AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
REGISTRATION NO. 333-____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
SOUTHWESTERN BELL TELEPHONE COMPANY
(Exact name of Registrant as specified in its charter)
A MISSOURI CORPORATION 43-0529710
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1010 PINE STREET
ST. LOUIS, MISSOURI 63101-3099
(314) 235-9800
(Address, including zip code, and telephone
number, including area code, of Registrant's
principal executive offices)
---------------------------
JUDITH SAHM
175 E. HOUSTON
SAN ANTONIO, TEXAS 78205
(210) 821-4105
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copies to:
WAYNE WIRTZ, ESQ. JOHN T. BOSTELMAN, ESQ.
SBC COMMUNICATIONS INC. SULLIVAN & CROMWELL
175 E. HOUSTON, 12TH FLOOR 125 BROAD ST.
SAN ANTONIO, TEXAS 78205 NEW YORK, NEW YORK 10004
---------------------------
Approximate date of commencement of proposed sale
to the public: FROM TIME TO TIME AFTER THE EFFECTIVE
DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of an earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
---------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of each class of securities to Amount to be offering price aggregate Amount of
be registered registered per unit offering price registration fee
Debt Securities $1,655,500,000(1) 100%(2) $1,655,500,000 $501,667(3)
======================================= ======================== =================== ==================== ======================
<FN>
(1) Or, in the case of debt securities issued at an original issue discount,
such greater principal amount as shall result in an aggregate public
offering price of the amount set forth above or, in the case of debt
securities denominated in a currency other than U.S. dollars or a
composite currency, such U.S. dollar amount as shall result from
converting the aggregate public offering price of such debt securities
into U.S. dollars at the spot exchange rate in effect on the date such
debt securities are initially offered to the public.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(3) Does not include an additional $94,500,000 of securities being carried
forward from Registration Statement No. 33-49967 on Form S-3 pursuant to
Rule 429 of the Securities Act. A registration fee of $31,250 for such
additional securities was previously paid with the filing of the previous
registration statement.
</FN>
</TABLE>
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to $94,500,000 of
Debt Securities registered under Registration Statement No. 33-49967 on Form S-3
previously filed by the Registrant and declared effective on August 18, 1993.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
Subject to Completion dated October 9, 1997
PROSPECTUS
U.S. $1,750,000,000
Southwestern Bell Telephone Company
DEBT SECURITIES
---------------------------
Southwestern Bell Telephone Company (the "Telephone Company") may offer,
in one or more series, debt securities ("Debt Securities") in an aggregate
principal amount (or net proceeds in the case of debt securities issued at an
original issue discount) of not more than U.S. $1,750,000,000 or the equivalent
thereof in one or more currencies or currency units on terms to be determined at
the time such Debt Securities are offered for sale. As used herein, Debt
Securities shall include securities denominated in U.S. dollars or, at the
option of the Telephone Company and if so specified in the applicable Prospectus
Supplement, in any other currency, including composite currencies such as the
European Currency Unit.
When a particular series of Debt Securities is offered, a prospectus
supplement ("Prospectus Supplement") together with this Prospectus will be
delivered setting forth the terms of the Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, currency or
currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate 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 Debt
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, the initial public offering price, the names of any underwriters,
dealers or agents, any compensation to such underwriters, dealers or agents and
any other specific terms in connection with the offering and sale of the Debt
Securities.
The Telephone Company may sell Debt Securities to or through underwriters,
and may also sell Debt Securities directly to other purchasers or through
agents. 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 ___________, 1997.
<PAGE>
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 TELEPHONE COMPANY 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 Telephone Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("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 Telephone
Company 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: Seven World Trade Center,
Suite 1300, New York, New York 10048; and Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, IL 60661-2511. 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. In addition, the SEC maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants, such as the Telephone Company, that file electronically with the
SEC. The address of such site is http://www.sec.gov. Such material can also be
inspected at the New York Stock Exchange and American Stock Exchange, on which
certain of the Telephone Company's debt securities are listed.
The Telephone Company has 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.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Telephone Company with the
SEC (File No. 1-2346) and are hereby incorporated herein by reference:
1. The Telephone Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
2. The Telephone Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31 and June 30, 1997.
3. The Telephone Company's Current Report on Form 8-K, Date of Report,
July 15, 1997.
-2-
<PAGE>
ALL DOCUMENTS FILED BY THE TELEPHONE COMPANY PURSUANT TO SECTION 13(A),
13(C), 14 OR 15(D) OF THE EXCHANGE ACT SUBSEQUENT TO THE DATE OF THIS PROSPECTUS
AND PRIOR TO THE TERMINATION OF THE OFFERING OF THE DEBT SECURITIES SHALL BE
DEEMED TO BE INCORPORATED BY REFERENCE 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 OR IN ANY PROSPECTUS
SUPPLEMENT 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 the Director-Financial Reporting,
175 E. Houston, Room 9-P-60, San Antonio, Texas 78205 (telephone number
210-821-4105).
THE TELEPHONE COMPANY
The Telephone Company was incorporated in 1882 under the laws of the State
of Missouri. The Telephone Company's principal services include the provision of
local exchange services, network access and long-distance services in the states
of Arkansas, Kansas, Missouri, Oklahoma and Texas. The Telephone Company is a
wholly owned subsidiary of SBC Communications Inc. ("SBC"), which was
incorporated in 1983 under the laws of the State of Delaware. The Telephone
Company was a wholly owned subsidiary of AT&T Corp. ("AT&T") until January 1,
1984, when it was divested by AT&T pursuant to a court-ordered reorganization of
the Bell System ("divestiture"). AT&T accomplished the divestiture by
contributing its 100 percent interest in the Telephone Company to SBC and then
distributing its ownership in SBC to its shareholders effective January 1, 1984.
The Telephone Company's principal executive offices are located at 1010
Pine Street, St. Louis, Missouri 63101-3099 (telephone 314-235-9800).
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities are to be used to provide funds to repay
long- and short-term debt and for the general corporate purposes of the
Telephone Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Telephone Company for the periods indicated:
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- -------- -------- -------- ------ ----
5.92 6.84 6.64 5.61 5.14 4.49 4.04
-3-
<PAGE>
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 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 are to be issued under an Indenture dated as of
February 1, 1985, as supplemented by a First Supplemental Indenture dated as of
June 1, 1991 (together, the "Indenture"), from the Telephone Company to The Bank
of New York, as Trustee ("Trustee"). The following summaries of certain
provisions of the Debt Securities and the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including the definitions therein of
certain terms. Particular sections of the Indenture which are relevant to the
discussion are cited parenthetically. Wherever particular sections or defined
terms of the Indenture 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 Indenture does 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 Telephone Company's Board of Directors.
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 will mature; (v) the rate or rates (or manner of
calculation thereof), if any, at which the Debt Securities of the series will
bear interest, 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 "--Book-Entry 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 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; (ix) whether the Debt Securities of the
series will be issuable in 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 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; (x) whether and under what
circumstances the Telephone Company 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
-4-
<PAGE>
Telephone Company will have the option to redeem such Debt Securities rather
than pay such additional amounts; (xi) 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; and (xii) any additional provisions or
other special terms not inconsistent with the provisions of the 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 Debt
Securities of such series. (Sections 2.01 and 2.02.)
Each series of Debt Securities will constitute unsecured and
unsubordinated indebtedness of the Telephone Company and will rank on a parity
with the Telephone Company's other unsecured and unsubordinated indebtedness.
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" 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. 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 against presentation and surrender
of the coupons for the interest installments evidenced thereby as they mature at
a paying agency of the Telephone Company located outside of the United States.
(Section 2.05(c).) The Telephone Company will maintain such an agency for a
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 Telephone
Company will maintain a paying agent outside the United States and its
possessions 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
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 Telephone Company 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 Telephone Company 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 Indenture 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.)
-5-
<PAGE>
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of 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 Telephone Company may designate from time to time, except that, at the
option of the Telephone Company, 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 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
Supplement relating to such series. The Telephone Company anticipates that the
following provisions will apply to all Depository arrangements for Registered
Debt Securities.
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 Telephone Company if
such Debt Securities are offered and sold directly by the Telephone Company.
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 Indenture. 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 Indenture.
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
Telephone Company, the Trustee, or any paying agent for such Debt Securities
will have any responsibility or liability for any aspect of the records
-6-
<PAGE>
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 Telephone Company expects that the Depository for Debt Securities of a
series, upon receipt of any payments of principal 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 Telephone Company 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 such nominee to a successor of such Depository or a nominee of
such successor. If a Depository for Debt Securities is at any time unwilling or
unable to continue as depository 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 Telephone Company within 90 days, the Telephone Company
will issue Debt Securities in definitive registered form in exchange for the
global security representing such Debt Securities. In addition, the Telephone
Company 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 Indenture occurs
and is continuing with respect to the Debt Securities of a series, or if the
Telephone Company 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 such Registrar. (Section 2.08(b).) Registered Debt
Securities may not be exchanged for Bearer Debt Securities.
