Document:

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Obligor File Name    Obligor #   Obligation Number   Officer #     Amount

                                                                   $16,000,000
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                                                               Chicago, Illinois
                                                     Dated as of August 30, 1999

                            Call On Term-Term Note

This Note has been executed by ONEPOINT COMMUNICATIONS CORP., a corporation
formed under the laws of the State of Delaware ("Borrower").
                                                 --------

FOR VALUE RECEIVED, on or before January 1, 2004 (the "Maturity Date"), Borrower
                                                       -------------
promises to pay to the order of THE NORTHERN TRUST COMPANY, an Illinois banking
corporation (hereafter, together with any subsequent holder hereof, called
"Lender"), at its office at 265 East Deerpath, Lake Forest, Illinois 60045, or
 ------
at such other place as Lender may direct, the lesser of (i) the principal sum of
SIXTEEN MILLION AND NO/100 United States Dollars ($16,000,000) (the "Facility
                                                                     --------
Amount") or (ii) the sum of (A) the outstanding principal amount of Loans as
------
endorsed on any grid attached to this Note (or recorded in Lender's books and
records, if Lender is the holder hereof) plus (B) the aggregate undrawn face
amount of all issued and unexpired Letters of Credit (hereinafter defined) plus
the aggregate drawn and unreimbursed amount in respect of any Letter of Credit
(whether expired or unexpired) (the amount in clause B only is hereinafter
referred to as the "L/C Amount").  The amount of principal outstanding on the
                    ----------
Loans as of the close of business on December 15, 1999 (the "Final Drawdown
                                                             --------------
Date") shall be converted into a term loan which shall be payable in four (4)
----
consecutive quarterly payments of $120,000 each, four (4) consecutive quarterly
payments of $240,000 each, four (4) consecutive quarterly payments of $1,080,000
each, four (4) consecutive quarterly payments of $1,580,000 each, and a final
installment of all then remaining unpaid principal of the Loans and the L/C
Amount, payable on the first day of each January, April, July and October of
each year, beginning on January 1, 2000; provided that notwithstanding the
                                         --------
foregoing, the quarterly payments hereunder shall be reduced in an amount equal
to any reduction of the stated amount available for drawing under any Letter of
Credit occurring during such quarter; provided, further that, notwithstanding
                                      --------  -------
the foregoing, any and all remaining outstanding principal on the Loans plus the
L/C Amount shall be due and payable in full on the Maturity Date.  Each advance
of principal hereunder and the term loan are hereafter sometimes referred to as
the "Loan(s)"; the period from the date hereof to and including the Final
     -------
Drawdown Date is referred to as the "Drawdown Period" and the period thereafter
                                     ---------------
is referred to as the "Payback Period".  Except as otherwise provided in Section
                       --------------                                    -------
1.2, no additional advances of principal or issuances of Letters of Credit shall
---
be made after the Final Drawdown Date.  The aggregate amount of Loans shall not
exceed the Facility Amount less the L/C Amount at any time; amounts borrowed
which are repaid may not be reborrowed.  Lender has no obligation to refinance
this Note.

Lender is hereby authorized by Borrower at any time and from time to time at
Lender's sole option to attach a schedule (grid) to this Note and to endorse
thereon notations with respect to each Loan specifying the date and principal
amount thereof, the applicable interest rate and rate
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option, and the date and amount of each payment of principal and interest made
by Borrower with respect to each such Loan. Absent manifest error, Lender's
endorsements as well as its records relating to Loans shall be rebuttably
presumptive evidence of the outstanding principal and interest on the Loans,
and, in the event of inconsistency, shall prevail over any records of Borrower
and any written confirmations of Loans given by Borrower; provided, however,
                                                          --------  -------
that Lender has provided Borrower with Lender's standard transaction
confirmation tickets at or about the time of each Loan and Borrower has not
objected thereto within 10 days of issue thereof.

Each request for a Loan or Letter of Credit shall be deemed to be a
representation and warranty by Borrower to Lender that: (i) no Event of Default
or Unmatured Event of Default (in each case as defined below) has occurred and
is continuing as of the date of such request or would result from the making of
the Loan or issuance of such Letter of Credit; (ii) Borrower's representations
and warranties herein, in any Letter of Credit Application and in the other
documents delivered in connection herewith or therewith are true and correct as
of such date as though made on such date and (iii) the aggregate amount of Loans
outstanding plus the L/C Amount does not exceed the Facility Amount. Upon
receipt of each Loan or Letter of Credit issuance request, Lender in its sole
discretion shall have the right to request that Borrower provide to Lender,
prior to Lender's funding of the Loan or issuance of such Letter of Credit, a
certificate executed by Borrower's President, Treasurer, or Chief Financial
Officer to such effect.

1.   LETTERS OF CREDIT

     1.1. LETTERS OF CREDIT.  The Borrower may from time to time during the
          -----------------
Drawdown Period request that the Lender issue its documentary commercial or
standby letters of credit (as the same may be amended, renewed, extended or
modified from time to time, collectively called the "Letters of Credit" and
                                                     -----------------
individually called a "Letter of Credit") for the account of the Borrower in
                       ----------------
such face amounts as the Borrower may request up to the Facility Amount less the
L/C Amount.  Each Letter of Credit that the Lender issues shall be in form and
substance satisfactory to the Lender and shall have a fixed expiration date
occurring not more than one year after the date of issuance thereof (and in no
event later than the Maturity Date).  Subject to the terms and conditions of
this Note, Letters of Credit shall be issued by the Lender only upon its receipt
at least two (2) banking days prior to the requested date of issuance of a
written application and agreement (as the same may be amended, modified or
supplemented from time to time, collectively called the "Letter of Credit
                                                         ----------------
Applications" and individually called a "Letter of Credit Application") for the
------------                             ----------------------------
issuance of a Letter of Credit.  Each Letter of Credit Application shall be made
on the Lender's form, shall specify (a) the face amount requested, (b) the
tenor, (c) the documents (if any) required to be presented and (d) any other
information which the Lender may require, and shall be duly executed on the
Borrower's behalf by an authorized officer.  In addition to the terms and
conditions of this Note, each Letter of Credit shall be issued subject to the
terms and conditions set forth in or applying in connection with the Letter of
Credit Application for such Letter of Credit.  Unless otherwise expressly
provided herein, the terms of the Letter of Credit Application shall control.

     1.2. LETTER OF CREDIT LOANS.  If the Borrower shall ever fail to reimburse
          ----------------------
the Lender in full in accordance with the terms of the applicable Letter of
Credit Application for all

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amounts paid or to be paid by the Lender or its agent or any party on the
Lender's behalf on any item drawn or presented under any Letter of Credit, the
Lender shall make, and the Borrower shall accept, a Loan hereunder in the amount
of the Borrower's reimbursement obligation. The proceeds of such Loan shall be
paid directly to the Lender to reimburse it for all amounts paid or to be paid
under such Letter of Credit. Each such loan shall be treated as a Loan hereunder
for all purposes.

