Exhibit 1
SBC Communications Capital Corporation
U.S. $1,000,000,000 Medium-Term Notes, Series E
Due Nine Months or More From Date of Issue
Selling Agency Agreement
September 30, 1996
Salomon Brothers Inc
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Bear, Stearns & Co. Inc.
Dear Sirs:
SBC Communications Capital Corporation, formerly known as
Southwestern Bell Capital Corporation, a Delaware corporation
("Capital Corporation"), confirms its agreement with each of you
(collectively, the "Agents" and individually, an "Agent") with
respect to the issue and sale by Capital Corporation of up to
U.S. $1,000,000,000 aggregate principal amount (or the equivalent
thereof in one or more currencies or currency units) of its
Medium-Term Notes, Series E, Due Nine Months or More From Date of
Issue (the "Notes"). The Notes will be issued under an indenture
dated as of February 1, 1987, as supplemented by a First
Supplemental Indenture dated as of October 1, 1990 (together, the
"Indenture"), among Capital Corporation, SBC Communications Inc.,
formerly known as Southwestern Bell Corporation, a Delaware
corporation ("SBC"), and The Bank of New York, as trustee (the
"Trustee"). All Notes will have the benefit of the Support
Agreement dated as of November 10, 1986 (the "Support
Agreement"), entered into between Capital Corporation and SBC,
the parent company and sole stockholder of Capital Corporation.
In the Support Agreement, SBC has agreed to ensure the timely
payment of principal, premium, if any, and interest owed on debt
securities of Capital Corporation ("Debt Securities"), including
the Notes; however, no holder of such Debt Securities or other
lender ("Lender") will have recourse to or against the stock or
assets of Southwestern Bell Telephone Company, a Missouri
corporation (the "Telephone Company") and a wholly owned
subsidiary of SBC, or any interest of SBC or Capital Corporation
in the Telephone Company. SBC's obligations pursuant to the
Support Agreement with respect to Debt Securities of Capital
Corporation, including the Notes, are herein referred to as
"Support Obligations." SBC is not the issuer of the Debt
Securities and the obligations, warranties, representations and
agreements attributed to SBC herein are made solely in its
capacity as issuer of the Support Obligations; provided, however,
that the foregoing shall not in any way whatsoever limit SBC's
obligations under Section 8 hereof.
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 E Administrative
Procedures as may be agreed to from time to time by Capital
Corporation, SBC, each Agent and the Trustee (the "Procedures").
The Procedures may only be amended by written agreement of
Capital Corporation, SBC, the Agents and the Trustee.
1. Representations and Warranties. Capital Corporation and SBC
represent and warrant to, and agree with, each of you that:
(a)Capital Corporation and SBC meet the requirements for
use of Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), and have filed with the
Securities and Exchange Commission ("SEC") a
registration statement (No. 33-56909), which has become
effective, for the registration under the Securities Act
of the Notes and related Support Obligations. 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 and related Support Obligations, Capital
Corporation and SBC propose 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 related
Support Obligations and the plan of distribution thereof
and have previously advised the Agent of all further
information (financial and other) with respect to
Capital Corporation and SBC 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. Capital Corporation has been
advised by the SEC in a No-Action Letter that separate
financial information regarding Capital Corporation need
not be included in any registration statement on Form S-
3 filed by Capital Corporation and SBC with respect to
any Debt Securities and the Support Agreement. The SEC
also stated in such No-Action Letter that it will not
raise any objection if Capital Corporation does not file
periodic reports pursuant to Sections 13 and 15(d) of
the Exchange Act.
(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 Capital Corporation 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 neither Capital
Corporation nor SBC makes 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 to Capital Corporation or SBC 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
Capital Corporation or SBC or any of their properties is
required for the issue and sale of the Notes or the
consummation by Capital Corporation or SBC 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,
Capital Corporation 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 Capital Corporation.
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 Capital
Corporation, to use its reasonable best efforts to
solicit offers to purchase the Notes from Capital
Corporation upon the terms and conditions set forth in
the Prospectus as amended or supplemented and in the
Procedures.
Capital Corporation 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 Capital Corporation, the
Agents will forthwith suspend solicitation of offers to
purchase Notes from Capital Corporation until such time
as Capital Corporation has advised it that such
solicitation may be resumed.
Capital Corporation 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 Capital Corporation 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 Capital
Corporation, and such commission shall be payable as
specified in the Procedures. Capital Corporation's
obligations to pay costs and expenses under this
subparagraph shall be deemed to be "Other Obligations"
of Capital Corporation entitled to the benefits of the
Support Agreement.
