
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<PAGE> 16
any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
REDEMPTION
SECTION 3.01 Notice to Trustee.
SBC may, with respect to any Series of Securities,
reserve the right to redeem and pay such Series of Securities
or any part thereof, or may covenant to redeem and pay the
Series of Securities or any part thereof, before maturity at
such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and SBC
wants or is obligated to redeem all or part of the Series of
Securities pursuant to the terms of such Securities, it shall
notify the Trustee of the redemption date and the principal
amount of the Series of Securities to be redeemed. SBC shall
give such notice at least 75 days before the redemption date
(or such shorter notice as may be acceptable to the Trustee).
SECTION 3.02 Selection of Securities to be Redeemed.
If less than all the Securities of a Series are to be
redeemed, the Trustee, not more than 75 days prior to the
redemption date, shall select the Securities of the Series to
be redeemed pro rata or by lot or in such other manner as the
Trustee shall deem fair and appropriate. The Trustee shall
make the selection from Securities of the Series that are
outstanding and that have not previously been called for
redemption. Securities of the Series and portions of them
selected by the Trustee shall be in amounts of $1,000 or
integral multiples of $1,000 or, with respect to Securities of
any Series issuable in other denominations pursuant to Section
2.02(a)(8), in amounts equal to the minimum principal
denomination for each such Series and integral multiples
thereof. Provisions of this Indenture that apply to
Securities of that Series called for redemption also apply to
portions of Securities of that Series called for redemption.
The Trustee shall promptly notify SBC 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.
SECTION 3.03 Notice of Redemption.
(a) At least 30 days but not more than 60 days before a
redemption date, SBC shall mail a notice of redemption by
first-class mail to each Holder of Registered Securities that
are to be redeemed.
(b) If Unregistered Securities are to be redeemed,
notice of redemption shall be published in an Authorized
Newspaper in each of The City of New York, London and, if such
Securities to be redeemed are listed on the Luxembourg Stock
Exchange, Luxembourg twice in different calendar weeks, the
first publication to be not less than 30 nor more than 60 days
before the redemption date.
(c) All notices shall identify the Series of Securities
to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
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<PAGE> 17
(3) if less than all the outstanding Securities
of a Series are to be redeemed, the identification (and,
in the case of partial redemption, the principal amounts)
of the particular Securities to be redeemed;
(4) the name and address of the Paying Agent;
(5) that Securities of the Series called for
redemption and all unmatured coupons, if any,
appertaining thereto must be surrendered to the Paying
Agent to collect the redemption price; and
(6) that interest on Securities of the Series
called for redemption ceases to accrue on and after the
redemption date.
At SBC's request, the Trustee shall give the notice of
redemption in SBC's name and at its expense.
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed or published,
Securities of a Series called for redemption become due and
payable on the redemption date at the redemption price. Upon
surrender to the Paying Agent of such Securities together with
all unmatured coupons, if any, appertaining thereto, such
Securities shall be paid at the redemption price plus accrued
interest to the redemption date, but installments of interest
due on or prior to the redemption date will be payable, in the
case of Unregistered Securities, to the bearers of the coupons
for such interest upon surrender thereof and, in the case of
Registered Securities, to the Holders of such Securities of
record at the close of business on the relevant record dates.
SECTION 3.05 Deposit of Redemption Price.
On or before the redemption date, SBC shall deposit with
the Trustee money sufficient to pay the redemption price of
and (unless the redemption date shall be an interest payment
date) interest accrued to the redemption date on all
Securities to be redeemed on that date.
SECTION 3.06 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part,
SBC shall issue and the Trustee shall authenticate for the
Holder of that Security a new Security or Securities of the
same Series and like tenor and the same form in authorized
denominations equal in aggregate principal amount to the
unredeemed portion of the Security surrendered. If a Global
Security is so surrendered, such new Security so issued shall
be a new Global Security.
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of Securities.
SBC shall pay or cause to be paid the principal of and
interest on the Securities on the dates and in the manner
provided herein and in the Securities.
SBC shall pay interest on overdue principal of a Security
of any Series at the rate of interest (or, in the case of
Original Issue
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<PAGE> 18
Discount Securities, Yield to Maturity) borne by the
Securities of that Series, and, to the extent lawful, it shall
pay interest on overdue installments of interest at the same
rate.
SECTION 4.02 Reports by SBC.
SBC agrees:
(a) to file with the Trustee, within 15 days after SBC
is required to file the same with the SEC, 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 SEC may from time to time by rules and regulations
prescribe) which SBC may be required to file with the SEC
pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934, as amended; or, if SBC is not required
to file information, documents or reports pursuant to either
of such sections, then to file with the Trustee and the SEC,
in accordance with rules and regulations prescribed from time
to time by the SEC, 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) to file with the Trustee and the SEC, in accordance
with the rules and regulations prescribed from time to time by
the SEC, such additional information, documents, and reports
with respect to compliance by SBC with the conditions and
covenants provided for in this Indenture as may be required
from time to time by such rules and regulations; and
(c) to transmit by mail to all Holders of Registered
Securities, as the names and addresses of such Holders appear
on the register for each Series of Securities, to such Holders
of Unregistered Securities as have, within the two years
preceding such transmission, filed their names and addresses
with the Trustee for that purpose and to all Holders of
Securities whose names and addresses have been furnished to
the Trustee pursuant to Section 2.07, within 30 days after the
filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the
Corporation pursuant to subsections (a) and (b) of this
Section 4.02 as may be required by rules and regulations
prescribed from time to time by the SEC.
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<PAGE> 19
SECTION 4.03 Statement as to Compliance.
SBC will deliver to the Trustee annually, commencing [no
more than one year after closing] [date], a certificate, from
its principal executive officer, principal financial officer
or principal accounting officer, stating whether or not to the
best knowledge of the signer thereof the Company is in
compliance (without regard to periods of grace or notice
requirements) with all conditions and covenants under this
Indenture, and if SBC shall not be in compliance, specifying
such non-compliance and the nature and status thereof of which
such signer may have knowledge.
SECTION 4.04 Calculation of Original Issue Discount.
SBC shall file with the Trustee promptly at the end of
each calendar year a written notice specifying the amount of
original issue discount (including daily rates and accrual
periods) accrued on outstanding Securities as of the end of
such year.
ARTICLE 5
SUCCESSORS
SECTION 5.01 When SBC May Merge, etc.