2.   INTEREST AND FEES.

     2.1. INTEREST RATES.  The unpaid principal amount from time to time
          --------------
outstanding hereunder shall bear interest as the following rates per year:

          (a)  before maturity of any Loan, whether by acceleration or
     otherwise, at the option of Borrower, subject to the terms hereof at a rate
     equal to:

               (i)   the "Prime-Based Rate," which shall mean the Prime Rate (as
                          ----------------
               defined below) less  3/4 of 1%.  Changes in the rate of interest
               on the Loans resulting from a change in the Prime Rate shall take
               effect on the date set forth in each announcement for a change in
               the Prime Rate.  "Prime Rate" means the rate announced from time
               to time by the Lender called its prime rate, which may not at any
               time be the lowest rate charged by the Lender;

               (ii)  "LIBOR," which shall mean that fixed rate of interest per
                      -----
               year for deposits with maturity periods of one, two or three
               months (which maturity period Borrower shall select subject to
               the terms stated herein) in United States Dollars offered to
               Lender in or through the London or another offshore interbank
               market, as determined by the Lender in its sole discretion for or
               as of the borrowing date requested by the Borrower, divided by
                                                                   ------- --
               one minus any applicable reserve requirement (expressed as a
               decimal) on Eurodollar deposits of the same amount and maturity
               as determined by Lender in its sole discretion, plus 50 basis
                                                               ----
               points; or

               (iii) the "Federal Funds Rate," defined as the rate on overnight
                          ------------------
               Federal funds transactions as determined by the Lender in its
               sole discretion, plus 50 basis points.  In the case of a
                                ----
               Saturday, Sunday or legal holding, the Federal Funds Rate shall
               be the rate applicable on the immediately preceding day for which
               such weighted average rate is reported.

          (b)  after the maturity of any Loan, until paid, at a rate equal to 2%
     in addition to the Prime Rate (but not less than the Prime Rate in effect
     at maturity).

     2.2. RATE SELECTION.  Borrower shall select and change its selection of the
          --------------
interest rate as between the Prime-Based Rate, Federal Funds Rate and LIBOR to
apply to at least $100,000 and in integral multiples of $100,000 thereafter (or
the remaining amount available hereunder) of any advance (Loan), subject to the
requirements herein stated:

          (a)  At the time any advance is made;

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          (b)  At the expiration of the particular LIBOR maturity period
     selected for the outstanding principal balance of any advance currently
     bearing interest at the LIBOR Rate; and

          (c)  At any time for the outstanding principal balance of any advance
     currently bearing interest at the Prime-Based Rate or Federal Funds Rate.

     2.3. RATE CHANGES AND NOTIFICATIONS.
          ------------------------------

          (a)  LIBOR. If Borrower wishes to borrow funds at LIBOR or if Borrower
               -----
     wishes to change the rate of interest on any advance, within the limits
     described above, from any other rate to LIBOR, it shall, not less than
     three banking days of the Lender prior to the banking day of the Lender on
     which such rate is to take effect, give Lender written or telephonic notice
     thereof, which shall be irrevocable.  Such notice shall specify the advance
     to which LIBOR is to apply, and, in addition, the desired LIBOR maturity
     period (but not to exceed the Maturity Date unless the Lender consents
     otherwise).

          (b)  Failure to Notify.  If Borrower does not notify Lender at the
               -----------------
     expiration of a selected maturity period with respect to any principal
     outstanding at LIBOR, then in the absence of such notice Borrower shall be
     deemed to have elected to have such principal accrue interest after the
     respective LIBOR maturity period at the Prime-Based Rate.

          (c)  Federal Funds Rate/Prime Based Rate. If Borrower wishes to borrow
               -----------------------------------
     money at the Federal Funds Rate or the Prime-Based Rate, or to change the
     interest rate from the Federal Funds Rate to or from the Prime-Based Rate,
     it shall notify Lender on the date of borrowing or conversion; if any such
     notification is not received before 10:00 AM Chicago time on a banking day
     of the Lender, at Lender's option the borrowing or conversion may not be
     effected until the next banking day.  If Borrower does not notify Lender as
     to its selection of the interest rate option with respect to any new
     advance of principal, then in the absence of such notice Borrower shall be
     deemed to have elected to have such advance accrue interest at the Prime-
     Based Rate.

     2.4. INTEREST PAYMENT DATES.  Accrued interest shall be paid in respect of:
          ----------------------
each portion of principal to which:

          (a)  the Prime-Based Rate or the Federal Funds Rate applies, quarterly
     on the first day of each January, April, July and October of each year,
     beginning with the first of such dates to occur after the date of the first
     advance, at maturity of this Note, and upon payment in full, whichever is
     earlier or more frequent; and

          (b)  LIBOR applies, monthly on the first day of each month, at the end
     of each respective maturity period (unless interest is payable monthly as
     provided above), at maturity of this Note, and upon payment in full,
     whichever is earlier or more frequent.

After maturity, interest shall be payable upon demand.

                                       4
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     2.5. ADDITIONAL PROVISIONS WITH RESPECT TO FEDERAL FUNDS RATE AND LIBOR
          ------------------------------------------------------------------
LOANS.
-----

     The selection by Borrower of the Federal Funds Rate or LIBOR and the
maintenance of advances at such rate shall be subject to the following
additional terms and conditions:

          (a)  Availability of Deposits at a Determinable Rate.  If, after
               -----------------------------------------------
     Borrower has elected to borrow or maintain any advance at LIBOR or the
     Federal Funds Rate, Lender notifies Borrower that:

               (i)  With respect to LIBOR, United States dollar deposits in the
               amount and for the maturity requested are not available to Lender
               in the London interbank market, or

               (ii) Reasonable means do not exist for Lender to determine the
               Federal Funds Rate, or LIBOR for the amount and maturity
               requested, all as determined by the Lender in its sole
               discretion, then the principal subject or to be subject to LIBOR
               or the Federal Funds Rate, as applicable, shall accrue or shall
               continue to accrue interest at the Prime-Based Rate.

          (b)  Prohibition of Making, Maintaining, or Repayment or Principal at
               ----------------------------------------------------------------
     LIBOR or Federal Funds Rate.  If any treaty, statute, regulation,
     ---------------------------
     interpretation thereof, or any directive, guideline, or otherwise by a
     central bank or fiscal authority (whether or not having the force of law)
     shall either prohibit or extend the time at which any principal subject to
     LIBOR or the Federal Funds Rate may be purchased, maintained, or repaid,
     then on and as of the date the prohibition becomes effective, the principal
     subject to that prohibition shall continue at the Prime-Based Rate.