-7-
<PAGE>
LIEN ON ASSETS
If at any time the Telephone Company mortgages, pledges or otherwise
subjects to any lien the whole or any part of any property or assets now owned
or hereafter acquired by it, except as hereinafter provided, the Telephone
Company will secure the outstanding Debt Securities, and any other obligations
of the Telephone Company which may then be outstanding and entitled to the
benefit of a covenant similar in effect to this covenant, equally and ratably
with the indebtedness or obligations secured by such mortgage, pledge or lien,
for as long as any such indebtedness or obligation is so secured. The foregoing
covenant does not apply to the creation, extension, renewal or refunding of
purchase-money mortgages or liens, or to the making of any deposit or pledge to
obtain the benefits of any law relating to workers' compensation, unemployment
insurance, old age pensions or other social security, or with any court, board,
commission or governmental agency as security incident to the proper conduct of
any proceeding before it. Nothing contained in the Indenture prevents a person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, the Telephone Company from mortgaging, pledging or
subjecting to any lien any property or assets, whether or not acquired from the
Telephone Company. (Section 4.02.)
SUCCESSOR ENTITY
The Telephone Company may not 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 and assumes
all the obligations of the Telephone Company under the Debt Securities and any
coupons related thereto and the Indenture. Thereafter, except in the case of a
lease, all such obligations of the Telephone Company shall terminate.
(Section 5.01.)
EVENTS OF DEFAULT
The following events are defined in the Indenture 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 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 Telephone Company for 90 days after notice to it to comply with
any of its other agreements in the Debt Securities of such series, in the
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. (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% 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 Debt
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 Debt Securities, such specified amount)
and any accrued interest will become due and payable immediately. (Section
6.02.)
Debt Securityholders may not enforce the Indenture or the Debt Securities,
except as provided in the Indenture. (Section 6.06.) The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debt
Securities. (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 or interest) if it determines that withholding notice is in their
interests. (Section 7.05.)
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AMENDMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Debt Securities may be
amended or supplemented by the Telephone Company and the Trustee 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 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.)
The Indenture may be amended or supplemented without the consent of any
Debt Securityholder (i) to cure any ambiguity, defect or inconsistency in the
Indenture or in the Debt Securities of any series; (ii) 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 the Indenture or any series of Debt
Securities; (iii) to secure the Debt Securities pursuant to Section 4.02 of the
Indenture; (iv) to provide for the assumption of all the obligations of the
Telephone Company under the Debt Securities and any coupons related thereto and
the Indenture in connection with a merger, consolidation or transfer or lease of
the Telephone Company's property and assets substantially as an entirety as
provided for in the 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
Telephone Company; or (vii) to make any change that does not adversely affect
the rights of any Debt Securityholder. (Section 9.01.)
CONCERNING THE TRUSTEE
The Telephone Company maintains banking relationships in the ordinary
course of business with the Trustee. The Trustee is also the trustee under other
indentures with the Telephone Company and SBC, as well as with SBC
Communications Capital Corporation, Pacific Telesis Group, Pacific Bell and
PacTel Capital Resources, each of which is a wholly-owned subsidiary of SBC.
PLAN OF DISTRIBUTION
GENERAL
The Telephone Company may sell Debt Securities to one or more underwriters
for public offering and sale by them or may sell Debt Securities to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Debt Securities will be named in an applicable Prospectus
Supplement.
Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Telephone Company also may, from time to time, authorize
underwriters acting as the Telephone Company's agents to offer and sell the Debt
Securities upon the terms and conditions as shall be set forth in any Prospectus
Supplement. In connection with the sale of Debt Securities, underwriters may be
deemed to have received compensation from the Telephone Company in the form of
underwriting discounts or commissions and may
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also receive commissions from purchasers of Debt Securities for whom they may
act as agent. Underwriters may sell Debt Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Telephone Company to
underwriters or agents in connection with the offering of Debt Securities, and
any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in an applicable Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the Debt
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the Debt
Securities may be deemed to be underwriting discounts and commissions, under the
Securities Act. Underwriters, dealers and agents may be entitled, under
agreements with the Telephone Company, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Telephone Company for certain
expenses.
All Debt Securities will be a new issue of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the
Telephone Company for public offering and sale may make a market in such Debt
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any Debt Securities.
Certain of the underwriters or agents and their associates may be
customers of, engage in transactions with and perform services for the Telephone
Company in the ordinary course of business.
Underwriters participating in this offering may engage in over-allotment,
stabilizing transactions, syndicate covering transactions and penalty bids in
accordance with Regulation M under the Exchange Act. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transaction permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve purchases of the Debt Securities in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the underwriters to reclaim a
selling concession from a syndicate member when the Debt Securities originally
sold by such syndicate member are purchased in a syndicate covering transaction
to cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Debt
Securities to be higher than it would otherwise be in the absence of such
transactions.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Telephone Company will
authorize underwriters, dealers or other persons acting as the Telephone
Company's agents to solicit offers by certain institutions to purchase Debt
Securities from the Telephone Company 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 Telephone
Company. The obligations of any purchaser under any such contract will not be
subject to any conditions except that (a) the purchase of the Debt 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 Debt Securities
are also being sold to underwriters, the Telephone Company shall have sold to
such underwriters the Debt 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.
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LEGAL OPINIONS
The validity of the Debt Securities offered hereby will be passed upon for
the Telephone Company by Mr. Alfred G. Richter, Jr., General Counsel of the
Telephone Company, and for any underwriters, dealers or agents by Sullivan &
Cromwell, New York, New York. Sullivan & Cromwell will rely as to matters of
Missouri law on the opinion of Mr. Alfred G. Richter, Jr., General Counsel of
the Telephone Company. As of October 1, 1997, Mr. Richter owned 8,578 shares of
SBC stock and options to purchase 89,570 shares of such stock.
EXPERTS
The financial statements and financial statement schedules of Southwestern
Bell Telephone Company appearing in the Telephone Company's Annual Report (Form
10-K) for the year ended December 31, 1996 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such financial statements and financial
statement schedules are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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SOUTHWESTERN BELL TELEPHONE COMPANY
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Filing Fee................... $501,667
Rating Agency Fees.............................................. 210,000*
Legal Fees...................................................... 125,000*
Fees and Expenses of Trustee.................................... 25,000*
Printing and Engraving of Securities............................ 12,000*
Printing and Distributing Registration Statement,
Prospectus, Underwriting or Agency Agreement,
Indenture and Miscellaneous Material.......................... 25,000*
Accountants' Fees and Expenses.................................. 70,000*
Blue Sky Fees and Expenses...................................... 10,000*
Miscellaneous Expenses.......................................... 25,000*
----------
Total........................................... $1,003,667*
==========
- ------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The statutes of the State of Missouri and the registrant's Bylaws provide
for indemnification of officers and directors, under certain circumstances,
against reasonable expenses, including attorneys' fees, incurred in connection
with the defense of a civil or criminal proceeding to which such officer or
director has been made, or threatened to have been made, a party by reason of
the fact that he is or was such director or officer. In certain circumstances,
indemnity is provided for against judgments, fines and amounts paid in
settlement if the officer or director acted in good faith and in a manner
reasonably believed by him to be in, or not opposed to, the best interest of the
registrant. Indemnification is not available where the director or officer is
found to be liable for negligence or misconduct in the performance of his duty
in a proceeding brought by or on behalf of the registrant, unless specific court
approval is obtained. The foregoing statement is subject to the detailed
provisions of Section 351.355 of the Missouri Revised Statutes of 1982, to which
reference is hereby made.
All of the registrant's directors and some of the registrant's officers
have also entered into indemnity agreements with the registrant which provide
that the registrant shall indemnify (and advance expenses to) the indemnitee to
the fullest extent permitted by applicable law and further provide that in any
proceeding to enforce the obligation to indemnify a person, the registrant shall
have the burden to establish that the indemnification is prohibited. The
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directors and officers of the registrant are covered by insurance policies
indemnifying against certain liabilities, including certain liabilities arising
under the Securities Act of 1933, as amended ("Securities Act"), which might be
incurred by them in such capacities and against which they cannot be indemnified
by the registrant.
Any underwriters, dealers or agents referred to in the forms of
underwriting or agency agreement filed as exhibits to this registration
statement will agree to indemnify the registrant's directors and its officers
who signed the registration statement against certain liabilities which might
arise under the Securities Act from information furnished to the registrant by
or on behalf of any such indemnifying party.
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 Description
- -------- -----------
1-a Form of Underwriting Agreement.
1-b Form of Selling Agency Agreement.
4-a Indenture, dated as of February 1, 1985, from Southwestern
Bell Telephone Company to The Bank of New York, as Trustee
(Exhibit 4 to Registration Statement No. 2-95518). 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 Telephone
Company and incorporated herein by reference.
4-b First Supplemental Indenture, dated as of June 1, 1991, from
Southwestern Bell Telephone Company to The Bank of New York,
Trustee (Exhibit 4-a to Form 8-K filed June 13, 1991, File No.
