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Exhibit 1
PNC Funding Corp, Issuer
and
PNC Bank Corp., Guarantor
Underwriting Agreement
New York, New York
February 16, 1999
To the Representatives
named in Schedule I
hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
PNC Funding Corp, a Pennsylvania corporation (the "Company"), proposes
to sell to the underwriters named in Schedule II hereto (the "Underwriters"),
for whom you are acting as representatives (the "Representatives"), the
principal amount of its securities identified in Schedule I hereto (together
with the guarantees mentioned below, the "Securities") to be guaranteed by PNC
Bank Corp., a Pennsylvania Corporation (the "Guarantor"), and to be issued under
an indenture dated as of December 1, 1991, among the Company, the Guarantor and
The Chase Manhattan Bank (formerly known as Chemical Bank, successor by merger
to Manufacturers Hanover Trust Company), as trustee (the "Trustee"), as amended
by a Supplemental Indenture dated as of February 15, 1993, among the Company,
the Guarantor and the Trustee (as amended, the "Indenture"). If the firm or
firms listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and "Representatives," as used
herein, shall each be deemed to refer to such firm or firms.
1. Representations and Warranties. The Company and the Guarantor
represent and warrant to, and agree with, each Underwriter as set forth below in
this Section 1. Certain terms used in this Section 1 are defined in paragraph
(c) hereof.
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable and, if
the offering of the Securities is a Non-Delayed Offering (as so specified),
paragraph (ii) below is applicable.
(i) The Company and the Guarantor meet the requirements for the
use of Form S-3 under the Securities Act of 1933 (the "Act") and
have filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the file number of which is
set forth in Schedule I
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hereto), on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the
Securities. The Company and the Guarantor may have filed one or
more amendments thereto, and may have used a Preliminary Final
Prospectus, each of which has previously been furnished to you.
Such registration statement, as so amended, has become effective.
The offering of the Securities is a Delayed Offering and,
accordingly, it is not necessary that any further information with
respect to the Securities and the offering thereof required by the
Act and the rules thereunder to be included in the Final Prospectus
have been included in an amendment to such registration statement
prior to the Effective Date. The Company and the Guarantor will
next file with the Commission pursuant to Rules 415 and 424(b)(2)
or (5) a final supplement to the form of prospectus included in
such registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus supplement shall
include all required information with respect to the Securities and
the offering thereof and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and
any Preliminary Final Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein.
(ii) The Company and the Guarantor meet the requirements for
the use of Form S-3 under the Act and have filed with the
Commission a registration statement (the file number of which is
set forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering and sale
of the Securities. The Company and the Guarantor may have filed one
or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to you. The
Company and the Guarantor will next file with the Commission either
(x) a final prospectus supplement relating to the Securities in
accordance with Rules 430A and 424(b)(1) or (4), or (y) prior to
the effectiveness of such registration statement, an amendment to
such registration statement, including the form of final prospectus
supplement. In the case of clause (x), the Company and the
Guarantor included in such registration statement, as amended at
the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in the Final Prospectus with respect to the Securities and
the offering thereof. As filed, such final prospectus supplement or
such amendment and form of final prospectus supplement shall
contain all Rule 430A Information, together with all other such
required information, with respect to the Securities and the
offering thereof and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to
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you prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act and the Securities Exchange Act of 1934
(the "Exchange Act") and the respective rules thereunder; on the Effective
Date, the Registration Statement did not or will not 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; and, on the Effective Date, the Final Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company and the Guarantor make no representations or warranties as to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company or the Guarantor by or on behalf of any
Underwriter through the Representatives specifically for use in connection
with the preparation of the Registration Statement or the Final Prospectus
(or any supplement thereto).
(c) The terms that follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post effective amendment or
amendments thereto became or become effective. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the
parties hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean any
preliminary prospectus supplement to the Basic Prospectus which describes
the Securities and the offering thereof and is used prior to filing of the
Final Prospectus. "Final Prospectus" shall mean the prospectus supplement
relating to the Securities that is first filed pursuant to Rule 424(b)
after the Execution Time, together with the Basic Prospectus or, if, in the
case of a Non-Delayed Offering, no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the
Securities, including the Basic Prospectus,
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included in the Registration Statement at the Effective Date. "Registration
Statement" shall mean the registration statement referred to in paragraph
(a) above, including incorporated documents, exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule
430A. "Rule 415," "Rule 424," "Rule 430A" and "Regulation S-K" refer to
such rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Securities and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be;
and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or the issue date of
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Non-Delayed Offering" shall mean an offering of securities
which is intended to commence promptly after the effective date of a
registration statement, with the result that, pursuant to Rules 415 and
430A, all information (other than Rule 430A Information) with respect to
the securities so offered must be included in such registration statement
at the effective date thereof. A "Delayed Offering" shall mean an offering
of securities pursuant to Rule 415 which does not commence promptly after
the effective date of a registration statement, with the result that only
information required pursuant to Rule 415 need be included in such
registration statement at the effective date thereof with respect to the
securities so offered. Whether the offering of the Securities is a
Non-Delayed Offering or a Delayed Offering shall be set forth in Schedule I
hereto.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to, and the Guarantor agrees to cause the Company to, sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at the purchase price set forth in Schedule I hereto the
number of shares of the Securities set forth opposite such Underwriter's name in
Schedule II hereto, except that, if Schedule I hereto provides for the sale of
Securities pursuant to delayed delivery arrangements, the respective principal
amounts of Securities to be purchased by the Underwriters shall be as
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set forth in Schedule II hereto less the respective amounts of Contract
Securities determined as provided below. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters' Securities" and
Securities to be purchased pursuant to Delayed Delivery Contracts as hereinafter
provided are herein called "Contract Securities."
If so provided in Schedule I hereto, the Underwriters are authorized
to solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto but with such changes therein as the Company and the
Guarantor may authorize or approve. The Underwriters will endeavor to make such
arrangements and, as compensation therefor, the Company will pay, and the
Guarantor will cause the Company to pay, to the Representatives, for the account
of the Underwriters, on the Closing Date, the percentage set forth in Schedule I
hereto of the principal amount of the Securities for which Delayed Delivery
Contracts are made. Delayed Delivery Contracts are to be with institutional
investors, including commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions. The
Company will enter into, and the Guarantor will cause the Company to enter into,
Delayed Delivery Contracts in all cases where sales of Contract Securities
arranged by the Underwriters have been approved by the Company but, except as
the Company may otherwise agree, each such Delayed Delivery Contract must be for
not less than the minimum principal amount set forth in Schedule I hereto and
the aggregate principal amount of Contract Securities may not exceed the maximum
aggregate principal amount set forth in Schedule I hereto. The Underwriters will
not have any responsibility in respect of the validity or performance of Delayed
Delivery Contracts. The principal amount of Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by an amount
which shall bear the same proportion to the total principal amount of Contract
Securities as the principal amount of Securities set forth opposite the name of
such Underwriter bears to the aggregate principal amount set forth in Schedule
II hereto, except to the extent that you determine that such reduction shall be
otherwise than in such proportion and so advise the Company in writing;
provided, however, that the total principal amount of Securities to be purchased
by all Underwriters shall be the aggregate principal amount set forth in
Schedule II hereto less the aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the Underwriters'
Securities shall be made on the date and at the time specified in Schedule I
hereto (or such later date not later than five business days after such
specified date as the Representatives shall designate), which date and time may
be postponed by agreement among the Representatives, the Company and the
Guarantor or as provided in Section 8 hereof (such date and time of delivery and
payment for the Underwriters' Securities being herein called the "Closing
Date"). Delivery of the Underwriters' Securities shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer of
immediately available funds. Delivery of the Underwriters' Securities shall be
made at such location in The City
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of New York as the Representatives shall reasonably designate at least one
business day in advance of the Closing Date and payment for the Securities shall
be made at the office specified in Schedule I hereto. Certificates for the
Underwriters' Securities shall be registered in such names (including the
nominee for any depositary which will hold Securities to be established for
"book entry" issuance and transfer) and in such denominations as the
Representatives may request not less than two full business days in advance of
the Closing Date.
The Company and the Guarantor agree to have the Underwriters'
Securities available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 1:00 p.m. on the business
day prior to the Closing Date.
4. Agreements. The Company and the Guarantor jointly and severally
agree with the several Underwriters that:
(a) The Company and the Guarantor will use their best efforts to
cause the Registration Statement, if not effective at the Execution Time,
and any amendment thereto, to become effective. Prior to the termination of
the offering of the Securities, the Company and the Guarantor will not file
any amendment to the Registration Statement or supplement (including the
Final Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus unless the Company and the Guarantor have furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, the Company and the Guarantor will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company and the Guarantor will
promptly advise the Representatives (i) when the Registration Statement, if
not effective at the Execution Time, and any amendment thereto, shall have
become effective, (ii) when the Final Prospectus, and any supplement
thereto, shall have been filed with the Commission pursuant to Rule 424(b),
(iii) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Final Prospectus or for any
additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of
the receipt by the Company or the Guarantor of any notification with
respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company and the Guarantor 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.
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(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company and the Guarantor promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section
4, an amendment or supplement which will correct such statement or omission
or effect such compliance.
(c) As soon as practicable, the Guarantor will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Guarantor and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company and the Guarantor will furnish to the
Representatives and counsel for the Underwriters, without charge, copies of
the Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of any Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may reasonably
request. The Company and the Guarantor will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company and the Guarantor will use their best efforts to
arrange for the qualification of the Securities for sale under the laws of
such jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of the
Securities and will arrange for the determination of the legality of the
Securities for purchase by institutional investors; provided, however, that
neither the Company nor the Guarantor shall be required to qualify to do
business in any jurisdiction where it is not now qualified or to take any
action which would subject it to general or unlimited service of process in
any jurisdiction where they are not now subject.
(f) Until the business day following the Closing Date, the Company
and the Guarantor will not, without the consent of the Representatives,
offer, sell or contract to sell, or announce the offering of, any debt
securities covered by the Registration Statement or any other registration
statement filed under the Act.
5. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwriters' Securities shall be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Company and the Guarantor contained herein as of the Execution
Time and the Closing
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Date, to the accuracy in all material respects of the statements of the Company
and the Guarantor made in any certificates pursuant to the provisions hereof, to
the performance in all material respects by the Company and the Guarantor of
their obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 p.m. New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 p.m. New York City time on such
date; if filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, shall have been filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Company and the Guarantor shall have furnished to the
Representatives the opinion of Kathleen Clover, Esq., Senior Counsel of the
Guarantor, dated the Closing Date, to the effect that:
(i) Each of the Company and the Guarantor is a corporation
validly organized and presently subsisting under the laws of the
Commonwealth of Pennsylvania with all requisite corporate power and
authority to own its properties and conduct its business as
described in the Final Prospectus, except for such power and
authority the absence of which would not have a material adverse
effect on the Guarantor or the Company, as the case may be; and the
Guarantor is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended;
(ii) PNC Bank, National Association ("PNC Bank, N.A.") is a
national banking organization validly existing in good standing
under the laws of the United States, with all requisite corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Final Prospectus, except
for such power and authority the absence of which would not have a
material adverse effect on PNC Bank, N.A.;
(iii) all the outstanding shares of capital stock of PNC Bank,
N.A. have been duly and validly authorized and issued and (except
as provided in 12 U.S.C. Section 55) are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Prospectus, all outstanding shares of capital stock of PNC Bank,
N.A. are owned by the Guarantor either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, any other security
interests, claims, liens or encumbrances;
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(iv) the Guarantor's authorized equity capitalization, if set
forth in the Final Prospectus, is as set forth in the Final
Prospectus; the Securities conform in all material respects to the
description thereof contained in the Final Prospectus; and, if the
Securities are to be listed on any stock exchange, authorization
therefor has been given, subject to official notice of issuance and
evidence of satisfactory distribution, or the Company and the
Guarantor have filed a preliminary listing application and all
required supporting documents with respect to the Securities with
such stock exchange and nothing has caused such counsel to believe
that the Securities will not be authorized for listing, subject to
official notice of issuance and evidence of satisfactory
distribution;
(v) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act,
and constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
receivership, readjustment of debt, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally or general equitable
principles (whether considered in a proceeding in equity or at
law); and the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, in the case of the Underwriters'
Securities, or by the purchasers thereof pursuant to Delayed
Delivery Contracts, in the case of any Contract Securities, will
constitute legal, valid and binding obligations of the Company and
the Guarantor entitled to the benefits of the Indenture;
(vi) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving
the Guarantor or any of its subsidiaries, of a character required
to be disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or to
be filed as an exhibit, which is not described or filed as
required; and the statements included or incorporated in the Final
Prospectus describing any legal proceedings or material contracts
or agreements relating to the Guarantor or any of its subsidiaries
fairly summarize such matters in all material respects;
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(vii) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened,
and the Registration Statement and the Final Prospectus (other than
the financial statements and other financial and statistical
information contained or incorporated therein, and that part of the
Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the
Trust Indenture Act, as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of that Act and the Exchange Act and the
respective rules thereunder; and nothing has come to the attention
of such counsel that has caused such counsel to believe that at the
Effective Date the Registration Statement 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 Final Prospectus includes any
untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading except
that such counsel does not express any opinion or belief as to the
financial statements or schedules or other data of a statistical or
financial nature included or incorporated therein or as to that
part of the Registration Statement which constitutes the Statement
of Eligibility and Qualification (Form T-1) of the Trustee under
the Trust Indenture Act;
(viii) this Agreement and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company and the
Guarantor;
(ix) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of
the transactions contemplated herein or in any Delayed Delivery
Contracts, except such as have been obtained under the Act and such
as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by
the Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(x) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof or of any Delayed Delivery
Contracts will (A) violate the charter or by-laws of the Company or
the Guarantor, or (B) violate, result in a breach of, or constitute
a default under the terms of any material indenture or other
material agreement or instrument known to such counsel and to which
the Company, the Guarantor or PNC Bank, N.A. is a
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party or bound, or (C) violate any material order or regulation
known to such counsel to be applicable to the Company, the
Guarantor or PNC Bank, N.A. of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company, or the Guarantor or PNC Bank,
N.A.; and
(xi) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel will opine only as to matters
involving the application of the laws of the Commonwealth of Pennsylvania
or the United States and may rely (A) as to matters involving the
application of laws of any jurisdiction other than the Commonwealth of
Pennsylvania 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 reasonably satisfactory to
counsel for the Underwriters, except that it will not be required that such
counsel obtain an opinion of New York counsel as to matters of New York law
in order to render such opinion or that such counsel express an opinion as
to matters arising under the laws of any jurisdiction other than the laws
of the Commonwealth of Pennsylvania and matters of federal law arising
under the laws of the United States of America, and (B) as to matters of
fact, to the extent deemed proper, on certificates of responsible officers
of the Company or the Guarantor and public officials. References to the
Final Prospectus in this paragraph (b) include any supplements thereto at
the Closing Date.
(c) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, any
Delayed Delivery Contracts, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(d) The Guarantor shall have furnished to the Representatives a
certificate of the Guarantor, signed by the Chairman of the Board, the
President, a Vice Chairman of the Board or any Executive or Senior Vice
President and the principal financial or accounting officer of the
Guarantor, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplement to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company and the
Guarantor in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if
made on the Closing
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Date and the Company and the Guarantor have complied in all
material respects with all the agreements and satisfied in all
material respects all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Guarantor's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the
condition (financial or other), earnings, business or properties of
the Guarantor and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(e) At the Closing Date, Ernst & Young shall have furnished to the
Representatives a letter or letters (which may refer to letters previously
delivered to one or more of the Representatives), dated as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited consolidated financial
statements and financial statement schedules included or
incorporated in the Registration Statement and the Final Prospectus
and reported on by them comply in form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
consolidated financial statements made available by the Guarantor
and its subsidiaries; carrying out certain specified procedures
(but not an audit in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter;
a reading of the minutes of the meetings of the shareholders and
directors of the Guarantor and the audit and executive committees
thereof and inquiries of certain officials of the Guarantor who
have responsibility for financial and accounting matters of the
Guarantor and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited consolidated
financial statements in or incorporated in the Final Prospectus,
nothing came to their attention which caused them to believe that:
(1) any unaudited consolidated financial statements included or
incorporated in the Registration Statement and the Final Prospectus
do not comply in form in
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all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with
respect to the financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; and said
unaudited consolidated financial statements are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements included or incorporated in the Registration
Statement and the Final Prospectus; or (2) with respect to the
period subsequent to the date of the most recent audited
consolidated financial statements incorporated in the Registration
Statement and the Final Prospectus, there were, at a specified date
not more than five business days prior to the date of the letter,
any increases in borrowed funds of the Guarantor and its
subsidiaries or any decreases in the capital stock (defined as each
of the individual dollar amounts of preferred stock, common stock,
and capital surplus) of the Guarantor or the stockholders' equity
of the Guarantor as compared with the amounts shown on the most
recent consolidated balance sheet incorporated in the Registration
Statement and the Final Prospectus, or for the period from the date
of the most recent audited or unaudited consolidated financial
statements incorporated in the Registration Statement and the Final
Prospectus to such specified date there were any decreases, as
compared with the corresponding period in the preceding year, in
total or per share amounts of consolidated net income of the
Guarantor or consolidated net interest income except in all
instances for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the
Guarantor as to the significance thereof unless said explanation is
not deemed necessary by the Representative; and
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Guarantor and its subsidiaries)
set forth in the Registration Statement and the Final Prospectus,
including the information included or incorporated in Items 1, 5, 6
and 7 of the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year incorporated in the Registration Statement and
the Final Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated in the Guarantor's
Quarterly Reports on Form 10-Q, incorporated in the Registration
Statement and Final Prospectus, agrees with the accounting records
of the Guarantor and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
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If provided for in Schedule I hereto, at the Execution Time,
Ernst & Young shall have furnished to the Representatives a letter
or letters, dated as of the Execution Time, in form and substance
satisfactory to the Representatives, to the effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of
any amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of this
Section 5 or (ii) any change, or any development involving a prospective
change, in or affecting the business or properties of the Guarantor and its
subsidiaries the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the ratings of any of the Guarantor's debt securities by
Moody's Investors Service, Inc., or Standard & Poor's Corporation, or any
public announcement that any such organization has under surveillance or
review their ratings of any of the Guarantor's debt securities (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating), and if, in any such
case, the effect thereof in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the purchase of the
Securities.
(h) Prior to the Closing Date, the Company and the Guarantor shall
have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request in
connection with the offering of the Securities.
(i) The Company and the Guarantor shall have accepted Delayed
Delivery Contracts in any case where sales of Contract Securities arranged
by the Underwriters have been approved by the Company.
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 Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
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6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company or the Guarantor to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company and the Guarantor
will reimburse the Underwriters severally upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities. In no event shall the Company or the Guarantor be
liable to the Underwriters for loss of anticipated profits from the transactions
contemplated by this Agreement.
7. Indemnification and Contribution. (a) The Company and the Guarantor
agree to indemnify and hold harmless each Underwriter and each person who
controls any Underwriter within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company and the Guarantor
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company and the Guarantor by or on behalf of any Underwriter through the
Representatives specifically for use in connection with the preparation thereof,
or that part of the Registration Statement constituting the "Statement of
Eligibility and Qualification" (Form T-1) of the Trustee under the Trust
Indenture Act, and (ii) such indemnity with respect to the Basic Prospectus or
any Preliminary Final Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased the Securities
which are the subject thereof if such person did not receive a copy of the Final
Prospectus (or the Final Prospectus as supplemented) excluding documents
incorporated therein by reference at or prior to the confirmation of the sale of
such Securities, if any, to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in the Basic Prospectus or any Preliminary Final Prospectus was
corrected in the Final Prospectus (or the Final Prospectus as supplemented).
This indemnity agreement will be in addition to any liability which the Company
and the Guarantor may otherwise have.
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(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company and the Guarantor, each of their respective directors,
each of their respective officers who signs the Registration Statement, and
each person who controls the Company or the Guarantor within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company and the Guarantor to each Underwriter, but only
with reference to written information relating to such Underwriter
furnished to the Company and the Guarantor by or on behalf of such
Underwriter through the Representatives specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company and the Guarantor acknowledge
that the statements set forth in the last paragraph of the cover page, and
under the heading "Underwriting" or "Plan of Distribution" and, if Schedule
I hereto provides for sales of Securities pursuant to delayed delivery
arrangements, in the last sentence under the heading "Delayed Delivery
Arrangements" in any Preliminary Final Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the
foregoing indemnity, and you, as the Representatives, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under paragraph (a) or (b) of this Section 7, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under paragraph
(a) or (b) of this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal defenses and
to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of such counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel (plus any local counsel), approved by the
Representatives in the case of paragraph (a) of this Section 7,
representing the indemnified parties under such paragraph (a) who are
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parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) or
(b) of this Section 7 is unavailable, the Company and the Guarantor, on the
one hand, and the Underwriters severally, on the other hand, shall
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) to which the Company, the Guarantor and
one or more of the Underwriters may be subject in proportion to the
relative benefits received by the Company and the Guarantor on the one hand
and the Underwriters on the other from the offering of the Securities, such
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount bears to the sum of such discount
and the purchase price of the Securities specified in Schedule I hereto and
the Company and the Guarantor are responsible for the balance; provided,
however, that in no case shall any Underwriter (except as may be provided
in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discount applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Guarantor, on the one
hand, and the Underwriters severally, on the other, shall contribute in
such proportion as is appropriate to reflect not only such relative
benefits as described in the immediately preceding sentence but also the
relative fault of the Company and the Guarantor on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages and liabilities as well as
any other relevant equitable considerations. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the
Company or the Guarantor on the one hand or the Underwriters on the other,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Guarantor and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person
who controls an Underwriter within the meaning of the Act shall have the
same rights to contribution as such Underwriter, and each person who
controls the Company within the meaning of either the Act or the Exchange
Act, each officer of the Company and the Guarantor who shall have signed
the Registration Statement and each director of the Company and the
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Guarantor shall have the same rights to contribution as the Company and the
Guarantor, subject in each case to the applicable terms and conditions of
this paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such party or
parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such non-defaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any non
defaulting Underwriter or the Company or the Guarantor. In the event of a
default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not exceeding seven days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
non-defaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company and
the Guarantor prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Guarantor's Common Stock shall have been suspended
by the Commission or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal, New York State or
Pennsylvania authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities.
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10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantor or their respective officers and of the Underwriters 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 Underwriter
or the Company or the Guarantor or any of the officers, directors or controlling
persons referred to in Section 7 hereof, and will survive delivery of and
payment for the Securities. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or transmitted by any standard form of telecommunication, at the
address specified in Schedule I hereto; or, if sent to the Company or the
Guarantor, will be mailed, delivered or transmitted by any standard form of
telecommunication to it at One PNC Plaza, 249 Fifth Avenue, Pittsburgh,
Pennsylvania 15222, attention of the Senior Vice President and Chief Financial
Officer of the Guarantor.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
-- END OF PAGE --
[signatures appear on following page]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Guarantor and the several Underwriters.
Very truly yours,
PNC Funding Corp
By: /s/ Kevin R. Glass
------------------------------------
Name: Kevin R. Glass
Title: Vice President
PNC Bank Corp.
By: /s/ Randall C. King
------------------------------------
Name: Randall C. King
Title: Senior Vice President
Confirmed and accepted,
intending to be legally
bound, as of the date specified
in Schedule I hereto.
By: Salomon Smith Barney Inc.
By: /s/ Kenneth McPhail
-----------------------------------
Name: Kenneth McPhail
Title: Director
For itself and the other
several Underwriters, if
any, named in Schedule II
to the foregoing Agreement.
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SCHEDULE I
Underwriting Agreement dated February 16, 1999
Registration Statement No. 333-34709
Representatives: Salomon Smith Barney Inc.
Title, Purchase Price and Description of Securities:
Title: 6 1/8% Subordinated Notes Due 2009
Principal Amount: $250,000,000
Public offering price: 99.847% of the Principal Amount plus
accrued interest, if any, from
February 22, 1999.
Purchase price: 99.197% of the Principal Amount plus
accrued interest, if any, from
February 22, 1999.
Sinking fund provisions: None
Redemption provisions: None
Other provisions: None
Closing Date, Time and
Location: February 22, 1999, 10:00 a.m. at the
office of Arnold & Porter, 555 Twelfth
Street, N.W., Washington, D.C. 20004
Type of Offering: Delayed Offering
Delayed Delivery Arrangements: None
Fee: N/A
Minimum principal amount of each contract: N/A
Maximum aggregate principal amount of all contracts: N/A
Modification of items to be covered by the letter from
Ernst & Young delivered pursuant to Section 5(e): Letter from Ernst & Young
to be delivered pursuant to Section 5(e) at the Closing Date, not also at
the Execution Time
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SCHEDULE II
Principal Amount
of Securities To
Underwriters Be Purchased
- ------------ ------------
Salomon Smith Barney Inc. $125,000,000
Chase Securities Inc. $ 50,000,000
Goldman, Sachs & Co. $ 50,000,000
PNC Capital Markets, Inc. $ 25,000,000
------------
Total ................... $250,000,000
============
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SCHEDULE III
Not applicable.