SBC may not consolidate with, or merge into, or be
merged into, or transfer or lease its properties and assets
substantially as an entirety to, any person, unless the person
is a corporation organized under the laws of the United
States, any State thereof or the District of Columbia, the
person assumes by supplemental indenture all the obligations
of SBC under this Indenture and the Securities and any coupons
appertaining thereto, shall have provided for conversion or
exchange rights in accordance with the terms of any Securities
contemplating conversion or exchange pursuant to
Section 2.01(a)(14), and, after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing. The surviving, transferee or lessee corporation
shall be the successor to SBC and SBC, except in the case of a
lease, shall be relieved of all obligations under this
Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTIONS 6.01 Events of Default.
An "Event of Default" occurs with respect to the
Securities of any Series if:
(1) SBC defaults in the payment of interest on any
Security of that Series when the same becomes due and payable
and the Default continues for a period of 90 days;
(2) SBC defaults in the payment of the principal of any
Security of that Series when the same becomes due and payable
at maturity, upon redemption or otherwise;
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<PAGE> 20
(3) SBC fails to comply with any of its other agreements
in the Securities of that Series, or in any supplemental
indenture under which the Securities of that Series may have
been issued or in the Indenture (other than an agreement
included solely for the benefit of Series of Securities other
than that Series) and the Default continues for the period and
after the notice specified below;
(4) SBC pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(5) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against SBC in an involuntary
case,
(B) appoints a Custodian of SBC or for all or
substantially all of its property, or
(C) orders the liquidation of SBC, and the order
or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or
any similar federal or state law for the relief of debtors.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal
amount of all the outstanding Securities of that Series notify
SBC (and the Trustee in the case of notification by such
Holders) of the Default and SBC does not cure the Default
within 90 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default".
Upon receipt by the Trustee of any Notice of Default
pursuant to this Section 6.01 with respect to Securities of a
Series all or part of which is represented by a Global
Security, a record date shall be established for determining
Holders of outstanding Securities of such Series entitled to
join in such Notice of Default, which record date shall be at
the close of business on the day the Trustee receives such
Notice of Default. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be
entitled to join in such Notice of Default, whether or not
such Holders remain Holders after such record date; provided,
that unless Holders of at least 10% in principal amount of the
outstanding Securities of such Series, or their proxies, shall
have joined in such Notice of Default prior to the day which
is 90 days after such record date, such Notice of Default
shall automatically and without further action by any Holder
be canceled and of no further effect. Nothing in this
paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new Notice
of Default identical to a Notice of Default which
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<PAGE> 21
has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 6.01.
SECTION 6.02 Acceleration.
If an Event of Default occurs with respect to the
Securities of any Series and is continuing, the Trustee, by
notice to SBC, or the Holders of at least 25% in principal
amount of all of the outstanding Securities of that Series, by
notice to SBC and the Trustee, may declare the principal (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,
and any accrued interest on, all the Securities of that Series
to be due and payable. Upon such declaration, such principal
(or, in the case of Original Issue Discount Securities, such
specified amount) and any accrued interest shall be due and
payable immediately. The Holders of a majority in principal
amount of all of the Securities of that Series, by notice to
SBC and the Trustee, may rescind such acceleration and its
consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or
interest that have become due solely because of the
acceleration.
Upon receipt by the Trustee of any declaration of
acceleration, or rescission thereof, with respect to
Securities of a Series all or part of which is represented by
a Global Security, the Trustee shall establish a record date
for determining Holders of outstanding Securities of such
Series entitled to join in such declaration of acceleration,
or rescission, as the case may be, which record date shall be
at the close of business on the date the Trustee receives such
declaration of acceleration, or rescission, as the case may
be. The Holders on such record date, or their duly designated
proxies, and only such persons, shall be entitled to join in
such declaration of acceleration, or rescission, as the case
may be, whether or not such Holders remain Holders after such
record date; provided, that unless such declaration of
acceleration, or rescission, as the case may be, shall have
become effective by virtue of the requisite percentage having
been obtained prior to the day which is 90 days after such
record date, such declaration of acceleration, or rescission,
as the case may be, shall automatically and without further
action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day
period, a new declaration of acceleration, or rescission
thereof, as the case may be, that is identical to a
declaration of acceleration, or rescission thereof, which has
been canceled pursuant to the proviso to the preceding
sentence, in which even a new record date shall be established
pursuant to the provisions of this Section 6.02.
SECTION 6.03 Other Remedies Available to Trustee.
(a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment
of principal of and interest on the Securities of the Series
that is in Default or to enforce the performance of any
provision of the Securities of that Series or this Indenture.
(b) The Trustee may maintain a proceeding even if it
does not possess any of the Securities or does not produce any
of them in the proceeding. A delay or omission by the Trustee
or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall
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<PAGE> 22
not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. To the extent permitted
by law no remedy is exclusive of any other remedy and all
available remedies are cumulative.
SECTION 6.04 Waiver of Existing Defaults.
The Holders of a majority in principal amount of any
Series of Securities by notice to the Trustee may waive an
existing Default with respect to that Series and its
consequences except a Default in the payment of principal of
or interest on any Security.
SBC may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to waive
any past default hereunder. If a record date is fixed, the
Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to waive any default
hereunder, whether or not such Holders remain Holders after
such record date; provided, that unless such majority in
principal amount shall have waived such default prior to the
date which is 90 days after such record date, any such waiver
previously given shall automatically and without further
action by any Holder be canceled and of no further effect.
SECTION 6.05 Control by Majority.
The Holders of a majority in principal amount of the
Securities of each Series affected (with each such Series
voting as a class) may 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 it with
respect to Securities of that Series. However, the Trustee
may refuse to follow any direction that conflicts with law or
this Indenture or that is unduly prejudicial to the rights of
the Securityholders of that Series.
Upon receipt by the Trustee of any such direction with
respect to Securities of a Series all or part of which is
represented by a Global Security, the Trustee shall establish
a record date for determining Holders of outstanding
Securities of such Series entitled to join in such direction,
which record date shall be at the close of business on the day
the Trustee receives such direction. The Holders on such
record date, or their duly designated proxies, and only such
Persons, shall be entitled to join in such direction, whether
or not such Holders remain Holders after such record date;
provided, that unless such majority in principal amount shall
have been obtained prior to the day which is 90 days after
such record date, such direction shall automatically and
without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration
of such 90-day period, a new direction identical to a
direction which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall
be established pursuant to the provisions of this
Section 6.05.
SECTION 6.06 Limitation on Suits by Securityholders.
A Securityholder may pursue a remedy with respect to this
Indenture or the Securities of any Series only if:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default with respect to Securities of that
Series;
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(2) the Holders of at least 25% in principal amount of
the Securities of that Series make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss,
liability or expense to be, or which may be, incurred by the
Trustee in pursuing the remedy;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of
indemnity; and
(5) during such 60-day period, the Holders of a majority
in principal amount of the Securities of that Series do not
give the Trustee a direction inconsistent with the request.
A Securityholder of any Series may not use this Indenture
to prejudice the rights of another Securityholder of that
Series or any other Series or to obtain a preference or
priority over another Securityholder of that Series or any
other Series.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture,
the right of any Holder of a Security to receive payment of
principal of and (subject to Section 2.14) interest on the
Security (whether at maturity or upon redemption), on or after
the respective due dates expressed in the Security, the right
of any Holder of a Security of a Series the terms of which
provide for conversion or exchange as contemplated in
Section 2.01(a)(14) to have the Security be converted or
exchanged as so provided, and the right of any Holder of a
coupon to receive payment of (subject to Section 2.14)
interest due as provided in such coupon, or to bring suit for
the enforcement of any such payment on or after such
respective dates or any such conversion or exchange right,
shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08 Collection Suits by Trustee.
If an Event of Default specified in Section 6.01(1) or
(2) occurs with respect to Securities of any Series and is
continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against SBC for the whole
amount of the principal of and interest on Securities of that
Series remaining unpaid.
SECTION 6.09 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable, and take
any and all actions authorized under the TIA, in order to have
the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relating to SBC (or any other obligor
upon the Securities), its creditors or its property.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section
7.07;
SECOND: to Holders of Securities in respect of which or
for the benefit of which such money has been collected for
amounts due and
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<PAGE> 24
unpaid on such Securities for principal and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and
interest, respectively; and
THIRD: to SBC.
The Trustee may fix a record date (with respect to
Registered Securities) and payment date for any such payment
to Holders of Securities.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable attorneys' fees,
against any party litigant in the suit, in the manner and to
the extent provided in the TIA. This Section does not apply
to a suit by SBC, the Trustee, a Holder pursuant to Section
6.07, or a Holder or Holders of more than 10% in principal
amount of the Securities of any Series.
ARTICLE 7
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) The duties and responsibilities of the Trustee shall
be as provided by the TIA. If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of
its rights and powers under this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of
Default:
(1) Subject to the provisions of the TIA, the
Trustee need perform only those duties that are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this
Indenture against the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not
they conform to the requirements of this Indenture (but
need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section.
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(2) The Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and
(c) of this Section.
(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree with SBC.
Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) Except as expressly provided herein, 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.
SECTION 7.02 Rights of Trustee.
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the
proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may consult with counsel of its selection after consultation
with SBC or require an Officers' Certificate or an Opinion of
Counsel. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on a Board
Resolution, an Officers' Certificate, an Opinion of Counsel or
the advice of counsel selected in consultation with SBC.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(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 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.
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<PAGE> 26
SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise
deal with SBC or an Affiliate with the same rights it would
have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee is subject to Sections 7.10
and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, shall not be
accountable for SBC's use of the proceeds from the Securities
and shall not be responsible for any statement in the
Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default occurs and is continuing with respect to the
Securities of any Series and if it is known to the Trustee,
the Trustee shall mail to each Holder of a Security of that
Series entitled to receive reports pursuant to Section 4.02(c)
(and, if Unregistered Securities of that Series are
outstanding, shall cause to be published at least once in an
Authorized Newspaper in each of The City of New York, London
and, if Securities of that Series are listed on the Luxembourg
Stock Exchange, Luxembourg) notice of the Default as and to
the extent provided by the TIA. Except in the case of a
Default in payment on the Securities of any Series, the
Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that
withholding such notice is in the interests of Securityholders
of that Series.
SECTION 7.06 Reports by Trustee to Holders.
(a) Within 60 days after each anniversary date of the
first issue of a Series of Securities, the Trustee shall mail
to each Securityholder of that Series entitled to receive
reports pursuant to Section 4.02(c) a brief report, dated as
of such date, that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2).
(b) At the time that it mails such a report to
Securityholders of any Series, the Trustee shall file a copy
of that report with the SEC and with each stock exchange on
which the Securities of that Series are listed. SBC shall
provide written notice to the Trustee when the Securities of
any Series are listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
(a) SBC shall pay to the Trustee from time to time such
compensation as SBC and the Trustee shall from time to time
agree in writing for all services rendered by the Trustee
hereunder. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. SBC
shall reimburse the Trustee upon request for all reasonable out-of-
pocket expenses incurred by it in connection with the
performance of its duties under this Indenture. Such expenses
shall include the reasonable compensation and out-of-pocket
expenses of the Trustee's agents and counsel.
(b) SBC shall indemnify each of the Trustee or any
successor Trustee for, and hold the Trustee harmless against,
any and all loss, damage, claims, liability or expense,
including taxes (other than taxes
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<PAGE> 27
based upon, measured by or determined by the income of the
Trustee), arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including
the reasonable costs and expenses of defending itself against
any claim or liability in connection with the exercise or
performance of any of the Trustee's powers or duties
hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to the Trustee's own negligence or
bad faith. The Trustee shall notify SBC promptly of any claim
for which it may seek indemnity. SBC shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee
may have separate counsel and SBC shall pay the reasonable
fees and expenses of such counsel. SBC need not pay for any
settlement made without its consent.
(c) SBC need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through
its negligence or bad faith.
(d) To secure the payment obligations of SBC pursuant to
this Section, the Trustee shall have a lien prior to the
Securities of any Series on all money or property held or
collected by the Trustee, except that held in trust to pay
principal of and interest on particular Securities of a
Series.
(e) If the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(4) or (5)
occurs, such expenses and the compensation for such services
are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The provisions of this Section 7.07 shall survive
termination of this Indenture and the resignation or removal
of the Trustee.
SECTION 7.08 Replacement of Trustee.
(a) The resignation or removal of the Trustee and the
appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as
provided in this Section.