1-2346).
5 Opinion of Mr. Alfred G. Richter, Jr., General Counsel of
Southwestern Bell Telephone Company, as to the validity of the
Debt Securities to be issued.
12 Computation of Ratio of Earnings to Fixed Charges of
Southwestern Bell Telephone Company (Exhibit 12 to Form 10-Q
for the Second Quarter 1997, File No. 1-2346).
23-a Consent of Ernst & Young LLP, Independent Auditors.
23-b Consent of Mr. Alfred G. Richter, Jr. is contained in his
opinion filed as Exhibit 5.
24 Powers of Attorney of certain directors and officers of
Southwestern Bell Telephone Company.
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as Trustee.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
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(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, as amended ("Securities Act");
(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.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total U.S. dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(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 the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(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, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act that is
incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
* * * * *
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions referred to in Item 15 or otherwise (other
than the insurance policies referred to therein), the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the
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successful defense of any action, suit or proceeding) is asserted against the
registrant by such director, officer or controlling person in connection with
the securities being registered, the registrant 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 Securities Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 9th day of October, 1997.
SOUTHWESTERN BELL TELEPHONE COMPANY
BY:
/s/ Richard G. Lindner
-----------------------------------
Richard G. Lindner
Vice President, Chief Financial
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Principal Executive Officer:
J. Cliff Eason*
President, Chief Executive Officer
and Chairman of the Board
Principal Financial and
Accounting Officer:
Richard G. Lindner*
Vice President, Chief Financial Officer
and Director
Directors: *BY
Royce S. Caldwell*
Cassandra C. Carr*
William E. Dreyer* /s/ Richard G. Lindner
Donald E. Kiernan* ---------------------------------------
Alfred G. Richter, Jr.* Richard G. Lindner, as Attorney-in-fact
and on his own behalf as Principal
Financial and Accounting Officer
DATE October 9, 1997
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EXHIBIT INDEX
Exhibits identified in parentheses below, on file with the Securities and
Exchange Commission, are incorporated herein by reference as exhibits hereto.
All other exhibits are provided as part of the electronic transmission.
Exhibit
Number Description
- -------- -----------
1-a Form of Underwriting Agreement.
1-b Form of Selling Agency Agreement.
4-a Indenture, dated as of February 1, 1985, from Southwestern
Bell Telephone Company to The Bank of New York, as Trustee
(Exhibit 4 to Registration Statement No. 2-95518). 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 Telephone
Company and incorporated herein by reference.
4-b First Supplemental Indenture, dated as of June 1, 1991, from
Southwestern Bell Telephone Company to The Bank of New York,
Trustee (Exhibit 4-a to Form 8-K filed June 13, 1991, File No.
1-2346).
5 Opinion of Mr. Alfred G. Richter, Jr., General Counsel of
Southwestern Bell Telephone Company, as to the validity of the
Debt Securities to be issued.
12 Computation of Ratio of Earnings to Fixed Charges of
Southwestern Bell Telephone Company (Exhibit 12 to Form 10-Q
for the Second Quarter 1997, File No. 1-2346).
23-a Consent of Ernst & Young LLP, Independent Auditors.
23-b Consent of Mr. Alfred G. Richter, Jr. is contained in his
opinion filed as Exhibit 5.
24 Powers of Attorney of certain directors and officers of
Southwestern Bell Telephone Company.
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as Trustee.
-1-
Exhibit 1-a
SOUTHWESTERN BELL TELEPHONE COMPANY
DEBT SECURITIES
FORM OF UNDERWRITING AGREEMENT
[Date]
To the Representative
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Southwestern Bell Telephone Company, a Missouri corporation (the
"Telephone Company" or "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 February 1, 1985, as
supplemented by a First Supplemental Indenture, dated as of June 1, 1991
(together, the "Indenture"), from the Telephone 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 Telephone
Company proposes to sell to the underwriters named in Schedule II hereto
("Underwriters") for whom you are acting as representative ("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 Telephone 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 Telephone Company in conformity with
the requirements of the Securities Act of 1933, as amended ("Act" or
"Securities Act"), and the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission ("Commission" or
"SEC") 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
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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 Act, including
any prospectus filed with the Commission pursuant to Rule 424(a) of the
Rules and Regulations; (ii) "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 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 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 the Telephone 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 Telephone 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 of the
Trustee under the Indenture.
(c) The Telephone 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 Telephone Company,
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<PAGE>
the execution, delivery and performance of this Agreement and any Delayed
Delivery Contracts (as defined in Paragraph 3 hereof) and compliance by
the Telephone 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 Telephone Company 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 Telephone Company or any order,
rule or regulation of any court or governmental agency having
jurisdiction over the Telephone Company; and except as required by the
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 Contract, 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 Telephone 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 Telephone Company and will constitute the legally binding obligation
of the Telephone 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 Telephone 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) The Telephone Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Missouri, 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
Telephone Company.
(g) Except as described in the Prospectus, there is no material
litigation or governmental proceeding pending or, to the knowledge of the
Telephone Company, threatened against the Telephone Company which is
reasonably expected to result in any material adverse change in the
financial condition, results of operations, business
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or prospects of the Telephone Company 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 financial condition and results of
operations of the Telephone Company, 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 the
Telephone Company in conformity with the applicable requirements of the
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 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.
(k) No order, consent, approval, authorization, registration or
qualification of or with any governmental agency or body having
jurisdiction over the Telephone Company or any of its properties is
required for the issue and sale of the Underwritten Securities or the
consummation by the Telephone Company of the
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<PAGE>
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 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.
2. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Telephone Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter
agrees, severally and not jointly, to purchase from the Telephone 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 Telephone Company and the Representative may
approve ("Delayed Delivery Contracts"). The Telephone 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
Agreement, the Telephone 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.
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4. [Reserved]
5. The Telephone 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 Telephone Company, except that the Telephone Company will
continue to be liable for the payment of expenses as set forth in Paragraph 8(i)
hereof.
Nothing contained in this Paragraph 6 shall relieve a defaulting
Underwriter of any liability it may have to the Telephone 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 Telephone 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 Telephone 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 specified in Schedule
I hereto. This date and time are sometimes referred to as the "Delivery Date."
On the Delivery Date, the
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Telephone 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 Telephone Company of the purchase price by wire transfer
of immediately available 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 Telephone 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. For purposes of Rule 15c6-1 under the Exchange Act, the
Delivery Date (if later than the otherwise applicable settlement date) shall be
the date for payment of funds and delivery of securities for all the Immediate
Delivery Underwritten Securities sold pursuant to the offering, other than
Delayed Delivery Underwritten Securities for which payment of funds and delivery
of securities shall be as hereinafter provided.
8. The Telephone Company agrees with the several Underwriters:
(a) The Telephone 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 Telephone 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;
(c) During any period when a Prospectus relating to the
Underwritten Securities is required by law to be delivered, the Telephone
Company will not file any amendment of the Registration Statement nor
will the Telephone 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
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<PAGE>
Securities), unless the Telephone Company has furnished you a copy of
such proposed amendment or supplement for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, the Telephone
Company will cause the Prospectus and any amendment or supplement thereto
to be filed with the SEC as required pursuant to Rule 424 under the
Securities Act. The Telephone Company will promptly advise you (i) when
the Prospectus or any amendment or supplement thereto shall have been
filed with the SEC 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 SEC 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 SEC 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 Telephone 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 Telephone Company will promptly (upon
filing thereof) furnish you a copy of any amendment or supplement to the
Prospectus or Registration Statement not furnished to the Representative
for prior review pursuant to exception (i) or (ii) of the first sentence
of this paragraph 8(c). The Telephone 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 Telephone Company promptly will (i)
notify you of the happening of such event, (ii) prepare and file with the
SEC, 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 you in such
quantities as the Representative may reasonably request.
(e) As soon as practicable, the Telephone Company will make
generally available to its security holders and to the Representative an
earnings statement or statements of the Telephone Company which will
satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 under the Securities Act.
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<PAGE>
(f) During a period of five years after the date hereof, the
Telephone Company will furnish to the Representative copies of all
reports and financial statements furnished by the Telephone Company to
each securities exchange on which securities issued by the Telephone
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 Telephone Company will endeavor to qualify the
Underwritten Securities for sale under the laws of such jurisdiction as
you 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 Telephone 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 Telephone 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 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 Telephone 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; and
(i) Until the termination of the offering of the Underwritten
Securities, to timely file all documents, and any amendments to
previously filed documents, required to be filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act.
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<PAGE>
9. (a) The Telephone Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of the 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 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 Telephone 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
Telephone 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 Telephone Company may
otherwise have to any Underwriter or controlling person.