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 Capital Corporation
at such time and in such amounts as such Agent deems
advisable.
Capital Corporation may appoint other agents for the
purpose of soliciting purchases of the Notes and related
Support Obligations 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,
Capital Corporation agrees that, whenever Capital
Corporation 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 Capital Corporation 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 Capital Corporation and SBC 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 Capital
Corporation 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 Capital
Corporation and SBC 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 Capital Corporation 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
Capital Corporation in the net amount due to Capital
Corporation for such Notes by the method and in the form
set forth in the respective Terms Agreement.
Unless otherwise agreed to between Capital
Corporation 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)Capital Corporation 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
Capital Corporation, 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
Capital Corporation to such Agent, and except as otherwise
provided in the Procedures, Capital Corporation 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 Capital Corporation
agree to perform the respective duties and obligations
specifically provided to be performed by them in the
Procedures.
4. Agreements. Capital Corporation and SBC agree with each of
you that:
(a)Prior to the termination of the offering of the Notes
and related Support Obligations, Capital Corporation and
SBC will not file any amendment of the Registration
Statement nor will Capital Corporation or SBC 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 Capital Corporation and SBC have 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, Capital
Corporation and SBC will cause each supplement to the
Prospectus to be filed with the SEC as required pursuant
to Rule 424 under the Securities Act. Capital
Corporation and SBC 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 proceeding for that
purpose and (v) of the receipt by Capital Corporation or
SBC of any notification with respect to the suspension
of the qualification of the Notes or related Support
Obligations for sale in any jurisdiction or the
initiation or threatening of any proceeding for such
purpose. Capital Corporation and SBC will promptly
(upon filing thereof) furnish 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). Capital
Corporation and SBC will use their best efforts to
prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal
thereof.
(b)If, at any time when a prospectus relating to the
Notes or related Support Obligations 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, Capital
Corporation and SBC promptly will (i) notify you to
suspend solicitation of offers to purchase Notes and
related Support Obligations (and, if so notified by
Capital Corporation and SBC, 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 and related Support Obligations
hereunder.
(c)As soon as practicable, SBC will make generally
available to its security holders and to you an earnings
statement or statements of SBC which will satisfy the
provisions of Section 11(a) of the Securities Act and
Rule 158 under the Securities Act.
(d)Until the termination of the offering of the Notes,
to file timely all documents, and any amendments to
previously filed documents, required to be filed by
Capital Corporation or SBC pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act.
(e)Capital Corporation 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
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)Capital Corporation will endeavor to qualify the
Notes and related Support Obligations 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 and related
Support Obligations, provided that in connection
therewith Capital Corporation and SBC shall not be
required to qualify as foreign corporations or take any
action which would subject them to general or unlimited
service of process in any jurisdiction where they are
not now so subject.
(g)Capital Corporation and SBC shall furnish to you such
documents, certificates of officers of Capital
Corporation and SBC and opinions of counsel for Capital
Corporation and SBC relating to the business, operations
and affairs of Capital Corporation and SBC, the
Registration Statement, any preliminary Prospectus, the
Prospectus, and any amendments or supplements thereto,
the Indenture, the Support Agreement, the Notes, the
Support Obligations, this Agreement, the Procedures and
the performance by Capital Corporation and SBC 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)Capital Corporation 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 Capital Corporation 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. Capital
Corporation's obligations to pay costs and expenses
under this subparagraph shall be deemed to be "Other
Obligations" of Capital Corporation entitled to the
benefits of the Support Agreement.