          (c)  Payments of Principal and Interest to be Net of Any Taxes or
               ------------------------------------------------------------
     Costs.  In the event that principal outstanding hereunder is at LIBOR and
     -----
     Lender incurs taxes and costs from such principal, all payments of
     principal and interest shall be made net of all such taxes and costs
     incurred by Lender.  Without limiting the generality of the preceding
     obligation, illustrations of such taxes and costs are:

               (i)  Taxes (or the withholding of amounts for taxes) of any
               nature whatsoever including income, excise, and interest
               equalization taxes (other than income taxes imposed by the United
               States or any state thereof on the income of Lender), as well as
               all levies, imposts, duties, or fees whether now in existence or
               resulting from a change in, or promulgation of, any treaty,
               statute, regulation, interpretation thereof, or any directive,
               guideline, or otherwise, by a central bank or fiscal authority
               (whether or not having the force of law) or a change in the basis
               of, or time of payment of, such taxes and other amounts resulting
               there from;

               (ii) Any reserve or special deposit requirements against assets
               or liabilities of, or deposits with or for the account of, Lender
               with respect to principal outstanding at LIBOR (including those
               imposed under

                                       5
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               Regulation D of the Federal Reserve Board) or resulting from a
               change in, or the promulgation of, such requirements by treaty,
               statute, regulation, interpretation thereof, or any directive,
               guideline, or otherwise by a central bank or fiscal authority
               (whether or not having the force of law);

               (iii) Any other costs resulting from compliance with treaties,
               statutes, regulations, interpretations, or any directives or
               guidelines, or otherwise by a central bank or fiscal authority
               (whether or not having the force of law);

               (iv)  Any loss (including loss of anticipated profits) or expense
               incurred by reason of the liquidation or re-employment of
               deposits acquired by Lender to make advances or maintain
               principal outstanding at LIBOR:

                     (A) As the result of a voluntary prepayment at a date other
                     than the maturity date selected for principal outstanding
                     at LIBOR;

                     (B) As the result of a mandatory repayment at a date other
                     than the maturity date selected for principal outstanding
                     at LIBOR as a result of (i) the occurrence of an Event of
                     Default and the acceleration of any portion of the
                     indebtedness hereunder, or (ii) the Maturity Date occurring
                     prior to the LIBOR maturity date due to Borrower's
                     selection of a LIBOR maturity period which extends beyond
                     the Maturity Date; or

                     (C) As the result of a prohibition on making, maintaining,
                     or repaying principal outstanding at LIBOR.

If Lender incurs any such taxes or costs, Borrower, upon demand in writing
specifying such taxes and costs, shall promptly pay them; save for manifest
error Lender's specification shall be presumptively deemed correct.  All
advances made at LIBOR shall be conclusively deemed to have been funded by or on
behalf of Lender in the London interbank market by the purchase of deposits
corresponding in amount and maturity to the amount and interest periods selected
(or deemed to have been selected) by Borrower under this Note.

     2.6. LETTER OF CREDIT FEES.  In consideration of the Lender's issuance of
          ---------------------
any Letter of Credit, the Borrower agrees to pay the Lender:

          (a)  a fee equal to $200 payable on the issuance of each Letter of
     Credit;

          (b)  a fee equal to $100 payable upon the date of any amendment or
     renewal of any Letter of Credit outstanding;

          (c)  a commission ("Letter of Credit Fee") for the period commencing
                              --------------------
     on the issuance date of each Letter of Credit and ending on the expiration
     date of such Letter of Credit equal to .5% per annum of the face amount of
     the Letter of Credit. The accrued Letter of Credit Fee in respect of a
     Letter of Credit shall be payable in arrears on each

                                       6
<PAGE>

     January, April, July and October and on the earliest of the expiration date
     of such Letter of Credit, the date the Facility Amount is terminated or the
     Maturity Date.

3.   PAYMENT.

     3.1. PAYMENT AND PREPAYMENT.  Borrower may from time to time, upon at least
          ----------------------
three days' prior written notice to Lender, prepay any principal or
reimbursement obligation under a Letter of Credit Application bearing interest
at the Prime-Based Rate or the Federal Funds Rate in whole or in part at any
time and may prepay any principal bearing interest at LIBOR at the end of the
maturity period chosen or agreed to by Borrower applicable to the advance or
portion of the advance being prepaid, without premium or penalty, provided that
any partial prepayment shall be in an aggregate principal amount of at least
$10,000.  Any prepayment of an amount bearing interest at LIBOR at a date other
than the maturity date applicable to the advance or the portion of the advance
being prepaid shall be subject to the provisions of Section 2.5.  All
                                                    ------------
prepayments of principal shall include interest accrued to the date of
prepayment on the principal amount being prepaid.

     3.2. MANDATORY PREPAYMENT.  In the event that twenty percent (20%) or more
          --------------------
of the issued and outstanding shares of Borrower are held, directly or
indirectly, by persons not owning shares of the Borrower, directly or
indirectly, on April 29, 1998 or substantially all the assets of the Borrower
are sold, then on the date such event shall occur, the Borrower immediately
agrees to prepay the entire outstanding principal amount of the Loans, the L/C
Amount and all unpaid and accrued interest on the Loans and the L/C Amount and
acknowledges and agrees that any commitment to lend hereunder or to issue any
Letters of Credit is terminated without further notice or action on the part of
the Lender.  In the event that the sum of (a) the aggregate unpaid principal
amount of all Loans, plus (b) the aggregate undrawn face amount of all issued
                     ----
and unexpired Letters of Credit, plus (c) the aggregate unreimbursed amount in
                                 ----
respect of any Letters of Credit (whether expired or unexpired) shall at any
time exceed the Facility Amount, the Borrower shall, within three (3) calendar
days of the occurrence of such event, take one or more of the following actions
to eliminate such excess:  (i) prepay the unpaid principal of the Loans in an
amount sufficient such that the sum of clauses (a), (b) and (c) do not exceed
                                       -----------  ---     ---
the Facility Amount, (ii) pay to the Lender the unreimbursed amount in respect
of any amount drawn under any Letter of Credit (whether expired or unexpired) in
an amount sufficient such that the sum of clauses (a), (b) and (c) do not exceed
                                          -----------  ---     ---
the Facility Amount, or (iii) provide the Lender with cash collateral to secure
the Borrower's reimbursement obligation with respect to the undrawn face amount
under any then issued and unexpired Letter of Credit in an amount sufficient
such that the sum of clauses (a), (b) and (c) do not exceed the Facility Amount.
                     -----------  ---     ---
Any prepayment of an amount bearing interest at LIBOR on a date other than the
maturity date applicable to the advance or portion of the advance being prepaid
shall be subject to the provisions of Section 2.5.
                                      -----------

     3.3. BASIS OF COMPUTATION.  Interest and the Letter of Credit Fee shall be
          --------------------
computed for the actual number of days elapsed on the basis of a year consisting
of 360 days, including the date a Loan is made or a Letter of Credit is issued
and excluding the date a Loan or any portion thereof is paid or prepaid or a
Letter of Credit expires.

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4.   REFERENCES TO FACILITY TYPE, COLLATERAL, GUARANTIES, OTHER AGREEMENTS.

     4.1. FACILITY TYPE.  Lender intends to make available to Borrower the Loans
          -------------
as outlined herein unless an Event of Default has occurred and is continuing.

     4.2. GUARANTY.  Payment of this Note and the reimbursement obligations
          --------
under any Letter of Credit Application have been unconditionally guaranteed by
SBC Communications Inc. (together with its successors and assigns, the
"Guarantor") pursuant to a guaranty (as amended, modified or supplemented, the
 ---------
"Guaranty") in form and substance satisfactory to Lender.
 --------

5.   USE OF PROCEEDS.  Borrower represents and warrants that the proceeds of
this Note will be used solely for business purposes, and not for personal,
family or household use, within the meaning of Federal Truth in Lending and
similar state laws and regulations.

6.   REPRESENTATIONS.

     Borrower hereby represents and warrants to Lender that:

          (a)  Borrower and any "Subsidiary" (as defined below) are duly
     organized, validly existing and in good standing under the laws of their
     state of formation, are duly qualified, in good standing and authorized to
     do business in each jurisdiction where failure to do so might have a
     material adverse impact on the consolidated assets, condition or prospects
     of Borrower; the execution, delivery and performance of this Note, any
     Letter of Credit Application and all related documents and instruments are
     within Borrower's corporate powers and have been authorized by all
     necessary corporate action;

          (b)  the execution, delivery and performance of this Note, any Letter
     of Credit Application and all related documents and instruments have
     received any and all necessary governmental approval, and do not and will
     not contravene or conflict with any provision of law or of the articles of
     incorporation or by-laws or similar agreement of Borrower or any agreement
     affecting Borrower or its property; and

          (c)  there has been no material adverse change in the business,
     condition, properties, assets, operations or prospects of Borrower or the
     Guarantor since the date of the latest financial statements provided on
     behalf of Borrower and Guarantor to Lender prior to the execution of this
     Note.

"Subsidiary" means any corporation, partnership, joint venture, trust, or other
 ----------
legal entity of which Borrower owns directly or indirectly fifty percent (50%)
or more of the outstanding voting stock or interest, or of which Borrower has
effective control, by contract or otherwise.

                                       8
<PAGE>

7.   EVENTS OF DEFAULT.  The occurrence of any of the following shall constitute
an "Event of Default":
    ----------------

          (a)  failure to pay, when and as due, any principal, interest or other
     amounts payable hereunder or any reimbursement obligation under any Letter
     of Credit Application; failure to comply with or perform any agreement or
     covenant of Borrower contained herein, which failure shall have continued
     unremedied for a period of 10 days after written notice thereof from Lender
     to Borrower;

          (b)  any default, event of default, or similar event shall occur or
     continue under any other instrument, document, note, agreement, Letter of
     Credit Application or guaranty delivered to Lender in connection with this
     Note (including without limitation, the Guaranty), which failure shall have
     continued unremedied after the expiration of any grace period therein; or
     any such instrument, document, note, agreement, Letter of Credit
     Application or guaranty shall not be, or shall cease to be, enforceable in
     accordance with its terms;

          (c)  failure of Borrower or any of its Subsidiaries or the Guarantor
     to pay when due any principal of or interest on or any other amount payable
     in respect of one or more items of indebtedness or reimbursement obligation
     in an aggregate amount in excess of $5,000,000 ($100,000,000 in the case of
     the Guarantor only), in each case beyond the end of any grace period
     provided therefor, or any breach or default by Borrower or any of its
     Subsidiaries or the Guarantor with respect to any term of one or more terms
     of indebtedness or reimbursement obligation in the aggregate principal
     amount in excess of $5,000,000 ($100,000,000 in the case of the Guarantor
     only) shall occur if the effect of such breach or default is to cause, or
     permit the holders of that indebtedness to cause, that indebtedness to
     become due and payable prior to its stated maturity;

          (d)  any representation, warranty, schedule, certificate, financial
     statement, report, notice, or other writing furnished by or on behalf of
     Borrower, any Subsidiary or Guarantor to Lender is false or misleading in
     any material respect on the date as of which the facts therein set forth
     are stated or certified;

          (e)  the Guaranty or any pledge of collateral security for this Note
     shall be repudiated or become unenforceable or incapable of performance;

          (f)  Borrower, any Subsidiary or Guarantor shall fail to maintain
     their existence in good standing in their state of formation or shall fail
     to be duly qualified, in good standing and authorized to do business in
     each jurisdiction where failure to do so is reasonably likely to have a
     material adverse impact on the consolidated assets, condition or prospects
     of Borrower and such failure is not cured within ten (10) days of the
     Borrower, such Subsidiary or the Guarantor having actual notice that they
     are not in good standing or duly qualified;

          (g)  Borrower, any Subsidiary or Guarantor shall dissolve, liquidate,
     merge, consolidate, or cease to be in existence for any reason; provided
     that, the Borrower or any Subsidiary may merge or consolidate with
     Guarantor or any one or more Subsidiaries of

                                       9
<PAGE>

     Borrower or with any other entity if, before and after giving effect
     thereto, no Event of Default shall have occurred and be continuing and the
     surviving entity assumes all the obligations and duties of the Borrower
     under this Note and the obligations of the Borrower continue to be
     guaranteed by a creditworthy entity and in form and substance satisfactory
     to the Lender; provided further that this clause (g) shall not apply to any
                                               ----------
     Subsidiary to be liquidated or dissolved if the Board of Directors of such
     Subsidiary shall determine that the preservation of the existence of such
     Subsidiary is no longer desirable in the conduct of business of the
     Borrower and its Subsidiaries, and that the loss thereof is not
     disadvantageous in any material respect to Lender, as reasonably determined
     by the Lender;

          (h)  James A. Otterbeck and the Guarantor in the aggregate shall cease
     to own, directly or indirectly, at least 51% of the issued and outstanding
     common stock of Borrower entitled to vote for the election of directors of
     Borrower;

          (i)  any proceeding (judicial or administrative) shall be commenced
     against Borrower, any Subsidiary or the Guarantor, or with respect to any
     assets of Borrower, any Subsidiary or the Guarantor which could reasonably
     be expected to have a material and adverse effect on the assets, condition
     or prospects of Borrower, any Subsidiary or the Guarantor; or final
     judgment(s) and/or settlement(s) in an aggregate amount in excess of (i) in
     the case of the Guarantor, TWENTY-FIVE MILLION AND NO/100 UNITED STATES
     DOLLARS ($25,000,000.00), or (ii) in the case of the Borrower or any
     Subsidiary, ONE MILLION AND NO/100 UNITED STATES DOLLARS ($1,000,000), in
     each case in excess of insurance for which the insurer has confirmed
     coverage in writing, a copy of which writing has been furnished to Lender,
     shall be entered or agreed to in any suit or action;

          (j)  any notice of a federal tax lien against Borrower in excess of
     $1,000,000 shall be filed with any public recorder and such lien is not
     vacated, discharged, stayed or bonded over for a period of 60 days;

          (k)  the senior unsecured debt rating of Guarantor shall be less than
     BBB by Standard & Poors, a division of McGraw Hill Company, Inc. or Baa by
     Moody's Investors Services, Inc.;

          (l)  any bankruptcy, insolvency, reorganization, arrangement,
     readjustment, liquidation, dissolution, or similar proceeding, domestic or
     foreign, is instituted by or against Borrower, any Subsidiary or the
     Guarantor and in the case of an involuntary proceeding is not dismissed
     within 60 days; or Borrower, any Subsidiary or the Guarantor shall take any
     steps toward, or to authorize, such a proceeding; or

          (m)  Borrower, any Subsidiary or any Guarantor shall become insolvent,
     generally shall fail or be unable to pay its debts as they mature, shall
     admit in writing its inability to pay its debts as they mature, shall make
     a general assignment for the benefit of its creditors, shall enter into any
     composition or similar agreement, or shall suspend the transaction of all
     or a substantial portion of its usual business.