(b) Each Underwriter shall indemnify and hold harmless the
Telephone Company, each of their directors, each of their officers who
signed the Registration Statement and any person who controls the
Telephone Company, within the meaning of the Act from and against any
loss, claim, damage or liability, joint or several, and any action in
respect thereof, to which the Telephone Company, or any such director,
officer or controlling person may become subject, under the 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
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 Telephone Company through the Representative by or on
behalf of that Underwriter specifically for use therein, and shall
reimburse the Telephone Company for any legal and other expenses
reasonably incurred by the Telephone 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
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<PAGE>
incurred (but no more frequently that annually). The foregoing indemnity
agreement is in addition to any liability which any Underwriter may otherwise
have to the Telephone 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 Telephone 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 which one or
more Underwriters or controlling persons are indemnified parties and by
the Telephone Company in the case of an action in which the Telephone
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
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<PAGE>
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, 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 by the Telephone 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 Telephone 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 Telephone
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 Telephone 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
Telephone 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
Telephone 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 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
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<PAGE>
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 Telephone 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 Telephone 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 Telephone Company shall have
received notice that any rating of any of the Telephone Company's unsecured
senior debt securities 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 Telephone Company's unsecured senior debt securities, 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 Telephone 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 the 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 Telephone Company contained herein, to performance by the Telephone 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
issued and prior to that time no stop
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<PAGE>
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
Telephone 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
Telephone 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 Telephone
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 Vice President and General Counsel to the Telephone
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 Telephone Company has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the State of Missouri, 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 Telephone Company;
(ii) the Indenture 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 the Telephone Company in accordance with
its terms (subject, as to
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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 Telephone Company 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 Telephone Company 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
Telephone 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 Telephone 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
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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 the Telephone Company;
(viii) no order, consent, approval, authorization,
registration or qualification of or with any governmental agency
or body having jurisdiction over the Telephone Company or any of
its properties is required for the issue and sale of the
Underwritten Securities or the consummation by the Telephone
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 Telephone Company or
the terms of any indenture or other agreement or instrument known
to such counsel and to which the Telephone Company is a party or
by which the Telephone Company or any of its assets is bound, or
any order or regulation known to such counsel to be applicable to
the Telephone Company of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Telephone Company.
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.
-16-
<PAGE>
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
Missouri 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 of fact, to the extent deemed proper, on
certificates of responsible officers of the Telephone 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 Telephone Company
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 Telephone 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 Telephone Company shall have furnished to the
Representative a certificate signed by its Chairman of the Board or its
President or a 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
Telephone 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 Telephone 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 Telephone Company and its
-17-
<PAGE>
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 Telephone Company shall have furnished to the
Representative (i) a letter of Ernst & Young LLP, addressed to the Board
of Directors of the Telephone Company and the Underwriters and dated the
later of the effective date of the Registration Statement or the date of
the filing of the Telephone 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. 72 and covering such
financial statement items as counsel for the Underwriters may reasonably
have requested and (ii) a letter of Ernst & Young LLP, 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 Telephone Company or any of its properties is
required for the issue and sale of the Underwritten Securities or the
consummation by the Telephone 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 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 Telephone 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 Telephone 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
-18-
<PAGE>
this Agreement and the proposed purchase of Immediate Delivery Underwritten
Securi ties and the solicitation of any purchases of the Delayed Delivery
Underwritten Securities, and upon demand the Telephone 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 Telephone Company
shall not be obligated to reimburse any Underwriter on account of those
expenses.
13. The Telephone Company shall be entitled to act and rely upon any
request, consent, notice or agreement by, or on behalf of, the Representative.
Any notice by the Telephone 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 Telephone Company shall be sufficient
if given in writing or by facsimile transmission confirmed promptly in writing
addressed to the Telephone Company at 175 E. Houston, San Antonio, Texas 78205,
Telecopy Number: (210) 351-3849, Attention of the Vice President-Chief Financial
Officer and Treasurer with a copy to the Vice President-General Counsel and
Secretary, 175 E. Houston, San Antonio, Texas 78205, Telecopy Number: (210)
351-3467.
14. This Agreement shall be binding upon the Underwriters, the Telephone
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 Telephone
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 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 Telephone Company, officers of the Telephone Company who have
signed the Registration Statement and any person controlling the Telephone
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.
-19-
<PAGE>
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF NEW YORK.
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 Telephone Company
and the several Underwriters.
Very truly yours,
SOUTHWESTERN BELL TELEPHONE COMPANY
By:________________________________
Title:
-20-
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
_______________________________________
For itself and as Representative of the
several Underwriters named in
Schedule II to the foregoing Agreement.
-21-
<PAGE>
SCHEDULE I
Underwriting Agreement, dated ________ __, 1997
Registration Statement No. 333-_____
Representative and Address:
Underwritten Securities:
Indenture, dated as of February 1, 1985, as supplemented by the First
Supplemental Indenture, dated as of June 1, 1991, from Southwestern Bell
Telephone Company to The Bank of New York, as Trustee (the "Indenture").
Designations:
Principal Amounts:
Dates of Maturity:
Interest Rates:
Purchase Prices:
Redemption Provisions:
<PAGE>
Form and Authorized
Denominations:
Delivery Date, Time
and Location:
Specified Funds for
Payment of Purchase Price:
The Delayed Delivery
Contracts shall have
the following terms:
-2-
<PAGE>
SCHEDULE II
Principal
Underwriter Amount
----------- -------------------
Total........................................ $
====================
<PAGE>
EXHIBIT A
SOUTHWESTERN BELL TELEPHONE COMPANY
DELAYED DELIVERY CONTRACT
-------------------------
, 199
Southwestern Bell Telephone Company
175 E. Houston
San Antonio, Texas 78205
Dear Sirs:
The undersigned hereby agrees to purchase from Southwestern Bell
Telephone Company, a Missouri corporation (the "Telephone Company"), and the
Telephone Company hereby agrees to sell to the undersigned, $ principal
amount of the Telephone Company's above-captioned securities ("Securities"),
offered by the Telephone 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
Telephone Company to the undersigned, and the undersigned will accept delivery
of such Securities and will make payment to the Telephone Company of the
purchase price therefor 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 Telephone
Company may designate, to or upon the order of the Telephone 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
<PAGE>
communication addressed to the Telephone 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.
If any of the Securities are to be delivered to the undersigned
in bearer form, (i) the undersigned hereby represents that it is not a U.S.
person (or if it is a U.S. person it is a qualified financial institution) and
agrees that it will not offer to sell such Securities, directly or indirectly,
to any U.S. person other than a qualified financial institution and (ii) if the
undersigned is a dealer, that the undersigned also (A) represents that it has
not offered or sold and agrees that it will not offer, sell, or deliver any such
Securities within the United States or, directly or indirectly, to any U.S.
person other than a qualified financial institution and is not purchasing any of
such Securities for the account of any such U.S. person and (B) will deliver to
all purchasers of such Securities from it a written confirmation, containing a
statement to the effect set forth in clauses (i) and (ii) above. As used herein,
"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; "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; and "qualified financial institution"
means a financial institution (as defined in Section 1.165-12(c)(1)(v) of the
Treasury Department regulations) that provides a written statement that it will
comply with Section 165(j)(3)(A), (B), or (C) of the Code and the regulations
thereunder. Delivery of Securities in bearer form shall be made only upon
receipt of a certificate manually signed by the undersigned, containing
substantially the following:
"This is to certify that as of the date hereof (the date of
delivery of the Securities in bearer form), the above-captioned
Securities which are to be delivered to the undersigned in bearer form
are not being acquired by or on behalf of a U.S. person, or for offer to
resell or for resale to a U.S. person or, if any beneficial owner of the
Securities is a U.S. person, such U.S. person is a financial institution
(as defined in Treasury Department Regulations Section 1.165-12(c)(1)(v))
or acquiring through a financial institution and that the Securities are
held by a financial institution that has agreed to comply with the
requirements of Section 165(j)(3)(A), (B), or (C) of the Internal Revenue
Code of 1986, and the regulations thereunder. If the undersigned is a
clearing organization, the undersigned represents that the certificate is
based on statements provided to it by its member organizations. As used
herein, "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; "U.S. person" means a
citizen or resident of the United States, a corporation, partnership or
other entity created or organized
-2-
<PAGE>
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; and a "clearing
organization" means an entity which is in the business of holding
obligations for member organizations and transferring obligations among
such members by credit or debit to the account of a member without the
necessity of physical delivery of the obligation. If the undersigned is a
dealer, the undersigned agrees to obtain a similar certificate from each
person entitled to delivery of any of the above-captioned Securities in
bearer form purchased from it. However, if the undersigned has actual
knowledge that the information contained in such certificate is false,
the undersigned will not deliver a Security in temporary or definitive
bearer form to the person who signed such certificate notwithstanding the
delivery of such certificate to the undersigned. The undersigned will be
deemed to have actual knowledge that the beneficial owner is a U.S.
person for this purpose if the undersigned has a U.S. address for the
beneficial owner of the Security."
This Contract will terminate and be of no further force and
effect after , unless (i) on or before such date it shall have been
executed and delivered by both parties hereto and (ii) the Telephone Company
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). The Telephone 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 Telephone 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 Telephone Company's sole
discretion and,
-3-
<PAGE>
without limiting the foregoing, need not be on a first-come, first-served basis.
If this Contract is acceptable to the Telephone Company, it is requested that
the Telephone Company sign the form of acceptance below and mail or deliver one
of the counterparts hereof to the undersigned at its address set forth below.
This will become a binding contract between the Telephone Company and the
undersigned when such counterpart is so mailed or delivered.
Very truly yours,
By__________________________________
____________________________________
Title
____________________________________
____________________________________
Address
Accepted as of , 199
SOUTHWESTERN BELL TELEPHONE COMPANY
By_________________________________
Title:
-4-
Southwestern Bell Telephone Company
U.S. $1,750,000,000 Medium-Term Notes, Series D
Due Nine Months or More From Date of Issue
Selling Agency Agreement
[Date]
[Agents]
Dear Sirs:
Southwestern Bell Telephone Company, a Missouri corporation (the
"Company"), confirms its agreement with each of you (collectively, the "Agents"
and individually, an "Agent") with respect to the issue and sale by the Company
of up to U.S. $1,750,000,000 aggregate principal amount (or the equivalent
thereof in one or more currencies or currency units) of its Medium-Term Notes,
Series D, Due Nine Months or More From Date of Issue (the "Notes"). The Notes
will be issued under an indenture dated as of February 1, 1985, as supplemented
by a First Supplemental Indenture dated as of June 1, 1991 (together, the
"Indenture"), from the Company to The Bank of New York, as trustee (the
"Trustee").
Unless otherwise specified in the applicable supplement to the
Prospectus referred to below, the Notes will be issued only in registered form
in minimum denominations of U.S. $1,000 and any amount in excess thereof that is
an integral multiple of U.S. $1,000 or, in the case of Notes denominated in a
currency other than U.S. dollars, the authorized denominations set forth in the
applicable supplement to the Prospectus.
The Notes will have the maturities, interest rates, if any, redemption
provisions and other terms set forth in a supplement to the Prospectus referred
to below. The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and the Medium-Term Notes, Series D Administrative
Procedures as may be agreed to from time to time by the Company, each Agent and
the Trustee (the "Procedures"). The Procedures may only be amended by written
agreement of the Company, the Agents and the Trustee.
1. Representations and Warranties. The Company represents and warrants to, and
agrees with,
<PAGE>
each of you that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and has
filed with the Securities and Exchange Commission ("SEC") a
registration statement (No. 333-______), which has become effective,
for the registration under the Securities Act of the Notes. Such
registration statement, as amended at the date of this Selling Agency
Agreement (the "Agreement"), meets the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complies in all other
material respects with said Rule. In connection with the sale of the
Notes, the Company proposes to file with the SEC pursuant to Rule 424
under the Securities Act a supplement to the form of prospectus
included in such registration statement relating to the Notes and the
plan of distribution thereof and has previously advised the Agent of
all further information (financial and other) with respect to the
Company to be set forth therein. Such registration statement, including
the exhibits thereto, as amended to the date of this Agreement, is
herein collectively called the "Registration Statement"; such
prospectus, as supplemented pursuant to the previous sentence, is
herein called the "Prospectus." Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein which were
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the date of this Agreement or the date of
the Prospectus, as the case may be; and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
date of this Agreement or the date of the Prospectus, as the case may
be, incorporated therein by reference.
(b) As of the date hereof, when any amendment to the Registration Statement
becomes effective (including the filing of any document incorporated by
reference in the Registration Statement), when any supplement to the
Prospectus is filed with the SEC, and at the date of delivery by the
Company of any Notes sold hereunder (a "Closing Date"), (i) the
Registration Statement, as amended as of any such time, the Prospectus
as supplemented as of any such time, and the Indenture will comply in
all material respects with the applicable requirements of the
Securities Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Exchange Act and the respective rules and
regulations thereunder, and (ii) neither the Registration Statement, as
amended as of any such time, nor the Prospectus as supplemented as of
any such time, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
provided, however, that the Company does not make any representations
or warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility (Form T-l) under the
Trust Indenture Act of the Trustee or (ii) the information contained in
or omitted from the Registration Statement or Prospectus in reliance
upon and in conformity with information furnished in writing
2
<PAGE>
to the Company by or on behalf of you specifically for use in
connection with the preparation of the Registration Statement and the
Prospectus.
(c) As of the date hereof, when any amendment to the Registration Statement
becomes effective (including the filing of any document incorporated by
reference in the Registration Statement), when any supplement to the
Prospectus is filed with the SEC, and at the Closing Date, 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 Notes 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 Closing Date, obtained under the
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 Notes.
2. Appointment of Agents; Solicitations by the Agents of Offers to Purchase;
Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth herein, the Company
hereby authorizes each of the Agents to act as its agent to solicit
offers for the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as
agent of the Company, to use its reasonable best efforts to solicit
offers to purchase the Notes from the Company upon the terms and
conditions set forth in the Prospectus as amended or supplemented and
in the Procedures.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Notes. Upon receipt of
instructions from the Company, the Agents will forthwith suspend
solicitation of offers to purchase Notes from the Company until such
time as the Company has advised it that such solicitation may be
resumed.
The Company agrees to pay each Agent (or jointly to two or more Agents
if such solicitation is jointly made) a commission, at the time of
settlement of each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage
specified in Schedule I hereto of the aggregate principal amount of the
Notes sold by the Company, and such commission shall be payable as
specified in the Procedures.
Subject to the provisions of this Section and to the Procedures, offers
for the purchase of Notes may be solicited by an Agent as agent for the
Company at such time and in
3
<PAGE>
such amounts as such Agent deems advisable.
The Company may appoint other agents for the purpose of soliciting
purchases of the Notes on a continuous or limited basis, provided that
such agent is engaged on the same commission schedule as the Agents
(set forth hereto as Schedule I).
(b) Subject to the terms and conditions stated herein, the Company agrees
that, whenever the Company determines to sell Notes directly to you as
principal for resale to others, it will enter into a Terms Agreement,
as defined below, relating to such sale in accordance with the
provisions of this Section 2(b). For the purposes of this Agreement,
the term "Agent" shall refer to each of you acting solely in the
capacity as agent for the Company hereunder and not as principal, the
term "Purchaser" shall refer to each of you acting solely as principal
hereunder and not as agent, and the term "you" shall refer to any of
you acting in both such capacities or in either such capacity.
Each sale of Notes to the Purchaser shall be made in accordance with
the terms of this Agreement and the Procedures and a supplemental
agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, the Purchaser. Each such
supplemental agreement (which may be in either oral or written form) is
herein referred to as a "Terms Agreement." The Purchaser's commitment
to purchase Notes pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of
the Company herein contained and shall be subject to the terms and
conditions herein set forth. Each Terms Agreement shall describe the
Notes to be purchased by the Purchaser pursuant thereto, specify the
aggregate principal amount of such Notes, the price to be paid to the
Company for such Notes, the maturity date of such Notes, the rate at
which interest will be paid on the Notes, the date and time of delivery
of payment for such Notes (the "Purchase Date"), the place of delivery
of the Notes and payment therefor, the method of payment and the
requirements, if any, for the delivery of the opinion of counsel, the
certificates from the Company or their officers, the letters from Ernst
& Young LLP, and any other accountants that have audited financial
statements included or incorporated by reference in the Registration
Statement or Prospectus, pursuant to Section 6(b) and such other
matters as determined by the parties thereto. Such Terms Agreement may
also specify the period of time referred to in Section 4(m). Any
written Terms Agreement may be in the form attached hereto as Exhibit
A.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to any Terms Agreement shall be made as agreed to between the Company
and the Purchaser as set forth in the respective Terms Agreement, not
later than the Purchase Date set forth in such Terms Agreement, against
payment of funds to the Company in the net amount due to the Company
for such Notes by the method and in the form set forth in the
respective Terms Agreement.
4
<PAGE>
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by
such Purchaser at a price equal to 100% of the principal amount thereof
less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity and (ii) may be resold by such
Purchaser at varying prices from time to time, or if set forth in the
applicable Terms Agreement and Pricing Supplement, at a fixed public
offering price. In connection with any resale of Notes purchased, a
Purchaser may use a selling or dealer group and may reallow to any
broker or dealer any portion of the discount or commission payable
pursuant hereto.
(c) The Company reserves the right to sell Notes directly to investors on
its own behalf or to purchasers (other than the Agents) acting as
principal for resale to others.
3. Offering Procedure. Each of the Agents shall communicate to the Company,
orally or in writing, each offer to purchase Notes (other than those offers
rejected by an Agent as provided herein) on terms previously communicated
by the Company to such Agent, and except as otherwise provided in the
Procedures, the Company shall have the sole right to accept such offers to
purchase Notes and may refuse any proposed purchase of Notes, as a whole or
in part, for any reason. Each of the Agents shall have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes,
as a whole or in part, and any such rejection shall not be deemed a breach
of its agreement contained herein. Each of the Agents and the Company agree
to perform the respective duties and obligations specifically provided to
be performed by them in the Procedures.