(i)Each acceptance by Capital Corporation 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 Capital Corporation and SBC 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 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 Capital Corporation
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), Capital Corporation and SBC will each 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(e) 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 SBC 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(e) but modified to
relate to the last day of the fiscal quarter for which
financial statements of SBC 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), Capital Corporation and SBC shall each 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 satisfactory to you, of the same tenor as the
opinion referred to in Sections 5(b), 5(c) and 5(d),
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, Capital Corporation and SBC 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(f)
with such changes as may be necessary to reflect the
amended and supplemental financial information included
or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented
to the date of such letter, provided 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 SBC) 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, neither Capital Corporation nor SBC shall
without the prior consent of the Purchaser, issue or
announce the proposed issuance of any of its Debt
Securities, including Notes or any Support Obligation
with respect thereto, 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 Capital
Corporation and SBC contained herein as of the date hereof,
as of the date 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 Capital Corporation and SBC
made in any certificates pursuant to the provisions hereof,
to the performance by Capital Corporation and SBC of their
respective 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)Capital Corporation shall have furnished to the
Agents the opinion of counsel to Capital Corporation,
dated the date hereof, to the effect that:
(i) Capital Corporation has been duly
incorporated and is validly existing as a
corporation in good standing under the laws of the
state of Delaware, 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 Capital
Corporation;
(ii) the Indenture has been duly qualified
under the Trust Indenture Act; and each of the
Indenture and the Support Agreement has been duly
authorized, executed and delivered, and constitutes
a legal, valid and binding instrument enforceable
against Capital Corporation in accordance with its
terms (subject, as to enforcement of remedies, to
applicable bankruptcy, 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 Capital
Corporation or any of its properties, when the Notes
have been duly executed by the proper officers of
Capital Corporation, 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 Capital Corporation 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 Capital
Corporation, of a character required to be disclosed
in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is
no franchise, contract or other document of a
character required to be described in the
Registration Statement or Prospectus, or to be filed
as an exhibit, which is not described or filed as
required; and the statements included or
incorporated in the Prospectus describing any legal
proceedings or material contracts or agreements
relating to Capital Corporation 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 Capital Corporation;
(vi) no order, consent, approval,
authorization, registration or qualification of or
with any governmental agency or body having
jurisdiction over Capital Corporation or any of its
properties is required for the issue and sale of the
Notes and related Support Obligations or the
consummation by Capital Corporation of the
transactions contemplated by this Agreement or the
Indenture or the Support Agreement, 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 related Support Obligations; and
(vii) neither the execution and delivery of
the Indenture, the Support Agreement or this
Agreement, the issue and sale of the Notes and
related Support Obligations (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 Capital Corporation or any of its
properties and when the Notes have been duly
executed by the proper officers of Capital
Corporation, 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 Capital Corporation or the terms of any
indenture or other agreement or instrument known to
such counsel and to which Capital Corporation is a
party or by which Capital Corporation or any of its
assets are bound, or any order or regulation known
to such counsel to be applicable to Capital
Corporation of any court, regulatory body,
administrative agency, governmental body or
arbitrator having jurisdiction over Capital
Corporation.
In rendering such opinion, such counsel may rely, as
to the execution of the Indenture by the Trustee, upon a
certificate of the Trustee setting forth the facts as to
such execution.
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws of any
jurisdiction other than the states of Delaware or
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 Capital
Corporation and public officials.
(c)SBC shall have furnished to the Agents the opinion of
its general counsel, dated the date hereof, to the
effect that:
(i) each of SBC and its principal
subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power
and authority to own its properties and conduct its
business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation
and is in good standing under the laws of each
jurisdiction which requires such qualification
wherein it owns or leases properties or conducts
business, except where the failure to qualify would
not have a material adverse effect on SBC and its
subsidiaries taken as a whole;
(ii) the Indenture has been duly qualified
under the Trust Indenture Act; and each of the
Indenture and the Support Agreement has been duly
authorized, executed and delivered, and constitutes
a legal, valid and binding instrument enforceable
against SBC in accordance with its terms (subject,
as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally
from time to time in effect and to general
principles of equity); and when the Notes have been
duly issued, delivered and paid for by the
purchasers thereof, the Support Obligations relating
thereto will constitute legal, valid and binding
obligations of SBC entitled to the benefits of the
Indenture and the Support Agreement;
(iii) to the best knowledge of such counsel,
there is no pending or threatened action, suit or
proceeding before any court or governmental agency,
authority or body or any arbitrator involving SBC or
any of its principal subsidiaries, of a character
required to be disclosed in the Registration
Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or
other document of a character required to be
described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is
not described or filed as required; and the
statements included or incorporated in the
Prospectus describing any legal proceedings or
material contracts or agreements relating to SBC or
any of its principal subsidiaries 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 the 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 SBC;
(vi) no order, consent, approval,
authorization, registration or qualification of or
with any governmental agency or body having
jurisdiction over SBC or any of its principal
subsidiaries or any of its properties is required
for the consummation of the transactions
contemplated herein 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 required under state
securities or Blue Sky laws in connection with the
sale of the Notes and related Support Obligations as
contemplated by this Agreement and such other
approvals (specified in such opinion) as have been
obtained;
(vii) neither the execution and delivery of
the Indenture, the Support Agreement or this
Agreement, the issue and sale of the Notes and
related Support Obligations, nor the consummation of
any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach
of, or constitute a default under, the charter or by-
laws of SBC or the terms of any indenture or other
agreement or instrument known to such counsel and to
which SBC is a party or is bound, or any order or
regulation known to such counsel to be applicable to
SBC of any court, regulatory body, administrative
agency, governmental body or arbitrator having
jurisdiction over SBC; and
(viii) no holders of securities of SBC have
rights to the registration of such securities under
the Registration Statement.