(b) The Trustee may resign with respect to the
Securities of any Series by so notifying SBC. The Holders of
a majority in principal amount of the Securities of any Series
may remove the Trustee with respect to that Series by so
notifying the Trustee and SBC. SBC may remove the Trustee
with respect to Securities of any Series if:
(1) the Trustee fails to comply with
Section 7.10;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason with respect to
Securities of any Series, SBC shall promptly appoint a
successor Trustee for such Series. Within one year after a
successor Trustee with respect to the Securities of any Series
takes office the Holders of a majority in principal amount of
Securities of that Series may appoint a successor Trustee with
respect to the Securities of that Series to replace the
successor Trustee appointed by SBC.
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<PAGE> 28
(d) If a successor Trustee with respect to the
Securities of any Series does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring
Trustee, SBC or the Holders of at least 10% in principal
amount of the Securities of the applicable Series may petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
Series.
(e) If the Trustee with respect to the Securities of any
Series fails to comply with Section 7.10, any Securityholder
of the applicable Series may petition any court of competent
jurisdiction for the removal of such Trustee and the
appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and SBC.
Thereupon, the resignation or removal of the retiring Trustee
for any Series of Securities shall become effective, and the
successor Trustee shall have all the rights, powers and duties
of the retiring Trustee with respect to all Series of
Securities for which the successor Trustee is to be acting as
Trustee under this Indenture. The retiring Trustee shall
promptly transfer all property held by it as Trustee with
respect to such Series of Securities to the successor Trustee
subject to the lien provided for in Section 7.07. SBC shall
give notice of each appointment of a successor Trustee for any
Series of Securities by mailing written notice of such event
by first-class mail to the Holders of Securities of such
Series entitled to receive reports pursuant to Section 4.03(c)
and, if any Unregistered Securities are outstanding, by
publishing notice of such event once in an Authorized
Newspaper in each of The City of New York, London, and, if
Securities of that Series are listed on the Luxembourg Stock
Exchange, Luxembourg.
(g) All provisions of this Section 7.08 except
subparagraphs (b)(1), (e) and (h) and the words "subject to
the lien provided for in Section 7.07" in subparagraph (f)
shall apply also to any Paying Agent located outside the
United States and its possessions and required by
Section 2.04.
(h) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not
all) Series, SBC, the retiring Trustee and such successor
Trustee shall execute and deliver a supplemental indenture
wherein such successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest
in, such successor Trustee all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities
of that or those Series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not
retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those Series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee, and (3)
shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee.
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SECTION 7.09 Successor Trustee, Agents by Merger, etc.
If the Trustee or any Agent consolidates with, merges or
converts into, or transfers all or substantially all of its
corporate trust business assets to, another corporation, the
successor corporation, without any further act, shall be the
successor Trustee or Agent, as the case may be.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee with respect
to each Series of Securities which satisfies the requirements
of TIA Section 310(a)(1). The Trustee shall always have a
combined capital and surplus of at least $100,000,000, as set
forth in its most recent published annual report of condition.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the TIA, the Trustee shall either
eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the TIA
and this Indenture. To the extent permitted by the TIA, the
Trustee shall not be deemed to have a conflicting interest by
virtue of being a trustee under this Indenture with respect to
Securities of more than one Series or a trustee under all
indentures now or hereafter existing pursuant to which
indenture securities have been issued on which SBC is an
obligor and which may be excluded under the proviso of TIA
Section 310(b)(1).
SECTION 7.11 Preferential Collection of Claims Against SBC.
If and when the Trustee shall be or become a creditor of
SBC (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the TIA regarding the
collection of claims against SBC (or any such other obligor).
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of SBC's Obligations.
(a) SBC reserves the right to terminate all of its
obligations under (i) this Indenture and the Securities, or
(ii) the Securities of any Series if SBC irrevocably deposits
in trust with the Trustee money or U.S. Government Obligations
sufficient to pay, when due, the principal of and any interest
on all the Securities or all the Securities of that Series, as
the case may be, to maturity or redemption and if all other
conditions set forth in the Securities of that Series are met.
However, SBC's obligations in Sections 2.04, 2.05, 2.06, 2.07,
2.08, 2.09, 2.15, 4.01, 7.07, 7.08, 8.03 and 8.04 shall
survive until the Securities are no longer outstanding.
Thereafter SBC's obligations in Sections 7.07, 8.03 and 8.04
shall survive. Unless otherwise provided in the terms of
Securities of a Series that are convertible or exchangeable as
contemplated in Section 2.01(a)(14), SBC shall not be entitled
to terminate its obligations under the Securities of that
Series pursuant to this Section 8.01.
(b) Before or after a deposit SBC may make arrangements
satisfactory to the Trustee for the redemption of Securities
at a future date in accordance with Article 3.
(c) After a deposit by SBC in accordance with this
Section in respect of the Securities of a Series, the Trustee
upon request shall
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<PAGE> 30
acknowledge in writing the discharge of SBC's obligations
under the Securities of the Series in respect of which the
deposit has been made and this Indenture with respect to the
Securities of that Series except for those surviving
obligations specified above.
(d) In order to have money available on a payment date
to pay principal of and interest on the Securities of any
Series, the U.S. Government Obligations shall be payable as to
principal or interest on or before such payment date in such
amounts as will provide the necessary money.
(e) "U.S. Government Obligations" means:
(i) direct obligations of the United States
of America for the payment of which the full faith
and credit of the United States of America are
pledged; or
(ii) obligations of a person controlled or
supervised by and acting as an agency or
instrumentality of the United States of America
pursuant to authority granted by the Congress of the
United States of America the payment of which is
unconditionally guaranteed as a full faith and
credit obligation by the United States of America;
provided, however, that U.S. Government Obligations shall not
be callable at the issuer's option.
SECTION 8.02 Application of Trust Money.
The Trustee shall hold in trust all money or U.S.
Government Obligations deposited with it pursuant to
Section 8.01. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying
Agent and in accordance with this Indenture to the payment of
principal of and interest on the Securities of each Series in
respect of which the deposit shall have been made.
SECTION 8.03 Repayment to SBC.
(a) The Trustee and the Paying Agent shall promptly pay
to SBC upon request any excess money or securities held by
them at any time.