4. Agreements. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes , the Company
will not file any amendment of the Registration Statement nor will the
Company file any supplement to the Prospectus (except for (i) an
amendment or supplement consisting solely of the filing of a document
under the Exchange Act, (ii) a supplement relating to an offering of
securities other than the Notes, or (iii) a supplement relating solely
to pricing and related information concerning a particular sale of
Notes) unless the Company has furnished you a copy of such proposed
amendment or supplement for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Company will cause each
supplement to the Prospectus to be filed with the SEC as required
pursuant to Rule 424 under the Securities Act. The Company will
promptly advise you (i) when each supplement to the Prospectus shall
have been filed with the SEC 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 SEC 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 SEC of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
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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 Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will
promptly (upon filing thereof) furnish you a copy of any amendment or
supplement to the Prospectus or Registration Statement not furnished
to you for prior review pursuant to exceptions (i), (ii) or (iii) 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.
(b) If, at any time when a prospectus relating to the Notes 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 amend the
Registration Statement or to make the statements therein in 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 and regulations thereunder, the
Company promptly will (i) notify you to suspend solicitation of offers
to purchase Notes (and, if so notified by the Company, you shall
forthwith suspend such solicitation and cease using the Prospectus as
then amended or supplemented), (ii) prepare and file with the SEC,
subject to the first sentence of paragraph (a) of this Section 4, an
amendment or supplement which will correct such statement or omission
or an amendment or supplement which will effect such compliance, and
(iii) supply any such amended or supplemented Prospectus to you in
such quantities as you may reasonably request. If such amendment or
supplement, and documents, certificates and opinions furnished to you
pursuant to paragraph (g) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are reasonably
satisfactory in all respects to you, you will, upon the filing of such
amendment or supplement with the SEC and upon the effectiveness of an
amendment to the Registration Statement if such an amendment is
required, resume your obligation to solicit offers to purchase Notes
hereunder.
(c) As soon as practicable, the Company will make generally available to
its security holders and to you 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.
(d) Until the termination of the offering of the Notes, the Company will
timely file all documents, and any amendments to previously filed
documents, required to be filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act.
(e) The Company will furnish to you and to your counsel, without charge,
copies of the Registration Statement (including exhibits thereto) and
each amendment thereto which shall become effective and, so long as
delivery of a prospectus may be required by the
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Securities Act, as many copies of any preliminary Prospectus and the
Prospectus and any amendments thereof and supplements thereto as you
may reasonably request.
(f) The Company will endeavor to qualify the Notes for sale under the laws
of such jurisdictions as you may designate and will maintain such
qualifications in effect so long as required for the distribution of
the Notes , 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.
(g) The Company shall furnish to you such documents, certificates of
officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, any preliminary Prospectus, the Prospectus,
and any amendments or supplements thereto, the Indenture, the Notes,
this Agreement, the Procedures and the performance by the Company and
you of the respective obligations of each hereunder and thereunder as
you may from time to time and at any time prior to the termination of
this Agreement reasonably request.
(h) The Company shall, whether or not any sale of any Notes is
consummated, (i) pay all expenses incident to the performance of its
obligations under this Agreement, including the fees and disbursements
of its accountants and counsel, the cost of printing and delivery of
the Registration Statement, the Prospectus, all amendments thereof and
supplements thereto, the Indenture, this Agreement and all other
documents relating to the offering, the cost of preparing, printing,
packaging and delivering the Notes, the fees and disbursements,
including fees of counsel, incurred in connection with the
qualification of the Notes for sale and determination of eligibility
for investment of the Notes under the securities or Blue Sky laws of
each such jurisdiction as the Agent may reasonably designate, the fees
and disbursements of the Trustee and the fees of any agency that rates
the Notes, (ii) reimburse you on an as-needed basis for all out-of-
pocket expenses incurred by you and approved by the Company in
advance, in connection with the offering and the sale of the Notes,
and (iii) be responsible for the reasonable fees and expenses of your
counsel incurred in connection with the offering and sale of the
Notes.
(i) Each acceptance by the Company of an offer to purchase Notes (the date
of each such acceptance, an "Acceptance Date") will be deemed to be a
representation and warranty to you by the Company that neither the
Registration Statement nor the Prospectus, as then amended or
supplemented, fails to reflect any facts or events which, individually
or in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement or the Prospectus, as then
amended or supplemented, and/or includes any untrue statement of a
material fact, or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the foregoing does not
apply to (i) that part
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of the Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of you specifically for use
in connection with the preparation of the Registration Statement and
the Prospectus or any amendments thereof or supplements thereto.
(j) Each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by (i) an amendment or supplement
consisting solely of the filing of a document under the Exchange Act
unless such amendment or supplement sets forth or incorporates by
reference financial statements for a fiscal quarter or unless
otherwise requested by you, (ii) a supplement relating to an offering
of securities other than the Notes, or (iii) a supplement relating
solely to pricing and related information concerning a particular sale
of Notes), the Company will deliver or cause to be delivered forthwith
to you a certificate of it signed by its Chairman of the Board or its
President or a Vice President and its Treasurer or an Assistant
Treasurer, dated the date of the effectiveness of such amendment or
the date of filing of such supplement, in form reasonably satisfactory
to you, to the effect that the statements contained in the certificate
that was last furnished to you by it pursuant to either Section 5(d)
or this Section 4(j) are true and correct at the time of the
effectiveness of such amendment or the filing of such supplement as
though made at and as of such time (except that (i) the last day of
the fiscal quarter for which financial statements of the Company were
last filed with the SEC shall be substituted for the corresponding
date in such certificate and (ii) such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in
Section 5(d) but modified to relate to the last day of the fiscal
quarter for which financial statements of the Company were last filed
with the SEC and to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement.
(k) Each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by (i) an amendment or supplement
consisting solely of the filing of a document under the Exchange Act
unless such amendment or supplement sets forth or incorporates by
reference financial statements for a fiscal quarter or unless
otherwise requested by you, (ii) a supplement relating to an offering
of securities other than the Notes, or (iii) a supplement relating
solely to pricing and related information concerning a particular sale
of Notes), the Company shall furnish or cause to be furnished
forthwith to you a written opinion of its counsel satisfactory to you,
and, at your option, Sullivan & Cromwell shall furnish to you a
written opinion, dated the date of the effectiveness of such amendment
or the date of filing of such supplement, in form
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<PAGE>
satisfactory to you, of the same tenor as the opinion referred to in
Sections 5(b) and 5(c), respectively, but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of the effectiveness of such amendment or the filing of
such supplement or, in lieu of such opinion, counsel last furnishing
such an opinion to you may furnish you with a letter to the effect
that you may rely on such last opinion to the same extent as though it
were dated the date of such letter authorizing reliance (except that
statements in such last opinion will be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of the effectiveness of such amendment or the filing of
such supplement).
(l) Each time that the Registration Statement or the Prospectus is amended
or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is
incorporated by reference in the Registration Statement or the
Prospectus, the Company shall cause Ernst & Young LLP, independent
auditors, and any other accountants that have audited financial
statements included or incorporated by reference in the Registration
Statement and Prospectus, forthwith to furnish you a letter, dated the
date of the effectiveness of such amendment or the date of filing of
such supplement, in form satisfactory to you, of the same tenor as the
letters referred to in Section 5(e) with such changes as may be
necessary to reflect the amended and supplemental financial
information included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to the date
of such letter, provided that if the Registration Statement or the
Prospectus is amended or supplemented solely to include or incorporate
by reference unaudited financial information as of and for a fiscal
quarter, Ernst & Young LLP and any other accountants that have audited
financial statements included or incorporated by reference in the
Registration Statement and Prospectus may limit the scope of their
letter, which shall be satisfactory in form to you, to the unaudited
financial statements included or incorporated by reference in such
amendment or supplement, unless any other information included or
incorporated by reference therein of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of
the Company) is of such a nature that, in your reasonable judgment,
such letter should cover such other information.
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue
or announce the proposed issuance of any of its Debt Securities,
including Notes, which Debt Securities have terms substantially
similar to those of the Notes being purchased pursuant to such Terms
Agreement.
5. Conditions to the Obligations of the Agents. The obligation of each of the
Agents to solicit offers to purchase the Notes shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date
9
<PAGE>
of the effectiveness of any amendment to the Registration Statement
(including the filing of any document incorporated by reference therein),
as of the date any supplement to the Prospectus is filed with the SEC, as
of each Acceptance Date and as of each Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Agents the opinion of counsel
to the Company, dated the date hereof, 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
Missouri, 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;
(ii) the Indenture 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 the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights, generally from time to time in
effect and to general principles of equity); the Notes have been
duly authorized and established in conformity with the Indenture,
and, when the terms of the Notes have been duly established in
conformity with the Indenture so as not to violate or conflict
with any provisions of law or any agreement or instrument
applicable to the Company or any of its properties, when the
Notes have been duly executed by the proper officers of the
Company, registered and duly authenticated pursuant to the
Indenture and delivered to and paid for by the purchasers
thereof, the Notes will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture;
(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, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus,
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<PAGE>
and there is no franchise, contract or other document of a
character required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit, which is not
described or filed as required; and the statements included or
incorporated in the Prospectus describing any legal proceedings
or material contracts or agreements relating to the Company
fairly summarize such matters;
(iv) 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, 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 its issue date or at the
date of this Agreement, 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;
(v) this Agreement has been duly authorized, executed and delivered
by the Company;
(vi) 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 Notes 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 Closing 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 sale and distribution of the Notes; and
(vii) neither the execution and delivery of the Indenture or this
Agreement, the issue and sale of the Notes (when the terms of the
Notes have been duly established in conformity with the Indenture
so as not to violate or conflict with any provisions of law or
any agreement or instrument applicable to the Company or any of
its properties and when the Notes have been duly executed by the
proper officers of
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the Company, registered and duly authenticated pursuant to the
Indenture and delivered to and paid for by the purchasers
thereof), 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 is a party or by
which the Company or any of its assets is bound, or any order or
regulation known to such counsel to be applicable to the Company
of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company.
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 rely (A) as to matters
involving the application of laws of any jurisdiction other than the
state of Missouri or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of
good standing believed to be reliable and who are satisfactory to the
Agents and (B) as to matters of 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 (vi) above, insofar
as it relates to regulatory authorities in the states in which the
Company operates, such counsel may rely on the opinions of local
counsel satisfactory to such counsel.
(c) The Agents shall have received from Sullivan & Cromwell, counsel for
the Agents, such opinion or opinions, dated the date hereof, with
respect to the issuance and sale of the Notes, the Indenture, the
Registration Statement, the Prospectus and other related matters as
the Agents 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.
(d) The Company shall have furnished to the Agents a certificate signed by
its Chairman of the Board or its President or a 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 date hereof with the same effect as if made on the date
hereof; the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied as a condition to the obligation of the Agents to
solicit offers to purchase the Notes; and the conditions set
forth in Paragraph 5(a) have been fulfilled;
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(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 and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus.
(e) The Company shall have furnished to the Agents (i) a letter of Ernst &
Young LLP, addressed to the Board of Directors of the Company and the
Agents 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.
72 ("SAS 72") and covering such financial statement items of the
Company as the Agents may reasonably have requested; (ii) a letter of
Ernst & Young LLP, addressed to the Agents and dated the date hereof,
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 business days prior to the date of such
letter), the conclusions and findings of such firm with respect to the
financial information and other matters of the Company 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; and (iii) a letter, dated the date hereof, of any other
accountants that have audited financial statements included or
incorporated by reference in the Registration Statement and
Prospectus, addressed to the Agents, of the type described in SAS 72
and covering such financial statement items as the Agents may
reasonably request.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the
date of the letter.
(f) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus (with respect to Section
6(c) hereof, only as the Registration Statement and the Prospectus are
amended or supplemented through the date of the Terms Agreement) there
shall not have been any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its principal subsidiaries the effect of which is, in the
reasonable judgment of the Agents, so material and adverse as to make
it impractical or inadvisable to proceed with the soliciting of offers
to purchase the Notes as contemplated by the Registration Statement
and the Prospectus (or, in the case of a Terms Agreement, to proceed
with the offering or the delivery of the Notes to be purchased as
contemplated by the Terms Agreement).
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(g) Prior to the date hereof, the Company shall have furnished to the
Agents such further information, certificates and documents as the
Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Agents, this Agreement and all
obligations of the Agents hereunder may be canceled at any time by the
Agents. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be delivered
at the office of Sullivan & Cromwell, counsel for the Agents, at 125 Broad
Street, New York, NY 10004, or such other location as the parties hereto
agree, on the date hereof.
6. Conditions to the Obligations of the Purchaser. The obligations of the
Purchaser to purchase Notes pursuant to any Terms Agreement will be subject
to the accuracy of the representations and warranties on the part of the
Company herein as of the date of the respective Terms Agreement and as of
the Purchase Date thereunder, to the performance and observance by the
Company of all covenants and agreements herein contained on their part to
be performed and observed and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) To the extent required by the respective Terms Agreement, the
Purchaser shall have received, appropriately updated, (i) a
certificate of the Company, dated as of the Purchase Date, to the
effect set forth in Section 5(d), (ii) opinion of counsel to the
Company, dated as of the Purchase Date, to the effect set forth in
Section 5(b), (iii) the opinion of Sullivan & Cromwell, counsel for
the Purchaser, dated as of the Purchase Date, to the effect set forth
in Section 5(c), and (iv) letters of Ernst & Young LLP and, if
applicable, other accountants, dated as of the Purchase Date, to the
effect set forth in Section 5(e).
(c) The conditions set forth in Section 5(f) shall have been satisfied.
(d) Prior to the Purchase Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the
Purchaser may reasonably request.
(e) Subsequent to the execution of any Terms Agreement, the Company shall
not have received notice that any rating of any of the Company's
unsecured senior debt securities shall have been lowered by any
nationally recognized statistical rating organization (as
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defined in Rule 15c3-1 under the Exchange Act) or that 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.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser, the Terms Agreement
and all obligations of the Purchaser thereunder may be canceled at, or at
any time prior to, the respective Purchase Date by the Purchaser. Notice of
such cancellation shall be given to the Company in writing or by telephone
or telegraph confirmed in writing.
7. Reimbursement of the Agents' and the Purchaser's Expenses. In connection
with the sale of any Notes under this Agreement, if any condition to the
obligations of the Agents set forth in Section 5 hereof is not satisfied,
if any condition to the obligations of the Purchaser set forth in Section 6
(other than Section 6(e)) hereof is not satisfied, if any termination
pursuant to Section 9(b)(i) hereof shall occur or in the case of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason
of a default by any of the Agents, the Company will (in addition to any
other obligations hereunder) reimburse each of the Agents or the Purchaser
upon demand for all reasonable out-of-pocket expenses (including reasonable
fees and disbursements of counsel but excluding advertising expenses) that
shall have been incurred by such Agent or the Purchaser in connection with
such sale.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of you and each
person, if any, who controls any of you 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 any of
you or any such 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
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 of you and
such controlling person for any legal and other expenses reasonably
incurred by you or such 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 the Registration Statement or the Prospectus,
in reliance upon and in conformity with written information furnished
to the Company specifically for use therein. The foregoing
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indemnity agreement is in addition to any liability which the Company
may otherwise have to any of you or any controlling person.
(b) Each of you shall indemnify and hold harmless the Company, each of its
directors, each of its 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 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 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
by any of you 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 of you may
otherwise have to the Company or any of their directors, officers or
controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 8 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 Section 8, 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 Section 8(a) or 8(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 Section 8 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 the Company and one or more Agents 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
16
<PAGE>
is inappropriate under applicable standards of professional conduct
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
applicable representative in the case of an action in which any of you
or controlling persons are indemnified parties and by the Company or
any of its directors, officers or controlling persons in the case of
any action in which any of them 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 Section 8 shall for any
reason be unavailable to an indemnified party under Section 8(a) or
8(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 each
of you, on the other hand, from the offering of the Notes. 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 each of you on the other hand, from the
offering of the Notes and the relative fault of the Company, on the
one hand, and each of you, 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 each of you, on the other hand, with
respect to such offering shall be deemed to be in the same proportion
as the aggregate commissions received by each of you (in the case of a
Terms Agreement, as if such commission had been payable) pursuant to
Section 2 to the aggregate principal amount of the Notes sold. 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 by any of you, 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
Section 8(d) shall be deemed to include, for purposes of this Section
8(d), any legal or other expenses reasonably
17
<PAGE>
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 8(d), you shall not be required to contribute any amount
in excess of the amount by which the total price at which the Notes
purchased by or through you were sold to the public exceeds the amount
of any damages which any of you have 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 Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Your obligations to contribute as
provided in this Section 8(d) are several in proportion to your
respective obligations and not joint.
9. Termination. This Agreement will continue in effect until terminated as
provided in this Section 9.
(a) This Agreement may be terminated by the Company as to any Agent or any
Agent insofar as this Agreement relates to such Agent giving written
notice of such termination to such Agent or the Company. This
Agreement shall so terminate at the close of business on the first
business day following the receipt of such notice by the party to whom
such notice is given. In the event of such termination, no party shall
have any liability to the other parties hereto, except as provided in
the fourth paragraph of Section 2(a), Section 4(h), Section 7, Section
8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if prior
to such time (i) 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 Purchaser's reasonable judgment, materially
impairs the investment quality of the Notes; (ii) trading in
securities generally on the New York Stock Exchange shall have been
suspended or materially limited and the effect of which, in the
Purchaser's reasonable judgment, materially impairs the investment
quality of the Notes; (iii) a banking moratorium shall have been
declared by either federal or New York State authorities; or (iv)
there shall have occurred any outbreak or escalation of hostilities or
other calamity or crisis or the declaration by the United States of a
national emergency or war 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 Purchaser, impracticable or
inadvisable to market such Notes on the terms and in the manner
contemplated by the Prospectus.
10. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the
Company and its officers and of each of the Agents set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any of the Agents, the Company
or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and will
18
<PAGE>
survive delivery of and payment for the Notes. The provisions of the fourth
paragraph of Section 2(a), Section 4(h), Section 7 and Section 8 hereof
shall survive the termination or cancellation of this Agreement.
11. Right of Person Who Agreed to Purchase to Refuse to Purchase. A person who
has agreed to purchase and pay for Notes as a result of an offer to
purchase solicited by an Agent, may refuse to purchase such Notes if, on
the related Closing Date fixed pursuant to the Procedures, any condition
set forth in Section 5(a) or 5(f) shall not be satisfied or if, subsequent
to the Acceptance Date and on or prior to the Closing Date fixed pursuant
to the Procedures, the Company shall have received notice that any rating
of any of the Company's unsecured senior debt securities shall have been
lowered by any nationally recognized statistical rating organization (as
defined in Rule 15c3-1 under the Exchange Act) or that 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.
12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to [Agents]; to Southwestern Bell Telephone
Company at 175 E. Houston, 12th Floor, San Antonio, TX 78205, Attention:
General Counsel; and duplicate copies will be mailed, delivered or
telegraphed and confirmed to Southwestern Bell Telephone Company at 175 E.
Houston, 7th Floor, San Antonio, TX 78205, Attention: Treasurer, and to SBC
Communications Inc., 175 E. Houston, 12th Floor, San Antonio, TX 78205,
Attention: General Attorney -Corporate/SEC.
13. Successors. This Agreement will inure to the benefit of and be binding upon
each of the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and
no other person (other than the persons and to the extent referred to in
Section 11 hereof) will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the state of New York.
15. Counterparts. This Agreement may be executed by each 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.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent
19
<PAGE>
a binding agreement among the Company and each of the Agents as of the date
first set forth above.
Very truly yours,
SOUTHWESTERN BELL TELEPHONE COMPANY
By: _____________________________
The foregoing Selling Agency Agreement is hereby confirmed and accepted as of
the date first set forth above.
By: _________________________________
By: ______________________________
By: _______________________________
20
<PAGE>
SCHEDULE I
Pursuant to Section 2(a) of the Selling Agency Agreement, the Company
agrees to pay each of the Agents a commission equal to the following percentage
of the principal amount of each Note sold by such Agent:
COMMISSION
TERM RATE
From 9 months to less than 1 year..................................
From 1 year to less than 18 months.................................
From 18 months to less than 2 years................................
From 2 years to less than 3 years..................................
From 3 years to less than 4 years..................................
From 4 years to less than 5 years..................................
From 5 years to less than 6 years..................................
From 6 years to less than 7 years..................................
From 7 years to less than 10 years.................................
From 10 years up to and including 15 years.........................
From more than 15 years up to and including 20 years...............
From more than 20 years up to and including 30 years...............
More than 30 years ................................................ *
- --------------------
* The commission will be negotiated.
21
<PAGE>
EXHIBIT A
Southwestern Bell Telephone Company
Medium-Term Notes, Series D
Due Nine Months or More From Date of Issue
TERMS AGREEMENT
_______________, 19____
Southwestern Bell Telephone Company
175 E. Houston
San Antonio, Texas 78205
Attention: Treasurer
Subject in all respects to the terms and conditions of the Selling Agency
Agreement dated _____________, 1997, between [the Agents] and Southwestern Bell
Telephone Company (the "Agreement"), the undersigned agrees to purchase the
following Notes of Southwestern Bell Telephone Company:
Aggregate Principal Amount:
Specified Currency:
Form of Note: _____ Definitive Securities
_____ Permanent Global
_____ Temporary Global
Type of Note: _____ Fixed Rate
_____ Floating Rate
For Fixed Rate Notes:
Interest Rate: _____% per annum
For Floating Rate Notes:
Initial Interest Rate: _____% per annum
Exhibit A - Page 1
<PAGE>
Base Rate: _____ Commercial Paper Rate
_____ LIBOR
_____ Treasury Rate
_____ Other (specify):
Index Maturity:
Spread (if applicable): _____ basis points
Spread Multiplier (if applicable): _____%
Maximum Interest Rate (if applicable):
Minimum Interest Rate (if applicable):
Interest Reset Dates (if applicable):
Calculation Agent:
Maturity:
Initial Redemption Date:
Redemption Premium:
Interest Payment Dates:
Record Dates:
Purchase Price: _________% of Principal Amount (plus accrued interest from
________________, 199__ )
Purchase Date and Time:
Place for Delivery of Notes and
Payment Therefor:
Method of Payment:
Exhibit A - Page 2
<PAGE>
Redemption:
____ The Notes are not redeemable prior to Maturity.
____ The Notes are redeemable prior to Maturity on and after
________________, 19___ (the "Initial Redemption Date") at
prices that shall initially be ____% of the principal amount
of the Note to be redeemed and shall decline at each one-year
anniversary of the Initial Redemption Date by ____% of the
principal amount to be redeemed until the redemption price is
100% of such principal amount.
Additional terms, if any:
Modification, if any, in the requirements to deliver the
documents specified in Section 6(b) of the Agreement:
Period during which Debt Securities may not be
sold pursuant to Section 4(m) of the Agreement:
By: __________________________
Title:
Accepted:
Southwestern Bell Telephone Company
By: _________________________
Title:
Exhibit A - Page 3
October 7, 1997
Southwestern Bell Telephone Company
One Bell Center
St. Louis, Missouri 63101
Dear Sirs:
With reference to the Registration Statement on Form S-3 which Southwestern Bell
Telephone Company (the "Company") proposes to file with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
$1,750,000,000 principal amount of the Company's Debt Securities (the
"Securities"), issuable in series under an Indenture dated as of February 1,
1985, as supplemented by a First Supplemental Indenture, dated as of June 1,
1991 (together, the "Indenture"), from the Company to The Bank of New York, as
Trustee (the "Trustee"), I am of the opinion that:
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Missouri.
2. Each series of the Securities, when duly established by or pursuant
to a resolution of the Company's Board of Directors or in a supplemental
indenture, executed, authenticated and issued as provided in the Indenture and
delivered against payment, will constitute valid and legally binding obligations
of the Company entitled to the benefits of the Indenture.
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/ Alfred G. Richter, Jr.
General Counsel for
Southwestern Bell Telephone Company
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Southwestern Bell
Telephone Company for the registration of $1,655,500,000 of debt securities and
to the incorporation by reference therein of our report dated February 14, 1997,
with respect to the financial statements and financial statement schedules of
Southwestern Bell Telephone Company included in its Annual Report (Form 10-K)
for the year ended December 31, 1996, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
October 6, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
THAT, WHEREAS, SOUTHWESTERN BELL TELEPHONE COMPANY, a Missouri
corporation, hereinafter referred to as the "Company," proposes to file with the
Securities and Exchange Commission, under the provisions of the Securities Act
of 1933, as amended, a Registration Statement on Form S-3 with respect to an
issue or a series of issues of up to One Billion Seven Hundred Fifty Million
Dollars ($1,750,000,000) principal amount of debt securities; and
NOW, THEREFORE, each of the undersigned hereby constitutes and appoints
J. Cliff Eason, Richard G. Lindner, Alfred G. Richter, Jr., Donald E. Kiernan,
Roger W. Wohlert, Charles P. Allen, Wayne A. Wirtz, or any one of them, the
undersigned's attorneys for the undersigned and in the undersigned's name, place
and stead, and in each of the undersigned's offices and capacities in the
Company, to execute and file such Registration Statement, and thereafter to
execute and file any other amended registration statement and amended prospectus
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, each of the undersigned has hereunto set his or her
hand as of the 2nd day of October, 1997.
/s/ J. Cliff Eason /s/ Richard G. Lindner
- ---------------------------------- ----------------------------------------
J. Cliff Eason Richard G. Lindner
President, Chief Executive Officer Vice President, Chief Financial Officer
and Chairman of the Board and Director
/s/ Donald E. Kiernan /s/ Alfred G. Richter, Jr.
- ---------------------------------- ----------------------------------------
Donald E. Kiernan Alfred G. Richter, Jr.
Vice President, Treasurer General Counsel and Director
and Director
<PAGE>
/s/ Royce S. Caldwell /s/ Cassandra C. Carr
- ---------------------------------- ----------------------------------------
Royce S. Caldwell Cassandra C. Carr
Director Director
/s/ William E. Dreyer
- ----------------------------------
William E. Dreyer
Director
-2-
================================================================================
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 TELEPHONE COMPANY
(Exact name of obligor as specified in its charter)
A Missouri Corporation 43-0529710
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1010 Pine Street
St. Louis, Missouri 63101-3099
(Address of principal executive offices) (Zip code)
----------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, 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 Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(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.
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 17
C.F.R. 229.10(D).
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.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
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>
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 3rd day of October, 1997.
THE BANK OF NEW YORK
By:/s/THOMAS E. TABOR
--------------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