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 states of Delaware or
Missouri or of the United States, to the extent deemed
proper and specified in such opinion, upon the opinion
of other counsel of good standing believed to be
reliable and who are satisfactory to the Agents and (B)
as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of SBC and public
officials.
(d)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
Support Agreement, the Registration Statement, the
Prospectus and other related matters as the Agents may
reasonably require, and Capital Corporation and SBC
shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass
upon such matters.
(e)Each of Capital Corporation and SBC 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
Capital Corporation or SBC, as the case may be, in
this Agreement are true and correct in all material
respects on and as of the date hereof with the same
effect as if made on the date hereof; Capital
Corporation or SBC, as the case may be, has complied
with all the agreements and satisfied all the
conditions on its part to be performed or satisfied
as a condition to the obligation of the Agents to
solicit offers to purchase the Notes and related
Support Obligations; and the conditions set forth in
Paragraph 5(a) 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 SBC
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.
(f)Capital Corporation and SBC shall have furnished to
the Agents (i) a letter of Ernst & Young LLP, addressed
to the Boards of Directors of Capital Corporation and
SBC and dated the later of the effective date of the
Registration Statement or the date of the filing of
SBC's latest Annual Report on Form 10-K, of the type
described in the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 72
("SAS 72") and covering such financial statement items
of SBC 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 SBC
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 (f) are to such documents
as amended and supplemented at the date of the letter.
(g)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 SBC 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 and related Support Obligations 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 and related
Support Obligations to be purchased as contemplated by
the Terms Agreement).
(h)Prior to the date hereof, Capital Corporation and
SBC 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 Capital Corporation or SBC 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 Capital
Corporation and SBC herein as of the date of the respective
Terms Agreement and as of the Purchase Date thereunder, to
the performance and observance by Capital Corporation and
SBC 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 each of
Capital Corporation and SBC, dated as of the Purchase
Date, to the effect set forth in Section 5(e), (ii)
opinions of counsel to Capital Corporation and SBC,
dated as of the Purchase Date, to the effect set forth
in Sections 5(b) and 5(c), respectively, (iii) the
opinion of Sullivan & Cromwell, counsel for the
Purchaser, dated as of the Purchase Date, to the effect
set forth in Section 5(d), 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(f).
(c)The conditions set forth in Section 5(g) shall
have been satisfied.
(d)Prior to the Purchase Date, Capital Corporation
and SBC 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, Capital Corporation shall not have received
notice that any rating of any of Capital Corporation'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
Capital Corporation'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 Capital Corporation or SBC 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 and related Support
Obligations 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 Capital
Corporation or SBC to perform any agreement herein or comply
with any provision hereof other than by reason of a default
by any of the Agents, Capital Corporation 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. Capital Corporation's
obligations to pay costs and expenses under this
subparagraph shall be deemed to be "Other Obligations" of
Capital Corporation entitled to the benefits of the Support
Agreement.
8. Indemnification and Contribution.
(a)Capital Corporation and SBC jointly and severally
agree 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
Capital Corporation and SBC 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 Capital
Corporation or SBC specifically for use therein. The
foregoing indemnity agreement is in addition to any
liability which Capital Corporation or SBC may otherwise
have to any of you or any controlling person.
(b)Each of you shall indemnify and hold harmless
Capital Corporation and SBC, each of their directors,
each of their officers who signed the Registration
Statement and any person who controls Capital
Corporation or SBC within the meaning of the Act from
and against any loss, claim, damage or liability, joint
or several, and any action in respect thereof, to which
Capital Corporation or SBC, or any such director,
officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue
statement of a material fact contained in 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
Capital Corporation and SBC by any of you specifically
for use therein, and shall reimburse Capital Corporation
and SBC for any legal and other expenses reasonably
incurred by Capital Corporation or SBC or any such
director, officer or controlling person in investigating
or defending or preparing to defend against any such
loss, claim, damage, liability or action as such
expenses are incurred (but no more frequently than
annually). The foregoing indemnity agreement is in
addition to any liability which any of you may otherwise
have to Capital Corporation, SBC or any of their
directors, officers or controlling persons.