(b) The Trustee and the Paying Agent shall pay to SBC
upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years
after such principal or interest became due. After payment to
SBC, Securityholders entitled to the money must look to SBC
for payment as general creditors unless an applicable
abandoned property law designates another person.
SECTION 8.04 Indemnity for Government Obligations.
SBC shall pay and shall indemnify the Trustee and each
Securityholder of each Series in respect of which the deposit
shall have been made against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such
obligations.
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ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01 Without Consent of Holders.
SBC and the Trustee may enter into one or more
supplemental indentures without consent of any Securityholder
for any of the following purposes:
(1) to cure any ambiguity, defect or inconsistency
herein or in the Securities of any Series;
(2) to provide for the issuance of and establish the
form and terms and conditions of Securities of any Series as
provided in Section 2.02, and to establish the form of any
certifications required to be furnished pursuant to the terms
of this Indenture or any Series of Securities;
(3) to secure the Securities pursuant to Section 4.02;
(4) to comply with Section 5.01 or 5.02;
(5) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(6) to add to the rights of the Holders of any Series of
Securities or to surrender any right or power herein conferred
on SBC;
(7) to make provision with respect to the conversion or
exchange rights of Holders pursuant to the requirements of the
terms of Securities of a Series that is convertible or
exchangeable as contemplated in Section 2.01(a)(14); or
(8) to make any change that does not adversely affect
the rights of any Securityholder.
SECTION 9.02 With Consent of Holders.
(a) With the written consent of the Holders of a
majority in principal amount of the outstanding Securities of
each Series affected by such supplemental indenture (with each
Series voting as a class), SBC and the Trustee may enter into
a supplemental indenture to add any provisions to or to change
or eliminate any provisions of this Indenture or of any
supplemental indenture or to modify, in each case in any
manner not covered by Section 9.01, the rights of the
Securityholders of each such Series. The Holders of a
majority in principal amount of the outstanding Securities of
each Series affected by such waiver (with each Series voting
as a class), by notice to the Trustee, may waive compliance by
SBC with any provision of this Indenture, any supplemental
indenture or the Securities of any such Series except a
Default in the payment of the principal of or interest on a
Security. However, without the consent of each Securityholder
affected, an amendment or waiver may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment or waiver;
(2) reduce the rate of or change the time for
payment of interest on any Security;
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<PAGE> 32
(3) reduce the principal of or change the fixed
maturity of any Security;
(4) waive a Default in the payment of the
principal of or interest on any Security;
(5) make any Security payable in currency other
than that stated in the Security;
(6) adversely affect the right to convert or
exchange, as provided in the terms thereof, any Security
that is convertible or exchangeable as contemplated in
Section 2.01(a)(14); or
(7) make any change in Section 6.04, 6.07 or
9.02(a) (third sentence).
(b) SBC may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to
consent to any indenture supplemental hereto. If a record
date is fixed, the Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; provided, that
unless such consent shall have become effective by virtue of
the requisite percentage having been obtained prior to the
date which is 90 days after such record date, any such consent
previously given shall automatically and without further
action by any Holder be canceled and of no further effect.
(c) It is not necessary under this Section 9.02 for the
Securityholders to consent to the particular form of any
proposed supplemental indenture, but it is sufficient if they
consent to the substance thereof.
(d) Promptly after the execution by SBC and the Trustee
of any supplemental indenture pursuant to the provisions of
this Section 9.02, SBC shall transmit by mail a notice,
setting forth in general terms the substance of such
supplemental indenture, to all Holders of Registered
Securities, as the names and addresses of such Holders appear
on the register for each Series of Securities, and to such
Holders of Unregistered Securities as are entitled to receive
reports pursuant to Section 4.02(c). Any failure of SBC to
mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of
one or more Series shall be set forth in a supplemental
indenture that complies with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent
to it by a Holder of a Security is a continuing consent by the
Holder and every subsequent Holder of a Security or portion of
a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made
on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of
a Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective.
After an amendment
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<PAGE> 33
or waiver becomes effective, it shall bind every
Securityholder of each Series affected by such amendment or
waiver.
SECTION 9.05 Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any Series thereafter
authenticated. SBC in exchange for Securities of that Series
may issue and the Trustee shall authenticate new Securities of
that Series that reflect the amendment or waiver.
SECTION 9.06 Trustee Protected.
The Trustee need not sign any supplemental indenture that
is reasonably likely to adversely affect its rights.
SECTION 9.07 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or
the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and 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.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision of the TIA that is required
under the TIA to be a part of and govern this Indenture, the
latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA which
may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 10.02 Notices.
(a) Any notice or communication by SBC or the Trustee to
the other is duly given if in writing and delivered in person
or mailed by first-class mail:
if to SBC to:
Southwestern Bell Corporation
175 E. Houston Street
San Antonio, Texas 78205-4105
Attention: Assistant Treasurer-
Corporate Finance
if to the Trustee to:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
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<PAGE> 34
Attention: Corporate Trust Administration
(b) SBC or the Trustee by notice to the other may
designate additional or different addresses for subsequent
notices or communications.
(c) Any notice or communication to Holders of Securities
entitled to receive reports pursuant to Section 4.02(c) shall
be mailed by first-class mail to the addresses for Holders of
Registered Securities shown on the register kept by the
Registrar and to addresses filed with the Trustee for other
Holders. Failure to so mail a notice or communication or any
defect in such notice or communication shall not affect its
sufficiency with respect to other Holders of Securities of
that or any other Series entitled to receive notice.
(d) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given,
whether or not the addressee receives it.
(e) If SBC mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and to
each Agent at the same time.
(f) If it shall be impractical in the opinion of the
Trustee or SBC to make any publication of any notice required
hereby in an Authorized Newspaper, any publication or other
notice in lieu thereof which is made or given with the
approval of the Trustee shall constitute a sufficient
publication of such notice.
(g) All other notices or communications will be in
writing.
(h) All notices or other communications given to the
Trustee shall be effective when actually received by the
Trustee.
SECTION 10.03 Communication by Holders with Other Holders.
The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the
Trustee, shall be as provided by the TIA.
SECTION 10.04 Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by SBC to the Trustee to
take any action under this Indenture, SBC shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent have been
complied with.
SECTION 10.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture
shall comply with the requirements of the TIA and shall
include:
(1) a statement that the person making such certificate
or opinion has read such covenant or condition and related
definitions;
<PAGE>
<PAGE> 35
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied
with.
SECTION 10.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders of one or more Series. The Paying
Agent or Registrar may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on
which banking institutions are not required to be open. If a
payment date or a date for conversion or exchange is a Legal
Holiday at a place of payment, conversion or exchange, then
such payment, conversion or exchange may be made at such place
on the next succeeding day that is not a Legal Holiday with
the same force and effect as if made on such date, and no
interest shall accrue for the intervening period.
SECTION 10.08 Governing Law.
The laws of the State of New York shall govern this
Indenture, the Securities and any coupons appertaining thereto
without regard to principles of conflicts of laws.
SECTION 10.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of SBC or any Affiliate. No
such indenture, loan or debt agreement may be used to
interpret this Indenture.
SECTION 10.10 No Recourse Against Others.
No director, officer, employee or stockholder, as such,
of SBC shall have any liability for any obligation of SBC
under the Securities or the Indenture or for any claim based
on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives
and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
SECTION 10.11 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 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; and, except as herein otherwise
expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to SBC. Such
instrument or instruments (and the action embodied therein and
evidenced thereby) are herein
<PAGE>
<PAGE> 36
sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and SBC, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be provided by the
affidavit of a witness of such execution or by a certificate
of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner
which the Trustee deems sufficient.
(c) The ownership of Unregistered Securities may be
proved by the production of such Unregistered Securities or by
a certificate executed by any trust company, bank, banker or
other depository, wherever situated, if such certificate shall
be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person has on deposit with
such depository, or exhibited to it, the Unregistered
Securities therein described; or such facts may be proved by
the certificate or affidavit of the Person holding such
Unregistered Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee and SBC
may assume that such ownership of any Unregistered Security
continues until (i) another such certificate or affidavit
bearing a later date issued in respect of the same
Unregistered Security is produced, (ii) such Unregistered
Security is produced to the Trustee by some other Person,
(iii) such Unregistered Security is surrendered in exchange
for a Registered Security or (iv) such Unregistered Security
is no longer outstanding. The ownership of Unregistered
Securities may also be proved in any other manner which the
Trustee deems sufficient.
(d) The ownership of Registered Securities shall be
proved by the Registrar.
(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 or SBC in reliance thereon, whether or not
notation of such action is made upon such Security.
<PAGE>
<PAGE> 37
SECTION 10.12 Execution in Counterparts.
This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such
counterparts shall together constitute but one instrument.
SOUTHWESTERN BELL CORPORATION
By:
Title:
(SEAL)
ATTEST:
Title:
THE BANK OF NEW YORK
By:
Title:
(SEAL)
ATTEST:
Title:
<PAGE>
EXHIBIT 5.A
[Letterhead of SBC Communications Inc.]
December 16, 1994
Southwestern Bell Corporation
175 E. Houston Street
San Antonio, TX 78205
Dear Sirs:
With reference to the Registration Statement on Form
S-3 which Southwestern Bell Corporation (the "Corporation")
and Southwestern Bell Capital Corporation ("Capital") propose
to file with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, relating to (i) debt
securities of the Corporation ("Debt Securities") issuable in
series under an Indenture dated as of November 1, 1994 (the
"Indenture"), between the Corporation and The Bank of New
York, as Trustee (the "Trustee"), (ii) debt securities of
Capital issuable in series under an Indenture dated as of
February 1, 1987, as supplemented by a First Supplemental
Indenture, dated as of October 1, 1990, among Capital, the
Corporation as issuer of support obligations pursuant to the
Support Agreement dated November 10, 1988 (the "Support
Agreement") between Capital and the Corporation, and the
Trustee, (iii) shares of preferred stock, par value $1.00 per
share, of the Corporation ("Preferred Stock"), (iv) depositary
shares representing fractional interests in Preferred Stock
("Depositary Shares"), and (v) shares of common stock, par
value $1.00 per share, of the Corporation ("Common Stock" and
together with the Debt Securities, the Preferred Stock and the
Depositary Shares, the "Securities"), and having an aggregate
maximum public offering price of $3,000,000,000, I am of the
opinion that:
1. The Corporation has been duly incorporated and
is validly existing and in good standing under the laws of the
State of Delaware.
2. Each series of the Debt Securities, when duly
established by or pursuant to a resolution of the Board of
Directors of the Corporation or in a supplemental indenture,
in each case so as not to violate any applicable law or any
agreement or instrument to which the Corporation is a party or
by which it is bound, and duly executed, authenticated and
issued as provided in the Indenture and delivered against
payment, will constitute valid and legally binding obligations
of the Corporation entitled to the benefits of the Indenture.
<PAGE>
<PAGE> 2
3. The shares of Preferred Stock, when both (A) the
Board of Directors of the Corporation has taken all necessary
corporate action to approve the issuance and terms of the
shares of Preferred Stock, the terms of the offering thereof,
and related matters, in each case so as not to violate any
applicable law or any agreement or instrument to which the
Corporation is a party or by which it is bound, including the
adoption of a Certificate of Designation relating to such
Preferred Stock (a "Certificate") and the filing of the
Certificate with the Secretary of State of the State of
Delaware, and (B) certificates representing the shares of
Preferred Stock have been duly executed, countersigned,
registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar
agreement approved by the Board of Directors of the
Corporation and upon payment of the consideration therefor
(not less than the par value of the Preferred Stock) provided
for therein or (ii) upon conversion or exercise of any other
Security, in accordance with the terms of such Security or the
instrument governing such Security providing for such
conversion or exercise as approved by the Board of Directors
of the Corporation, for the consideration approved by the
Board of Directors of the Corporation (not less than the par
value of the Preferred Stock), will be validly issued, fully
paid and nonassessable.
4. The Depositary Shares, when (A) the Board of
Directors of the Corporation has taken all necessary corporate
action to approve the issuance and terms of the Depositary
Shares, the terms of the offering thereof, and related
matters, in each case so as not to violate any applicable law
or any agreement or instrument to which the Corporation is a
party or by which it is bound, (B) the Depositary Agreement or
Agreements relating to the Depositary Shares and the related
Depositary Receipts have been duly authorized and validly
executed and delivered by the Corporation and the Depositary
appointed by the Corporation, (C) the shares of Preferred
Stock underlying such Depositary Shares have been duly and
validly issued and are fully paid and nonassessable as
contemplated in paragraph (3) above and deposited with a bank
or trust company (which meets the requirements for the
Depositary set forth in the Registration Statement) under the
applicable Depositary Agreements, and (D) the Depositary
Receipts representing the Depositary Shares have been duly
executed, countersigned, registered and delivered in
accordance with the appropriate Depositary Agreement and the
applicable definitive purchase, underwriting or similar
agreement approved by the Board of Directors of the
Corporation upon
<PAGE>
<PAGE> 3
payment of the consideration therefor provided for therein,
will be validly issued.
5. The Common Stock, when both (A) the Board of
Directors of the Corporation has taken all necessary corporate
action to approve the issuance of and the terms of the
offering of the shares of Common Stock, and related matters,
in each case so as not to violate any applicable law or any
agreement or instrument to which the Corporation is a party or
by which it is bound, and (b) certificates representing the
shares of Common Stock have been duly executed, countersigned,
registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar
agreement approved by the Board of Directors of the
Corporation upon payment of the consideration therefor (not
less than the par value of the Common Stock) provided for
therein or (ii) upon conversion or exercise of any Security,
in accordance with the terms of such Security or the
instrument governing such Security providing for such
conversion or exercise as approved by the Board of Directors
of the Corporation, for the consideration approved by the
Board of Directors of the Corporation (not less than the par
value of the Common Stock), will be validly issued, fully paid
and nonassessable.
6. The Support Agreement has been duly authorized,
executed and delivered by the Corporation and constitutes a
valid and legally binding agreement of the Corporation.
I hereby consent to the filing of this opinion with
the Securities and Exchange Commission in connection with the
filing of the Registration Statement referred to above and the
making of the statements with respect to me which are set
forth under the caption "Legal Opinions" in the prospectus
forming a part of the Registration Statement referred to
above.
In giving this consent, I do not thereby admit that
I am within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or
the rules and regulations of the Securities and Exchange
Commission.
Sincerely,
/s/ James D. Ellis
<PAGE>
EXHIBIT 5.B
[Letterhead of SBC Communications Inc.]
December 16, 1994
Southwestern Bell Capital Corporation
175 E. Houston Street
San Antonio, TX 78205
Dear Sirs:
With reference to the Registration Statement on Form
S-3 which Southwestern Bell Corporation ("SBC") and
Southwestern Bell Capital Corporation ("Capital Corporation")
propose to file with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to
(i) Capital Corporation's Debt Securities (the "Securities"),
issuable in series under an Indenture dated as of February 1,
1987, as supplemented by a First Supplemental Indenture, dated
as of October 1, 1990 (together, the "Indenture"), among
Capital Corporation, Southwestern Bell Corporation ("SBC"), as
issuer of support obligations pursuant to the Support
Agreement dated November 10, 1988 (the "Support Agreement")
between Capital Corporation and SBC, and The Bank of New York,
as Trustee (the "Trustee"), (ii) debt securities of SBC,
issuable in series under an Indenture dated as of November 1,
1994, between SBC and the Trustee, (iii) shares of preferred
stock, par value $1.00 per share, of SBC, (iv) depositary
shares representing fractional interests in shares of
preferred stock, par value $1.00 per share, of SBC, and (v)
shares of common stock, par value $1.00 per share, of SBC, and
having an aggregate maximum public offering price of
$3,000,000,000 I am of the opinion that:
1. Capital Corporation has been duly incorporated
and is validly existing and in good standing under the laws of
the State of Delaware.
2. Each series of the Securities, when duly
established by or pursuant to a resolution of Capital
Corporation's Board of Directors or in a supplemental
indenture, in each case so as not to violate any applicable
law or any agreement or instrument to which the Corporation is
a party or by which it is bound, executed, authenticated and
issued as provided in the Indenture and delivered against
payment, will constitute valid and legally binding obligations
of Capital Corporation entitled to the benefits of the
Indenture.
3. The Support Agreement has been duly authorized,
executed and delivered by Capital Corporation
<PAGE>
<PAGE> 2
and constitutes a valid and legally binding agreement of
Capital Corporation.
I hereby consent to the filing of this opinion with
the Securities and Exchange Commission in connection with the
filing of the Registration Statement referred to above and the
making of the statements with respect to me which are set
forth under the caption "Legal Opinions" in the prospectus
forming a part of the Registration Statement referred to
above.
In giving this consent, I do not thereby admit that
I am within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or
the rules and regulations of the Securities and Exchange
Commission.
Sincerely,
/s/ William J. Free
<PAGE>
EXHIBIT 23.A
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement on Form S-3 of
Southwestern Bell Capital Corporation and Southwestern Bell
Corporation and related Prospectus for the registration of
debt securities, preferred stock, depositary shares and
common stock of Southwestern Bell Corporation and debt
Securities of Southwestern Bell Capital Corporation having an
aggregate maximum public offering price of $3,000,000,000 and
to the incorporation by reference therein of our reports dated
February 11, 1994 with respect to the consolidated financial
statements of Southwestern Bell Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended
December 31, 1993 and the related financial statement schedules
included therein filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Antonio, Texas
December 16, 1994
<PAGE>
EXHIBIT 24.A
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
THAT, WHEREAS, SOUTHWESTERN BELL CORPORATION, a
Delaware corporation, hereinafter referred to as the
"Corporation," proposes to file with the Securities and
Exchange Commission at Washington, D.C., under the provisions
of the Securities Act of 1933, as amended, a Registration
Statement for the offer and sale of up to $3,000,000,000
proposed maximum offering price of the Corporation's common
stock, preferred stock, depository shares representing
preferred stock, debt securities and support obligations
relating to debt securities of Southwestern Bell Capital
Corporation, which are also being registered thereby; and
WHEREAS, the undersigned is an officer and director
of the Corporation;
NOW, THEREFORE, the undersigned hereby constitutes
and appoints James D. Ellis, Donald E. Kiernan, William J.
Free, Roger W. Wohlert, or any one of them, all of the City of
San Antonio and State of Texas, the undersigned's attorneys
for the undersigned and in the undersigned's name, place and
stead, and in the undersigned's office and capacity in the
Corporation, to execute and file such Registration Statement,
and thereafter to execute and file any and all amended
registration statements and amended prospectuses or amendments
or supplements to any of the foregoing, hereby giving and
granting to said attorneys full power and authority to do and
perform each and every act and thing whatsoever requisite and
necessary to be done in and concerning the premises, 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
lawfully do, or cause to be done, by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand the 18th day of November, 1994.
/s/ Edward E. Whitacre, Jr.
Edward E. Whitacre, Jr.
Chairman of the Board,
Chief Executive Officer, and
Director
<PAGE>
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
THAT, WHEREAS, SOUTHWESTERN BELL CORPORATION, a
Delaware corporation, hereinafter referred to as the
"Corporation," proposes to file with the Securities and
Exchange Commission at Washington, D.C., under the provisions
of the Securities Act of 1933, as amended, a Registration
Statement for the offer and sale of up to $3,000,000,000
proposed maximum offering price of the Corporation's common
stock, preferred stock, depository shares representing
preferred stock, debt securities and support obligations
relating to debt securities of Southwestern Bell Capital
Corporation, which are also being registered thereby; and
WHEREAS, the undersigned is a director of the
Corporation;
NOW, THEREFORE, the undersigned hereby constitutes
and appoints Edward E. Whitacre, Jr., James D. Ellis, Donald
E. Kiernan, William J. Free, Roger W. Wohlert, or any one of
them, all of the City of San Antonio and State of Texas, the
undersigned's attorneys for the undersigned and in the
undersigned's name, place and stead, and in the undersigned's
office and capacity in the Corporation, to execute and file
such Registration Statement, and thereafter to execute and
file any and all amended registration statements and amended
prospectuses or amendments or supplements to any of the
foregoing, hereby giving and granting to said attorneys full
power and authority to do and perform each and every act and
thing whatsoever requisite and necessary to be done in and
concerning the premises, 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 lawfully do, or cause to be done,
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his or her hand the 18th day of November, 1994.
/s/ Clarence C. Barksdale /s/ James E. Barnes
Clarence C. Barksdale James E. Barnes
Director Director
/s/ Jack S. Blanton /s/ August A. Busch III
Jack S. Blanton August A. Busch III
Director Director
/s/ Ruben R. Cardenas /s/ Martin K. Eby, Jr.
Ruben R. Cardenas Martin K. Eby, Jr.
Director Director
/s/Tom C. Frost /s/ Jess T. Hay
Tom C. Frost Jess T. Hay
Director Director
/s/ Bobby R. Inman /s/ Charles F. Knight
Bobby R. Inman Charles F. Knight
Director Director
<PAGE>
<PAGE> 3
/s/ Sybil C. Mobley /s/ Haskell M. Monroe, Jr.
Sybil C. Mobley Haskell M. Monroe, Jr.
Director Director
/s/ Carlos Slim Helu /s/ Patricia P. Upton
Carlos Slim Helu Patricia P. Upton
Director Director
<PAGE> 1
EXHIBIT 25.A
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
Southwestern Bell Capital Corporation
(Exact name of obligor as specified in its charter)
Delaware 43-1420172
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
175 E. Houston Street
San Antonio, Texas 78205-2233
(Address of principal executive offices) (Zip code)
Southwestern Bell Corporation
(Exact name of obligor as specified in its charter)
Delaware 43-1301883
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
175 E. Houston Street
San Antonio, Texas 78205-2233
(Address of principal executive offices) (Zip code)
Debt Securities*
(Title of the indenture securities)
* Specific titles to be determined in connection with sale(s) of
Securities.
<PAGE>
<PAGE> 2
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.
Name Address
Superintendent of Banks of the 2 Rector Street,
State of New York New York, N.Y. 10006,
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza,
New York, N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York
Association
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939
(the "Act") and Rule 24 of the Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
<PAGE>
<PAGE> 3
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
<PAGE> 4
NOTE
Pursuant to General Instruction B, the Trustee has responded only to
Items 1, 2 and 16 of this Form T-1 since to the best knowledge of the
Trustee neither of the obligors is in default under any indenture under
which the Trustee is a trustee.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
<PAGE>
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
New York, and State of New York, on the 8th day of December, 1994.
THE BANK OF NEW YORK
By: /s/ Mary Jane Morrissey
Name: Mary Jane Morrissey
Title: Assistant Vice
President
<PAGE>
<PAGE> 6
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September
30, 1994, published in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of the Federal Reserve
Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 2,833,550
Interest-bearing balances .......... 701,828
Securities:
Held-to-maturity securities ........ 1,359,569
Available-for-sale securities ...... 1,725,600
Federal funds sold in domestic
offices of the bank ................ 5,350,368
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 24,252,467
LESS: Allowance for loan and
lease losses ...............629,631
LESS: Allocated transfer risk
reserve ......................30,661
Loans and leases, net of unearned
income, allowance, and reserve 23,592,175
Assets held in trading accounts ...... 1,354,396
Premises and fixed assets (including
capitalized leases) ................ 629,219
Other real estate owned .............. 51,372
Investments in unconsolidated
subsidiaries and associated
companies .......................... 178,742
Customers' liability to this bank on
acceptances outstanding ............ 996,184
Intangible assets .................... 76,599
Other assets ......................... 1,498,770
Total assets ......................... $40,348,372
LIABILITIES
Deposits:
In domestic offices ................ $19,892,982
Noninterest-bearing ........8,179,472
Interest-bearing ......... 11,513,510
In foreign offices, Edge and
<PAGE>
<PAGE> 7
Agreement subsidiaries, and IBFs ... 10,034,789
Noninterest-bearing ...........57,902
Interest-bearing ...........9,976,887
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,240,870
Securities sold under agreements
to repurchase .................... 37,612
Demand notes issued to the U.S.
Treasury ........................... 197,519
Trading liabilities .................. 975,739
Other borrowed money:
With original maturity of one year
or less .......................... 1,621,466
With original maturity of more than
one year ......................... 33,955
Bank's liability on acceptances exe-
cuted and outstanding .............. 997,024
Subordinated notes and debentures .... 1,062,320
Other liabilities .................... 1,450,981
Total liabilities .................... 37,345,257
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,577,819
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 36,779)
Cumulative foreign currency transla-
tion adjustments .................. ( 5,875)
Total equity capital ................ 3,003,115
Total liabilities and equity
capital ........................... $40,348,372
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
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
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<PAGE> 8
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true and correct.
Thomas A. Renyi
J. Carter Bacot Directors
Alan R. Griffith