                                       10
<PAGE>

8.   DEFAULT REMEDIES.

          (a)  Upon the occurrence and during the continuance of any Event of
     Default specified in Section 7(a)-(k), Lender at its option may declare
                          -----------------
     this Note and the L/C Amount (principal, interest and other amounts)
     immediately due and payable without notice or demand of any kind.  Upon the
     occurrence of any Event of Default specified in Section 7(l)-(m), this Note
                                                     ----------------
     and the L/C Amount (principal, interest and other amounts) shall be
     immediately and automatically due and payable without action of any kind on
     the part of Lender.  Upon the occurrence and during the continuance of any
     Event of Default, Lender may exercise any rights and remedies under this
     Note, any Letter of Credit Application, any related document or instrument,
     and at law or in equity.  In addition, the Lender may in the case of an
     Event of Default (other than one referred to under Section 7(l) or (m) of
                                                        ------------    ---
     this Note) or shall (in the case of an Event of Default under Section 7(l)
                                                                   ------------
     or (m) of this Note) require the Borrower to (i) deliver to the Lender cash
        ---
     collateral to secure the Borrower's reimbursement obligations with respect
     to the undrawn face amount under any of the then issued and unexpired
     Letters of Credit and (ii) pay to the Lender the unreimbursed amount in
     respect of any amount drawn under any Letter of Credit (whether expired or
     unexpired).

          (b)  Lender may, by written notice to Borrower, at any time and from
     time to time, waive any Event of Default or "Unmatured Event of Default"
     (as defined below), which shall be for such period and subject to such
     conditions as shall be specified in any such notice.  In the case of any
     such waiver, Lender and Borrower shall be restored to their former position
     and rights hereunder, and any Event of Default or Unmatured Event of
     Default so waived shall be deemed to be cured and not continuing; but no
     such waiver shall extend to or impair any subsequent or other Event of
     Default or Unmatured Event of Default.  No failure to exercise, and no
     delay in exercising, on the part of Lender of any right, power or privilege
     hereunder shall preclude any other or further exercise thereof or the
     exercise of any other right, power or privilege.  The rights and remedies
     of Lender herein provided are cumulative and not exclusive of any rights or
     remedies provided by law.  "Unmatured Event of Default" means any event or
                                 --------------------------
     condition which would become an Event of Default with notice or the passage
     of time or both.

9.   NO INTEREST OVER LEGAL RATE.

     Borrower does not intend or expect to pay, nor does Lender intend or expect
to charge, accept or collect any interest which, when added to any fee or other
charge which may legally be treated as interest, shall be in excess of the
highest lawful rate.  If acceleration, prepayment or any other charges upon the
principal or any portion thereof, or any other circumstance, result in the
computation or earning of interest in excess of the highest lawful rate, then
any and all such excess is hereby waived and shall be applied against the
remaining principal balance.  Without limiting the generality of the foregoing,
and notwithstanding anything to the contrary contained herein or otherwise, no
deposit of funds shall be required in connection herewith which will, when
deducted from the principal amount outstanding hereunder, cause the rate of
interest hereunder to exceed the highest lawful rate.

                                       11
<PAGE>

10.  PAYMENTS, ETC.

All payments hereunder and in connection with any reimbursement obligation under
any Letter of Credit Application shall be made in immediately available funds,
and shall be applied first to accrued interest and then to principal; however,
if an Event of Default occurs, Lender may, in its sole discretion, and in such
order as it may choose, apply any payment to interest, principal and/or lawful
charges and expenses then accrued.  Borrower shall receive immediate credit on
payments received during Lender's normal banking hours if made in cash,
immediately available funds, or by debit to available balances in an account at
Lender; otherwise payments shall be credited after clearance through normal
banking channels.  Borrower authorizes Lender to charge any account of Borrower
maintained with Lender for any amounts of principal, interest, taxes, duties, or
other charges or amounts due or payable hereunder, with the amount of such
payment subject to availability of collected balances in Lender's discretion;
unless Borrower instructs otherwise, any Loan shall be credited to an account(s)
of Borrower with Lender.  LENDER AT ITS OPTION MAY MAKE LOANS HEREUNDER OR ISSUE
LETTERS OF CREDIT UPON TELEPHONIC INSTRUCTIONS AND IN SO DOING SHALL BE FULLY
ENTITLED TO RELY SOLELY UPON INSTRUCTIONS, INCLUDING WITHOUT LIMITATION
INSTRUCTIONS TO MAKE TRANSFERS TO THIRD PARTIES, REASONABLY BELIEVED BY LENDER
TO HAVE BEEN GIVEN BY AN AUTHORIZED PERSON, WITHOUT INDEPENDENT INQUIRY OF ANY
TYPE.  All payments shall be made without deduction for or on account of any
present or future taxes, duties or other charges levied or imposed on this Note,
any Letter of Credit Application, the proceeds of any Loan, Lender (other than
based solely on the income of the Lender) or Borrower by any government or
political subdivision thereof.  Borrower shall upon request of Lender pay all
such taxes, duties or other charges in addition to principal and interest,
including without limitation all documentary stamp and intangible taxes, but
excluding income taxes based solely on Lender's income.

11.  SETOFF.

     At any time and without notice of any kind, any account, deposit or other
indebtedness owing by Lender to Borrower, and any securities or other property
of Borrower delivered to or left in the possession of Lender or its nominee or
bailee, may be set off against and applied in payment of any obligation
hereunder or any reimbursement obligation under any Letter of Credit, whether
due or not.

12.  NOTICES.

     All notices, requests and demands to or upon the respective parties hereto
shall be deemed to have been given or made when deposited in the mail, postage
prepaid, addressed if to Lender to its main banking office indicated above
(Attention: Division Head, Commercial Division), and if to Borrower to its
address set forth below, or to such other address as may be hereafter designated
in writing by the respective parties hereto or, as to Borrower, may appear in
Lender's records.

                                       12
<PAGE>

13.  MISCELLANEOUS.

     This Note and any document or instrument executed in connection herewith
shall be governed by and construed in accordance with the internal law of the
State of Illinois, and shall be deemed to have been executed in the State of
Illinois.  Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa.  Captions herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof; references herein to Sections or provisions without reference
to the document in which they are contained are references to this Note.  This
Note shall bind Borrower, its successors and assigns, and shall inure to the
benefit of Lender, its successors and assigns, except that Borrower may not
transfer or assign any of its rights or interest hereunder without the prior
written consent of Lender.  Borrower agrees to pay upon demand all expenses
(including without limitation attorneys' fees, legal costs and expenses, in each
case whether in or out of court, in original or appellate proceedings or in
bankruptcy) incurred or paid by Lender or any holder hereof in connection with
the enforcement or preservation of its rights hereunder or under any document or
instrument executed in connection herewith.  Except as otherwise expressly
provided herein, Borrower expressly and irrevocably waives notice of dishonor or
default as well as presentment, protest, demand and notice of any kind in
connection herewith.  Borrower and, by acceptance of this Note, Lender agree not
to amend this Note without the prior written consent of Guarantor if and only if
such amendment relates to (a) subordinating the Lender's right to payment under
this Note to the payment of any other indebtedness or equity interest of the
Borrower, (b) extending the Maturity Date or any installments hereunder, (c)
changing Section 3.2 hereof, (d) increasing the principal amount of this Note
         ------------
above $16,000,000, (e) impairing the subrogation rights of the Guarantor, or (f)
extending the Final Drawdown Date.

14.  WAIVER OF JURY TRAIL, ETC.

     BORROWER AND LENDER HEREBY IRREVOCABLY AGREE THAT ALL SUITS, ACTIONS OR
OTHER PROCEEDINGS WITH RESPECT TO, ARISING OUT OF OR IN CONNECTION WITH THIS
NOTE, ANY LETTER OF CREDIT APPLICATION OR ANY DOCUMENT OR INSTRUMENT EXECUTED IN
CONNECTION HEREWITH OR THEREWITH SHALL BE SUBJECT TO LITIGATION IN COURTS HAVING
SITUS WITHIN OR JURISDICTION OVER CHICAGO, ILLINOIS.  BORROWER AND LENDER HEREBY
CONSENT AND SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT
LOCATED IN OR HAVING JURISDICTION OVER SUCH CITY, AND HEREBY IRREVOCABLY WAIVE
ANY RIGHT IT MAY HAVE TO REQUEST OR DEMAND TRIAL BY JURY, TO TRANSFER OR CHANGE
THE VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT BY LENDER IN
ACCORDANCE WITH THIS PARAGRAPH, OR TO CLAIM THAT ANY SUCH PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

                                       13
<PAGE>

ONEPOINT COMMUNICATIONS CORP.           Address for Notices:

By: ___________________________         2201 N. Waukegan Road
Type Name _____________________         Suite E-200
                                        Bannockburn, Illinois 60015

                                        Attention: ___________________________

                                       14<PAGE>

                                   GUARANTY
                          Dated as of August 30, 1999

     This Guaranty is made by SBC COMMUNICATIONS INC., a corporation organized
or formed under the laws of State of Delaware (the "Guarantor") in favor of The
                                                    ---------
Northern Trust Company, an Illinois state banking corporation (the "Lender").
                                                                    ------

     For valuable consideration the Guarantor agrees as follows:

SECTION 1.  BASIC TERMS.

        (a)    In consideration of any loan, letter of credit issued for its
     account or other financial accommodation heretofore, now or hereafter at
     any time made or given, to OnePoint Communications Corp., a corporation
     organized or formed under the laws of State of Delaware (the "Borrower"),
                                                                   --------
     by the Lender, the Guarantor hereby guarantees absolutely and
     unconditionally the prompt payment when due, whether at maturity, by
     declaration, by demand or otherwise, at any and all times thereafter, and
     as otherwise set forth herein, of all indebtedness, reimbursement
     obligation and other liabilities and obligations of the Borrower to the
     Lender, direct or indirect, absolute or contingent, due or to become due,
     now or hereafter existing under (i) that certain Call On Term - Term Note
     dated as of August 30, 1999 (the "Note"), of the Borrower payable to the
                                       ----
     order of the Lender in the original principal amount of $16,000,000 (as
     amended, renewed or replaced in accordance herewith) and (ii) any Letter of
     Credit Application (as defined in the Note) in accordance herewith, subject
     to Section 1(c) (all such indebtedness and liabilities, reimbursement
        ------------
     obligations and obligations being hereinafter collectively called the
     "Indebtedness").
      ------------

        (b)    In addition, the Guarantor agrees to pay or reimburse the Lender
     for all costs and expenses of enforcing and preserving its rights under
     this Guaranty and the Indebtedness (including reasonable legal fees and
     reasonable time charges of attorneys, whether in or out of court, in
     original or appellate proceedings or in bankruptcy).

        (c)    The amount of this Guaranty is expressly limited to an aggregate
     amount not exceeding $16,000,000, including interest thereon and costs and
     expenses as provided herein and Guarantor shall have no liability hereunder
     for the Indebtedness or other liability hereunder in excess of the
     aggregate amount of $16,000,000.

        (d)    The Guaranty shall remain in full force and effect until the
     earlier of (i) the 366th day following the date the Indebtedness and all
     amounts payable hereunder have been fully paid, and that all commitments
     and obligations of the Lender with respect to the Indebtedness, and any
     obligation of the Lender to extend credit to the Borrower, have terminated
     and (ii) January 4, 2005.
<PAGE>

SECTION 2.  EVENTS REQUIRING PAYMENT.  Each of the following shall be an "Event
                                                                          -----
Requiring Payment":
-----------------

        (a) Nonpayment.  Borrower's failure to pay, when and as due or demanded,
            ---------
     any of the Indebtedness, or Guarantor's failure to comply with or perform
     any agreement or covenant contained herein;

        (b) Warranties.  Any representation, warranty, schedule, certificate,
            ----------
     financial statement, report, notice, or other writing furnished by or on
     behalf of the Guarantor to the Lender is false or misleading in any
     material respect on the date as of which the facts therein set forth are
     stated or certified;

        (c) Lack of Enforceability.  This Guaranty shall be repudiated or become
            ----------------------
     unenforceable or incapable of performance;

        (d) Dissolution.  The Guarantor shall dissolve, liquidate, merge,
            -----------
     consolidate, or cease to be in existence for any reason;

        (e) Credit Rating.  The Guarantor's senior unsecured debt rating shall
            -------------
     be less than BBB by Standard & Poor's, a division of McGraw Hill Company,
     Inc. or Baa by Moody's Investors Services, Inc.;

        (f) Bankruptcy.  Any bankruptcy, insolvency, reorganization,
            ----------
     arrangement, readjustment, liquidation, dissolution, or similar proceeding,
     domestic or foreign, is instituted by or against the Guarantor or the
     Borrower, and any involuntary proceedings is not dismissed within 60 days;
     or the Guarantor or Borrower shall take any steps toward, or to authorize
     such a proceeding; or

        (g) Insolvency.  The Guarantor or the Borrower shall become insolvent,
            ----------
     generally shall fail or be unable to pay its debts as they mature, shall
     admit in writing its inability to pay its debts as they mature, shall make
     a general assignment for the benefit of its creditors, shall enter into any
     composition or similar agreement, or shall suspend the transaction of all
     or a substantial portion of its usual business.

SECTION 3.  PAYMENT REQUIREMENT.  Upon the occurrence of any Event Requiring
Payment, the Guarantor agrees to pay the Lender, immediately upon the Lender's
demand therefor, the full amount which would be payable hereunder by the
Guarantor if all Indebtedness were then due and payable.  Further, upon the
occurrence of an Event Requiring Payment specified in Section 2(f)-(g), the full
                                                      ----------------
amount which would be payable hereunder if all Indebtedness were then due and
payable shall be immediately and automatically due and payable without action of
any kind on the part of the Lender.

SECTION 4.  REINSTATEMENT.  This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment of the Indebtedness, or
any part thereof, is rescinded or must otherwise be returned by the Lender upon
the insolvency, bankruptcy or

                                       2
<PAGE>

reorganization of the Borrower or otherwise, all as though such payment to the
Lender had not been made.

SECTION 5.  OBLIGATIONS UNCONDITIONAL; WAIVER OF DEFENSES.  No fact or
circumstance whatsoever which might at law or equity constitute a discharge or
release of, or defense to the obligations of, a guarantor or surety shall limit
or affect any obligations of the Guarantor under this Guaranty.  Without
limiting the generality of the foregoing:

        (a) The Lender may at any time and from time to time, without notice to
     the Guarantor, take any or all of the following actions without affecting
     or impairing the liability of the Guarantor on this Guaranty:

            (i)   renew or extend time of payment of the Indebtedness;

            (ii)  accept, substitute, release or surrender any security for the
            Indebtedness;

            (iii) accept other guarantors; and

            (iv)  release any person primarily or secondarily liable on the
            Indebtedness (including without limitation the Borrower, any
            indorser, and any other guarantor).

        (b) No delay in enforcing payment of the Indebtedness, nor any
     amendment, waiver, change, or modification of any terms of any instrument
     which evidences or is given in connection with the Indebtedness, shall
     release the Guarantor from any obligation hereunder.  The obligations of
     the Guarantor under this Guaranty are and shall be primary, continuing,
     unconditional and absolute, irrespective of the value, genuineness,
     regularity, validity or enforceability of any documents or instruments
     respecting or evidencing the Indebtedness.  In order to hold the Guarantor
     liable hereunder, there shall be no obligation on the part of the Lender,
     at any time, to resort for payment to the Borrower or any other guaranty or
     to any security for the Indebtedness or this Guaranty.  The Lender shall
     have the right to enforce this Guaranty irrespective of whether or not
     other proceedings or steps are being taken against any property securing
     the Indebtedness or any other party primarily or secondarily liable on any
     of the Indebtedness.

        (c) The Guarantor waives presentment, protest, demand, notice of
     dishonor or default, notice of acceptance of this Guaranty, notice of any
     loans made, extensions granted or other action taken in reliance hereon,
     and all demands and notices of any kind in connection with this Guaranty or
     the Indebtedness.

        (d) Notwithstanding anything to the contrary herein, Lender agrees not
     to amend the Indebtedness without the prior written consent of Guarantor if
     and only if such amendment relates to:  (i) subordinating the Lender's
     right to payment of the Indebtedness to the payment of any other
     indebtedness or equity interest of the Borrower,

                                       3
<PAGE>

     (ii) extending the scheduled maturity date of the Note or any installments
     thereunder, (iii) changing the mandatory prepayment provision contained in
     Section 3.2 of the Note, (iv) increasing the principal amount of the
     -----------
     Indebtedness above $16,000,000, (v) impairing the subrogation rights of the
     Guarantor or (vi) extending the Final Drawdown Date (as defined in the
     Note).

SECTION 6.  DEBT SUBORDINATION.  The Guarantor hereby subordinates to the
Indebtedness any claim or right to receive payment of any or all indebtedness of
the Borrower to the Guarantor whether now existing or hereafter created or
arising, direct or indirect, absolute or contingent, due or to become due, now
or hereafter existing (all such, the "Subordinated Indebtedness"), and agrees
                                      -------------------------
that the Lender's claim and right to receive payment in full of the Indebtedness
shall be prior and superior.  The Guarantor agrees not to accept payment of the
Subordinated Indebtedness, including interest thereon, or any part thereof, or
to enforce any security interest or accept proceeds of any security therefor,
from the Borrower as long as any Event Requiring Payment has occurred or is
continuing.

SECTION 7.  SUBROGATION.  Until the Indebtedness and any other amounts payable
hereunder are paid in full, Guarantor shall not pursue any claim or exercise any
right that Guarantor might now have or hereafter acquire against Borrower or any
other person primarily or contingently liable on the Indebtedness (including
without limitation any maker, indorser or guarantor) or that arises from the
existence or performance of Guarantor's obligations under this Guaranty,
including without limitation any right of subrogation, reimbursement,
exoneration, contribution or indemnification, or any right of participation in
any claim or remedy of the Lender against Borrower or any security for the
Indebtedness which the Lender now has or hereafter acquires, however arising.

SECTION 8.  APPLICATION OF FUNDS.  Any and all payments upon the Indebtedness
made by the Borrower, by the Guarantor, or by any other person, and the proceeds
of any and all security for any of the Indebtedness may be applied by the Lender
upon such of the items of the Indebtedness as it may determine.

SECTION 9.  PARTICIPATIONS.  The Lender may, without notice of any kind, sell,
assign, transfer or grant participations in all or any of the Indebtedness.  In
such event each and every immediate and successive assignee, transferee or
holder of or participant in all or any of the Indebtedness shall have the right
to enforce this Guaranty, by suit or otherwise, for the benefit of such
assignee, transferee, holder or participant as fully as if such assignee,
transferee, holder or participant were herein by name specifically given such
rights, powers and benefits, but the Lender shall have an unimpaired right,
prior and superior to that of any assignee, transferee or holder to enforce this
Guaranty for the benefit of the Lender or any such participant, as to so much of
the Indebtedness as it has not sold, assigned or transferred.

SECTION 10. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Lender that:

        (a)  The Guarantor is a corporation duly existing and in good standing
     under the laws of the state indicated in the heading; the Guarantor is duly
     qualified, in good

                                       4
<PAGE>

     standing and authorized to do business in each jurisdiction where, because
     of the nature of its activities or properties, such qualification is
     required, except where failure to be so qualified would not have a material
     adverse affect on the ability of the Guarantor to perform its obligations
     hereunder. The Guarantor has the corporate power and authority to own its
     properties and to carry on its businesses as now being conducted.

        (b) The execution and delivery by the Guarantor of this Guaranty and any
     document or instrument executed in connection herewith, and the performance
     of the Guarantor's obligations hereunder and thereunder:

            (i)   are within the Guarantor's corporate powers;

            (ii)  have been authorized by all necessary action;

            (iii) have received all necessary governmental approval (if any
            shall be required);

            (iv)  do not and will not contravene or conflict with (A) any
            provision of law or of the charter, by-laws of the Guarantor or (B)
            of any agreement binding upon the Guarantor which contravention or
            conflict would not have a material adverse effect on the ability of
            the Guarantor to perform its obligations hereunder; and

            (v)   are within the direct corporate interest and purposes of the
            Guarantor.

     This Guaranty constitutes an obligation of the Guarantor enforceable
     against the Guarantor in accord with the terms hereof.

        (c) The Guarantor's audited consolidated financial statements as at
     December 31, 1998 have been prepared in conformity with generally accepted
     accounting principles applied on a basis consistent with that of the
     preceding fiscal year, and accurately present the financial condition of
     the Guarantor and any consolidated subsidiary as at such dates and the
     results of their operations for the respective periods then ended.  Since
     the date of those financial statements, no material, adverse changes in the
     business, properties, assets, operations, conditions or prospects of the
     Guarantor has occurred of which the Lender has not been advised in writing
     before this Guaranty was signed.

        (d) The Guarantor has filed or caused to be filed all federal, state and
     local tax returns (including information returns) which, to the knowledge
     of the Guarantor are required to be filed, and has paid or has caused to be
     paid all taxes as shown on such returns or on any assessment received by
     it, to the extent that such taxes have become due (except for current taxes
     not delinquent and taxes being contested in good faith and by appropriate
     proceedings for which adequate reserves have been provided on the books of
     the Guarantor, and as to which no foreclosure, distraint, sale or similar
     proceedings have

                                       5
<PAGE>

     been commenced). The Guarantor has set up reserves in accordance with
     generally accepted accounting principles for the payment of additional
     taxes for years which have not been audited by the respective tax
     authorities.

        (e)    No litigation (including derivative actions), arbitration
     proceedings or governmental proceedings are pending or, to its knowledge,
     threatened against the Guarantor which would (singly or in the aggregate),
     if adversely determined, have a material and adverse effect on the
     financial condition, continued operations or prospects of the Guarantor.

SECTION 11.  COVENANTS.  So long as this Guaranty remains in effect, the
Guarantor agrees that it shall, and shall cause any subsidiary to comply with
the following covenants, unless the Lender consents otherwise in writing:

        (a)    The Guarantor shall furnish to the Lender:

               (i)  Within 45 days after the end of each quarter of each fiscal
               year of the Guarantor, a copy of an unaudited financial statement
               of the Guarantor and any subsidiary prepared on a consolidating
               and consolidated basis consistent with the audited consolidated
               financial statements of the Guarantor and any subsidiary referred
               to in Section 10(c), signed by an authorized officer of the
                     -------------
               Guarantor and consisting of at least: (A) a balance sheet as at
               the close of such quarter; and (B) a statement of earnings and
               source and application of funds for such quarter and for the
               period from the beginning of such fiscal year to the close of
               such quarter; provided that, so long as the common stock of the
               Guarantor is listed for trading on New York Stock Exchange
               ("NYSE"), the foregoing requirement as to the quarterly financial
                 ----
               statements of the Guarantor may be satisfied by delivery to
               Lender of the Guarantor's Quarterly Report on Form 10-Q as filed
               with the Securities Exchange Commission ("SEC") within 60 days
                                                         ---
               after the end of each quarter of each fiscal year of the
               Guarantor;

               (ii) Within 90 days after the end of each fiscal year of the
               Guarantor, a copy of an annual audit report of the Guarantor and
               any subsidiary prepared on a consolidated basis and in conformity
               with generally accepted accounting principles applied on a basis
               consistent with the audited consolidated financial statements of
               the Guarantor and any subsidiary referred to above, duly
               certified by independent certified public accountants of
               recognized standing satisfactory to the Lender, accompanied by an
               opinion without significant qualification; provided that, so long
               as the common stock of the Guarantor is listed for trading on
               NYSE, the foregoing requirement as to Guarantor's annual audit
               reports may be satisfied by the delivery to Lender within 105
               days after the end of each fiscal year of the Guarantor of
               Guarantor's Annual Report to

                                       6
<PAGE>

               Stockholders and the Annual Report on Form 10-K filed with the
               SEC; and

               (iii) Immediately upon learning of the occurrence of an Event
               Requiring Payment or an Unmatured Event Requiring Payment with
               respect to the Guarantor only, written notice describing the same
               and the steps being taken by the Guarantor in respect thereof.

SECTION 12.  As used herein the term "Unmatured Event Requiring Payment" means
                                      ---------------------------------
an event or condition which would become an Event Requiring Payment with notice
or the passage of time or both.

SECTION 13.  MISCELLANEOUS.

        (a)    The Lender may, by written notice to the Guarantor, at any time
     and from time to time, waive any Event Requiring Payment or Unmatured Event
     Requiring Payment, which shall be for such period and subject to such
     conditions as shall be specified in any such notice. In the case of any
     such waiver, the Lender and the Guarantor shall be restored to their former
     position and rights hereunder, and any Event Requiring Payment or Unmatured
     Event Requiring Payment so waived shall be deemed to be cured and not
     continuing; but no such waiver shall extend to or impair any right
     consequent thereon or to any subsequent or other Event Requiring Payment or
     Unmatured Event Requiring Payment.

        (b)    All notices, requests and demands to or upon the respective
     parties hereto shall be deemed to have been given or made three (3)
     business days after being deposited in the mail, postage prepaid,
     addressed:

               (i)   if to the Lender to 265 East Deerpath, Lake Forest,
               Illinois 60045 (Attention: Division Head Commercial Division)

               (ii)  if to the Guarantor to SBC Communications, Inc., 7th Floor,
               175 E. Houston, San Antonio, Texas 78205 (Attention: Treasurer)

     or to such other address as may be hereafter designated in writing by the
     respective parties hereto.

        (c)    No failure to exercise, and no delay in exercising, on the part
     of the Lender of any right, power or privilege hereunder shall preclude any
     other or further exercise thereof or the exercise of any other right, power
     or privilege. The rights and remedies of the Lender herein provided are
     cumulative and not exclusive of any rights or remedies provided by law.

        (d)    This Guaranty shall, upon execution and delivery by the Guarantor
     and acceptance by the Lender in Chicago, Illinois, become effective and
     shall be binding upon and inure to the benefit of the Guarantor, the Lender
     and their respective successors

                                       7
<PAGE>

     and assigns, except that the Guarantor may not transfer or assign any of
     its rights or interests hereunder without the prior written consent of the
     Lender.

        (e) Captions in this Guaranty are for convenience of reference only and
     shall not define or limit any of the terms or provisions hereof.
     References herein to Sections or provisions without reference to the
     document in which they are contained are references to this Guaranty.

        (f) Unless the context requires otherwise, wherever used herein the
     singular shall include the plural and vice versa, and the use of one gender
     shall also denote the other where appropriate.

        (g) This Guaranty may be executed on any number of separate
     counterparts; each counterpart shall be deemed an original instrument; and
     all of the counterparts taken together shall be deemed to constitute one
     and the same instrument.

        (h) This Guaranty, and any document or instrument executed in connection
     herewith shall be governed by, and construed and interpreted in accordance
     with, the internal laws of the State of Illinois, and shall be deemed to
     have been executed in the State of Illinois.

        (i) The Guarantor, and the Lender by its acceptance hereof, irrevocably
     agree that all suits, actions or other proceedings in any way, manner or
     respect, arising out of or from or related to this Guaranty, shall be
     subject to litigation in courts having situs within Chicago, Illinois.  The
     Guarantor, and the Lender by its acceptance hereof, hereby consent and
     submit to the jurisdiction of any local, state or federal court located
     within said city and state.  The Guarantor, and the Lender by its
     acceptance hereof, hereby waive any right it may have to request or demand
     trial by jury, to transfer or change the venue of any suit, action or other
     proceeding brought against either party in accordance with this Section, or
     to claim that any such proceeding has been brought in an inconvenient
     forum.

                                   SBC COMMUNICATIONS INC.

                                   By:______________________________

                                   Its:_____________________________

                                       8

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