(c)Promptly after receipt by an indemnified party
under this 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 Capital Corporation or SBC 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 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 Capital Corporation or SBC or
any of their 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 Capital Corporation
and SBC, 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 Capital
Corporation and SBC, on the one hand, and each of you on
the other hand, from the offering of the Notes and
related Support Obligations and the relative fault of
Capital Corporation and SBC, 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
Capital Corporation and SBC, 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 Capital Corporation
and SBC 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 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 and related Support Obligations
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 either
Capital Corporation or SBC 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
Capital Corporation or SBC, as the case may be. This
Agreement shall so terminate at the close of business on
the first business day following the receipt of such
notice by the party to whom such notice is given. In
the event of such termination, no party shall have any
liability to the other 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 Capital Corporation or SBC 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 Capital Corporation or SBC or
their 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 Capital Corporation, SBC and their
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, Capital Corporation or SBC or any of
the officers, directors or controlling persons referred to
in Section 8 hereof, and will survive delivery of and
payment for the Notes. The provisions of 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(g) shall not be satisfied or
if, subsequent to the Acceptance Date and on or prior to the
Closing Date fixed pursuant to the Procedures, Capital
Corporation shall have received notice that any rating of
any of Capital Corporation'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 Capital Corporation's unsecured senior
debt securities.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to Salomon
Brothers Inc at Seven World Trade Center, 31st Floor, New
York, NY 10048, Attention: Medium-Term Note Department; to
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated at World Financial Center, 250 Vesey Street,
North Tower, 10th Floor, New York, NY 10281, Attention:
Medium-Term Note Product Management; to Bear, Stearns & Co.
Inc. at 245 Park Avenue, New York, NY 10167, Attention:
Medium-Term Note Department; to SBC at 175 E. Houston, 12th
Floor, San Antonio, TX 78205, Attention: General
Corporate/SEC Attorney; and if sent to Capital Corporation
will be mailed, delivered or telegraphed and confirmed to
Capital Corporation at 175 E. Houston, 7th Floor, San
Antonio, TX 78205, Attention: Senior Vice President and
Treasurer, and duplicate copies will be mailed, delivered or
telegraphed and confirmed to Capital Corporation at 175 E.
Houston, 7th Floor, San Antonio, TX 78205, Attention:
Secretary; and if sent to SBC will be mailed, delivered or
telegraphed and confirmed to SBC at 175 E. Houston, 7th
Floor, San Antonio, TX 78205, Attention: Vice President and
Assistant Treasurer.
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 a binding agreement among Capital Corporation, SBC and
each of the Agents as of the date first set forth above.
Very truly yours,
SBC COMMUNICATIONS
CAPITAL CORPORATION
By: /s/ Roger W. Wohlert
Roger W. Wohlert
Senior Vice President and
Treasurer
SBC COMMUNICATIONS INC.
By: /s/ Donald E. Kiernan
Donald E. Kiernan
Senior Vice President, Treasurer
and Chief Financial Officer
The foregoing Selling Agency Agreement is hereby confirmed and
accepted as of the date first set forth above.
SALOMON BROTHERS INC
By: /s/ Martha Bailey
Martha Bailey
Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Scott Primrose
Scott Primrose
Authorized Signatory
BEAR, STEARNS & CO. INC.
By: /s/ Tim O'Neill
Tim O'Neill
Senior Managing Director
SCHEDULE I
Pursuant to Section 2(a) of the Selling Agency Agreement,
Capital Corporation 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 .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .525%
From 7 years to less than 10 years .575%
From 10 years up to and including 15 years .600%
From more than 15 years up to and including 20 years .675%
From more than 20 years up to and including 30 years .750%
More than 30 years *
____________________
* The commission will be negotiated.
EXHIBIT A
SBC Communications Capital Corporation
Medium-Term Notes, Series E
Due Nine Months or More From Date of Issue
TERMS AGREEMENT
_______________, 19____
SBC Communications Capital Corporation
175 E. Houston, 7th Floor
San Antonio, TX 78205
Attention: Senior Vice President and Treasurer
Subject in all respects to the terms and conditions of the
Selling Agency Agreement dated September 30, 1996, among Salomon
Brothers Inc, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Bear, Stearns & Co. Inc., SBC
Communications Inc. and you (the "Agreement"), the undersigned
agrees to purchase the following Notes of SBC Communications
Capital Corporation:
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
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:
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:
SBC Communications Capital Corporation
By: _________________________
Title: