REGIONS FINANCIAL CORPORATION UNDERWRITING AGREEMENTUnderwriting Agreement |
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Exhibit 1.1
REGIONS FINANCING TRUST III
$300,000,000
8.875% Trust Preferred Securities
(liquidation amount $25 per security)
fully and unconditionally guaranteed by
REGIONS FINANCIAL CORPORATION
UNDERWRITING AGREEMENT
April 25, 2008
M ORGAN S TANLEY & C O . I NCORPORATED
M ORGAN K EEGAN & C OMPANY , I NC .
C ITIGROUP G LOBAL M ARKETS I NC .
M ERRILL L YNCH , P IERCE , F ENNER & S MITH I NCORPORATED
As Representatives of the Several Underwriters
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs:
1. Introductory . Regions Financing Trust III, a statutory trust created under the laws of the State of Delaware (the “ Trust ”), and Regions Financial Corporation, a Delaware corporation (the “ Guarantor ”), as depositor of the Trust and as Guarantor under the Guarantee Agreement referred to herein, agree with the several underwriters named in Schedule A hereto (the “ Underwriters ”), for whom you are acting as representatives (the “ Representatives ”), subject to the terms and conditions stated herein, to issue and sell to the several Underwriters 12,000,000 of the Trust’s 8.875% Trust Preferred Securities, liquidation amount $25 per security (the “Firm Trust Preferred Securities ”) and, at the election of the Underwriters, up to 1,800,000 additional Trust Preferred Securities (the “ Optional Trust Preferred Securities ”) (the Firm Trust Preferred Securities and the Optional Trust Preferred Securities which the Underwriters elect to purchase pursuant to Section 3 hereof are herein collectively called the “ Trust Preferred Securities ”). The proceeds of the sale of the Trust Preferred Securities and of the common securities of the Trust (the “ Trust Common Securities ”) to be sold by the Trust to the Guarantor are to be invested in $300,010,000 principal amount of the Guarantor’s 8.875% Junior Subordinated Notes due 2078 (the “ Junior Subordinated Notes ” and, together with the Trust Preferred Securities and the associated Guarantee, the “ Securities ”), to be issued pursuant to the indenture for subordinated debt securities between the Guarantor and Deutsche Bank Trust Company Americas (the “ Indenture Trustee ,” and such Junior Subordinated Indenture, the “ Base Indenture ”), as amended and supplemented by a fourth supplemental indenture between the Guarantor and the Indenture Trustee (the “ Supplemental Indenture ” and, together with the Base Indenture, the “ Indenture ”), each to be entered into at or before the Closing Date. If the Underwriters elect to purchase any Optional Trust Preferred Securities, the proceeds thereof are to be invested in additional Junior Subordinated Notes having an aggregate principal amount equal to the aggregate liquidation amount of such Optional Trust Preferred Securities.
Capitalized terms used herein and not otherwise defined but that are defined in the Declaration of Trust (as defined in Section 2(a)(8)) have the meanings specified in the Declaration of Trust.
2. Representations and Warranties . (a) Each of the Guarantor and the Trust jointly and severally represents and warrants as of the Applicable Time, the Firm Closing Date and the Optional Closing Date, as the case may be, to, and agrees with, the several Underwriters that:
(1) Filing and Effectiveness of Registration Statement; Certain Defined Terms . A registration statement on Form S-3 (No. 333-142839), and a post-effective amendment thereto, including a related prospectus or prospectuses, covering the registration of the Securities, has been filed with the Commission under the Act and has become effective. “ Registration Statement ” at any particular time means such registration statement in the form then filed with the Commission, including any amendment thereto, any document incorporated by reference therein and all 430B Information and all 430C Information with respect to such registration statement, that in any case has not been superseded or modified. “ Registration Statement ” without reference to a time means the Registration Statement as of the Effective Time. For purposes of this definition, 430B Information shall be considered to be included in the Registration Statement as of the time specified in Rule 430B.
For purposes of this Agreement:
“ 430B Information ” means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430B(e) or retroactively deemed to be a part of the Registration Statement pursuant to Rule 430B(f).
“ 430C Information ” means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430C.
“ Act ” means the Securities Act of 1933, as amended.
“ Applicable Time ” means 3:20 pm (Eastern time) on the date of this Agreement.
“ Closing Date ” has the meaning defined in Section 3 hereof.
“ Commission ” means the Securities and Exchange Commission.
“ Effective Time ” of the Registration Statement means the time of the first contract of sale for the Securities.
“ Exchange Act ” means the Securities Exchange Act of 1934.
“ Final Prospectus ” means the Statutory Prospectus that discloses the public offering price, other 430B Information and other final terms of the Securities and otherwise satisfies Section 10(a) of the Act.
“ Firm Closing Date ” has the meaning defined in Section 3 hereof.
“ General Use Issuer Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being so specified in Schedule B to this Agreement.
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“ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Trust’s and the Guarantor’s records pursuant to Rule 433(g).
“ Limited Use Issuer Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.
“ Optional Closing Date ” has the meaning defined in Section 3 hereof.
“ Rules and Regulations ” means the rules and regulations of the Commission.
“ Securities Laws ” means, collectively, the Sarbanes-Oxley Act of 2002 (“ Sarbanes-Oxley ”), the Act, the Exchange Act, the Trust Indenture Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange and the NASDAQ Stock Market.
“ Statutory Prospectus ” with reference to any particular time means the prospectus relating to the Securities that is included in the Registration Statement immediately prior to that time, including all 430B Information and all 430C Information with respect to the Registration Statement. For purposes of the foregoing definition, 430B Information shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b) and not retroactively.
“ Trust Indenture Act ” means the Trust Indenture Act of 1939.
Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Act.
(2) Compliance with Securities Act Requirements . (i) (A) At the time the Registration Statement initially became effective, (B) at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment, incorporated report or form of prospectus), (C) at the Effective Time relating to the Securities and (D) on each Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) (A) on its date, (B) at the time of filing the Final Prospectus pursuant to Rule 424(b) and (C) on each Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations, and will not 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 are made, not misleading. The preceding sentence does not apply to statements in or omissions from any such document based upon written information furnished to the Guarantor by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 8(b) hereof.
(3) Automatic Shelf Registration Statement . (i) Well-Known Seasoned Issuer Status . (A) At the time of initial filing of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (C) at the time the Guarantor or any person
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acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the Securities in reliance on the exemption of Rule 163, the Guarantor was a “well known seasoned issuer” as defined in Rule 405, including not having been and not being an “ineligible issuer” as defined in Rule 405.
(ii) Effectiveness of Automatic Shelf Registration Statement . The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405, that initially became effective within three years of the date of this Agreement. If immediately prior to the Renewal Deadline (as hereinafter defined), any of the Trust Preferred Securities remain unsold by the Underwriters, the Guarantor will prior to the Renewal Deadline file, if it has not already done so and is eligible to do so, a new automatic shelf registration statement relating to the Securities, in a form satisfactory to the Representatives. If the Guarantor is no longer eligible to file an automatic shelf registration statement, the Guarantor will prior to the Renewal Deadline, if it has not already done so, file a new shelf registration statement relating to the Securities, in a form satisfactory to the Representatives, and will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The Guarantor will take all other action necessary or appropriate to permit the public offering and sale of the Securities to continue as contemplated in the expired registration statement relating to the Securities. References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be. “ Renewal Deadline ” means the third anniversary of the initial effective time of the Registration Statement.
(iii) Eligibility to Use Automatic Shelf Registration Form . The Guarantor has not received from the Commission any notice pursuant to Rule 401(g)(2) objecting to use of the automatic shelf registration statement form. If at any time when Trust Preferred Securities remain unsold by the Underwriters the Guarantor receives from the Commission a notice pursuant to Rule 401(g)(2) or otherwise ceases to be eligible to use the automatic shelf registration statement form, the Guarantor will (i) promptly notify the Representatives, (ii) promptly file a new registration statement or post-effective amendment on the proper form relating to the Securities, in a form satisfactory to the Representatives, (iii) use its best efforts to cause such registration statement or post-effective amendment to be declared effective as soon as practicable, and (iv) promptly notify the Representatives of such effectiveness. The Guarantor will take all other action necessary or appropriate to permit the public offering and sale of the Trust Preferred Securities to continue as contemplated in the registration statement that was the subject of the Rule 401(g)(2) notice or for which the Guarantor has otherwise become ineligible. References herein to the Registration Statement shall include such new registration statement or post-effective amendment, as the case may be.
(iv) Filing Fees . The Guarantor has paid or shall pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
(4) Ineligible Issuer Status . (i) At the earliest time after the filing of the Registration Statement that the Trust, the Guarantor or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Trust Preferred Securities and (ii) at the date of this Agreement, neither the Trust nor the Guarantor was, and neither is, an “ineligible issuer,” as defined in Rule 405.
(5) General Disclosure Package . As of the Applicable Time, neither (i) the General Use Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time and the preliminary
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prospectus supplement, dated April , 2008, including the base prospectus, dated May 11, 2007 (which is the most recent Statutory Prospectus distributed to investors generally), and the other information, if any, stated in Schedule B to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the “ General Disclosure Package ”), nor (ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Guarantor by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.
(6) Issuer Free Writing Prospectuses . Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Trust Preferred Securities or until any earlier date that the Guarantor notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or as a result of which such Issuer Free Writing Prospectus, if republished immediately following such event or development, would include an untrue statement of a material fact or omitted or would 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, (i) the Guarantor has promptly notified or will promptly notify the Representatives and (ii) the Guarantor has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(7) Good Standing of the Trust. The Trust has been duly created and is validly existing as a statutory trust in good standing under the laws of the State of Delaware and, at the Firm Closing Date and the Optional Closing Date, will have the power and authority (trust and other) to own its property and conduct its business as described in the Registration Statement, General Disclosure Package and the Final Prospectus and to execute and deliver and perform its obligations under the Expense Agreement.
(8) Declaration of Trust . The Trust has conducted and will conduct no business other than the transactions contemplated by this Agreement and the Amended and Restated Declaration of Trust in substantially the form previously provided to you and to be entered into at or before the Firm Closing Date among the Guarantor, as Depositor, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as Delaware Trustee, and the individuals named therein, as Administrative Trustees (collectively, the “ Trustees ,” and such Amended and Restated Declaration of Trust, the “ Declaration of Trust ”) and described in the General Disclosure Package and the Final Prospectus; the Trust is not, and at each Closing Date will not be, a party to or bound by any agreement or instrument other than this Agreement, the Declaration of Trust and the Expense Agreement; and the Trust has no liabilities or obligations other than those arising out of the transactions contemplated by this Agreement and the Expense Agreement and described in the General Disclosure Package and the Final Prospectus.
(9) Authorization of Trust Preferred Securities . At the Firm Closing Date, the Firm Trust Preferred Securities, and Optional Closing Date, the Optional Trust Preferred Securities, will have been duly authorized and, when issued, delivered and paid for pursuant to this Agreement, will have been duly and validly issued and will be fully paid and non-assessable beneficial interests in
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the Trust entitled to the benefits of the Declaration of Trust and the Firm Trust Preferred Securities or the Optional Trust Preferred Securities, as the case may be, will conform in all material respects to the description thereof in the General Disclosure Package and the Final Prospectus.
(10) Authorization of Trust Common Securities . At the Firm Closing Date and the Optional Closing Date, the Trust Common Securities will have been duly authorized and will have been duly and validly issued and will be fully paid and non-assessable beneficial interests in the Trust entitled to the benefits of the Declaration of Trust and will conform in all material respects to the description thereof contained in the General Disclosure Package and the Final Prospectus; the issuance of the Trust Common Securities is not subject to preemptive or other similar rights; at each Closing Date, all of the issued and outstanding Trust Common Securities will be directly owned by the Guarantor, free and clear of all liens, encumbrances, equities or claims; and the Trust Common Securities and the Trust Preferred Securities are the only beneficial interests in the Trust authorized to be issued by the Trust.
(11) Limitation of Liability . The holders of the Trust Preferred Securities will be entitled to the same limitation on personal liability that is extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.
(12) Trust Transaction Agreements . At the Firm Closing Date, the Expense Agreement (collectively with this Agreement, the “ Trust Transaction Agreements ”) will have been duly authorized, executed and delivered by the Trust and will constitute a valid and legally binding instrument of the Trust, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the Trust Transaction Agreements will conform in all material respects to the descriptions thereof contained in the General Disclosure Package and the Final Prospectus.
(13) Authorization of Agreement . This Agreement has been duly authorized, executed and delivered by the Trust.
(14) Absence of Defaults and Conflicts Resulting From Transaction . At the Firm Closing Date and the Optional Closing Date, the Trust will have all power and authority necessary to execute and deliver this Agreement, the Trust Preferred Securities, the Trust Common Securities and the Expense Agreement, and to perform its obligations hereunder and thereunder; the issuance by the Trust of the Trust Preferred Securities and the Trust Common Securities in accordance with the Declaration of Trust, the purchase by the Trust of the Junior Subordinated Notes, and the execution and delivery by the Trust of the Trust Transaction Agreements and the performance by it of its obligations thereunder will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Guarantor or any of its subsidiaries or the Trust is a party or by which the Guarantor or any of its subsidiaries or the Trust is bound or to which any of the property or assets of the Guarantor or any of its subsidiaries or the Trust is subject; (ii) result in any violation of the provisions of the Declaration of Trust, the Restated Certificate of Incorporation, as amended, or By-laws of the Guarantor or (iii) result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Guarantor or any of its Significant Subsidiaries (as defined herein) or the Trust or any of their properties, which conflict, violation or breach or default in the case of clauses (i) and (iii) above, either individually or in the aggregate along with all other violations and defaults referred to in this paragraph (14) reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), results of operations, business, properties or prospects of the Guarantor and its subsidiaries, taken as a whole (a “ Material Adverse Effect ”); and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution, delivery and
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performance by the issue and sale of the Trust Preferred Securities and the Trust Common Securities by the Trust in accordance with the terms of the Declaration of Trust, the purchase by the Trust of the Junior Subordinated Notes, or the execution, delivery or performance by the Trust of the Expense Agreement or the consummation by the Trust of the transactions contemplated thereby, except such as have been obtained under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Trust Preferred Securities by the Underwriters.
(15) Investment Company Act. The Trust is not, and after giving effect to the offering and sale of the Trust Preferred Securities will not be, an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “ Investment Company Act ”).
(b) The Guarantor represents and warrants as of the Applicable Time, the Firm Closing Date, and the Optional Closing Date, as the case may be, to, and agrees with, the several Underwriters that:
(1) Good Standing of the Guarantor . The Guarantor has been duly incorporated and is existing and in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the General Disclosure Package and the Final Prospectus; and the Guarantor is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except for such failures to be so qualified as would not reasonably be expected to result in a Material Adverse Effect.
(2) Bank Holding Company . The Guarantor is duly registered as a bank holding company and a financial holding company under the Bank Holding Company Act of 1956, as amended.
(3) Good Standing of Regions Bank . Regions Bank is a duly organized and validly existing Alabama state chartered bank and continues to hold a valid certificate to do business as such.
(4) Subsidiaries . Each significant subsidiary of the Guarantor (as such term is defined in Rule 1-02 of Regulation S-X) (each a “ Significant Subsidiary ” and collectively, the “ Significant Subsidiaries ”) has been duly formed and is existing and in good standing under the laws of the jurisdiction of its formation, with power and authority (corporate and other) to own its properties and conduct its business as described in the General Disclosure Package and the Final Prospectus; and each Significant Subsidiary of the Guarantor is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification (except in any case in which the failure to so qualify or be in good standing would not reasonably be expected to result in a Material Adverse Effect; all of the issued and outstanding capital stock of each Significant Subsidiary of the Guarantor has been duly authorized and validly issued and is fully paid and nonassessable (except as provided in statutes pursuant to which depository institutions are subject); and the capital stock of each Significant Subsidiary owned by the Guarantor, directly or through subsidiaries, is owned free from liens, encumbrances and defects.
(5) Compliance with Laws . The Guarantor and each of its subsidiaries are in compliance with all laws administered by the Board of Governors of the Federal Reserve System (the “ Federal Reserve Board ”), the Federal Deposit Insurance Corporation (the “ FDIC ”), the Alabama Department of Banking (the “ Department ”) and any other federal or state bank regulatory authorities (together with the Federal Reserve Board, the FDIC and the Department, the “ Bank Regulatory Authorities ”) with jurisdiction over the Guarantor and its subsidiaries, except for such failures to be in compliance as would not reasonably be expected to result in a Material
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Adverse Effect. Except to the extent disclosed in the General Disclosure Package, the Guarantor, its Significant Subsidiaries and Morgan Keegan & Company, Inc. are in compliance with all laws administered by the Commission and the Financial Industry Regulatory Authority (“ FINRA ”), except for such failures to be in compliance as would not reasonably be expected to result in a Material Adverse Effect. The deposit accounts of each bank subsidiary of the Guarantor are insured up to applicable limits by the FDIC and no proceedings for the termination or revocation of such insurance are pending or, to the knowledge of the Guarantor, threatened. Neither the Guarantor nor any of its subsidiaries is a party to or otherwise subject to any consent decree, memorandum of understanding, written commitment or other supervisory agreement with any of the Bank Regulatory Authorities, nor have the Guarantor or any of its subsidiaries been advised by any of the Bank Regulatory Authorities that it is contemplating issuing or requesting any of the foregoing.
(6) Administrative Trustees . Each of the Administrative Trustees is an employee of or affiliated with the Guarantor and, at the Firm Closing Date, the Declaration of Trust will have been duly executed and delivered by each Administrative Trustee and will constitute a valid and legally binding instrument of the Guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
(7) Execution and Delivery of Guarantor Transaction Documents . The Junior Subordinated Notes have been duly authorized by the Guarantor, and, when issued, delivered and paid for at the Firm Closing Date and the Optional Closing Date, as the case may be, as contemplated by the General Disclosure Package, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Guarantor entitled to the benefits provided by the Indenture; each of the Indenture, the Declaration of Trust and the Guarantee Agreement (the Declaration of Trust and the Guarantee Agreement, collectively, the “ Other Guarantor Transaction Agreements ” and, together with this Agreement, the Indenture and the Junior Subordinated Notes, the “ Guarantor Transaction Agreements ”) has been duly authorized by the Guarantor and, at each Closing Date, each of the Indenture, the Guarantee Agreement and the Declaration of Trust will be duly qualified under the Trust Indenture Act and will constitute a valid and legally binding instrument of the Guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the Junior Subordinated Notes, the Indenture and the Other Guarantor Transaction Agreements will conform in all material respects to the descriptions thereof in the General Disclosure Package and the Final Prospectus.
(8) Authorization of Agreement . This Agreement has been duly authorized, executed and delivered by the Guarantor.
(9) Statements. The statements set forth in the General Disclosure Package and the Final Prospectus under the captions “The Trust,” “Description of the Trust Preferred Securities,” “Description of the Junior Subordinated Notes,” “Description of the Guarantee of the Trust Preferred Securities,” “Relationship Among Trust Preferred Securities, Junior Subordinated Notes and Guarantee,” and “Replacement Capital Covenant,” insofar as they are descriptions of contracts, agreements or other legal documents or describe Federal statutes, rules and regulations, and under the caption “Underwriting,” insofar as they purport to describe the provisions of the documents referred to therein, constitute an accurate summary of the matters set forth therein in all material respects; the statements set forth in the General Disclosure Package and the Final Prospectus under the caption “Certain United States Federal Income Tax Consequences” and “ERISA Considerations,” insofar as they purport to constitute a summary of matters of U.S. federal income tax law or the U.S. Employee Retirement Income Security Act of 1974, as amended, and regulations or legal conclusions with respect thereto, constitute an accurate summary of the matters set forth therein in all material respects.
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(10) Absence of Defaults and Conflicts Resulting from Transaction . The execution, delivery and performance of the Guarantor Transaction Agreements and this Agreement, and the issuance and sale of the Trust Preferred Securities and Junior Subordinated Notes and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Guarantor or any of its Significant Subsidiaries pursuant to, (i) the charter or by-laws of the Guarantor or any of its Significant Subsidiaries, (ii) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Guarantor or any of its Significant Subsidiaries or any of their properties, or (iii) any agreement or instrument to which the Guarantor or any of its Significant Subsidiaries is a party or by which the Guarantor or any of its Significant Subsidiaries is bound or to which any of the properties of the Guarantor or any of its Significant Subsidiaries is subject, except in the case of clauses (ii) and (iii) above, for any such breach, violation, default or imposition of any lien, charges or encumbrances that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(11) Absence of Existing Defaults and Conflicts . Neither the Guarantor nor any of its subsidiaries is (i) in violation of its respective charter or by-laws or (ii) in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject, except such defaults that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(12) Possession of Licenses and Permits . The Guarantor and its Significant Subsidiaries possess, and are in compliance with the terms of, all certificates, authorizations, franchises, licenses and permits (“ Licenses ”) necessary to conduct their respective businesses now conducted or proposed in the General Disclosure Package and the Final Prospectus to be conducted by them, except those the failure of which to possess or to be in noncompliance with would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and have not received any notice of proceedings relating to the revocation or modification of any Licenses that, if determined adversely to the Guarantor or any of its Significant Subsidiaries, would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.
(13) Absence of Labor Dispute. No labor dispute with the employees of the Guarantor or any of its Significant Subsidiaries exists or, to the knowledge of the Guarantor, is imminent that could have a Material Adverse Effect.
(14) Environmental Laws . The Guarantor and its Significant Subsidiaries are to their knowledge (i) in substantial compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“ Environmental Laws ”), (ii) have received and are in substantial compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received any unresolved notice of any actual or potential liability for the investigation or remediation of any unpermitted disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
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(15) Absence of Manipulation . The Guarantor has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Guarantor to facilitate the sale or resale of the Trust Preferred Securities.
(16) Internal Controls and Compliance with the Sarbanes-Oxley Act. The Guarantor has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) that (A) are designed to ensure that material information relating to the Guarantor, including its consolidated subsidiaries, is made known to the Guarantor’s Chief Executive Officer and its Chief Financial Officer by others within those entities, particularly during the periods in which the filings made by the Guarantor with the Commission which it may make under Section 13(a), 13(c) or 15(d) of the Exchange Act are being prepared, (B) have been evaluated for effectiveness as of the Guarantor’s most recent fiscal quarter and (C) are effective to perform the functions for which they were established.
The Guarantor has established and maintains internal control over financial reporting (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) that (a) provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and (b) have been evaluated by the management of the Guarantor (including the Guarantor’s Chief Executive Officer and Chief Financial Officer) for effectiveness as of the end of the Guarantor’s most recent fiscal year. The management of the Guarantor (including the Guarantor’s Chief Executive Officer and Chief Financial Officer) has evaluated any change that has materially affected, or is reasonably likely to affect, the Guarantor’s internal control over financial reporting as of the end of the Guarantor’s most recent fiscal quarter. In addition, not later than the date of the filing with the Commission of the Guarantor’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, each of the accountants and the audit committee of the board of directors of the Guarantor have been advised of (A) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Guarantor’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Guarantor’s internal control over financial reporting. Except as described in the General Disclosure Package and the Final Prospectus, since the end of the Guarantor’s most recent audited fiscal year, there has been (I) no material weakness in the Guarantor’s internal control over financial reporting (whether or not remediated) and (II) no change in the Guarantor’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Guarantor’s internal control over financial reporting.
(17) Financial Statements . The consolidated historical financial statements of (i) the Guarantor and its consolidated subsidiaries included in the General Disclosure Package, the Final Prospectus and the Registration Statement present fairly in all material respects the financial condition of the Guarantor and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis (except as otherwise noted therein), and (ii) AmSouth Bancorporation (“ AmSouth ”) and its consolidated subsidiaries included in the General Disclosure Package, the Final Prospectus and the Registration Statement present fairly in all material respects the financial condition of AmSouth and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis (except as otherwise noted therein); and the schedules included in the Registration Statement present fairly the information required to be stated therein. The pro forma financial statements and the related notes thereto included in the General Disclosure
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Package, the Registration Statement and the Final Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
(18) No Material Adverse Change in Business . Except as disclosed in the General Disclosure Package and the Final Prospectus, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package and the Final Prospectus, (i) there has been no Material Adverse Effect, and (ii) there has been no material adverse change in the capital stock or long-term indebtedness of the Guarantor and its subsidiaries, taken as a whole.
(19) Investment Company Act . The Guarantor is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the General Disclosure Package and the Final Prospectus, will not be an “investment company” as defined in the Investment Company Act.
(20) Ratings . No “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g)(2) (i) has imposed (or has informed the Guarantor that it is considering imposing) any condition (financial or otherwise) on the Guarantor’s retaining any rating assigned to the Guarantor or any securities of the Guarantor or (ii) has indicated to the Guarantor that it is considering any of the actions described in Section 7(c)(ii) hereof.
(21) Absence of Further Requirements . No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Act and the Exchange Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Trust Preferred Securities by the Underwriters in the manner contemplated herein, in the General Disclosure Package and the Final Prospectus.
(22) Absence of Proceedings . There is no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Guarantor or any of its Significant Subsidiaries or its or their property is pending or, to the best knowledge of the Guarantor, threatened that (i) would reasonably be expected to have a material adverse effect on the performance of this Agreement or the Guarantor Transaction Agreements or the consummation of any of the transactions contemplated hereby or (ii) would reasonably be expected to result in a Material Adverse Effect.
(23) Tax Compliance . The Guarantor has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not reasonably be expected to have a Material Adverse Effect) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not reasonably be expected to result in a Material Adverse Effect.
(24) Insurance . The Guarantor and each of its Significant Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Guarantor or any of its Significant Subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Guarantor and its Significant Subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Guarantor or any of its
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Significant Subsidiaries in excess of $2,500,000 individually or $15,000,000 in the aggregate under any such policy or instrument as to which any insurance company is denying liability; neither the Guarantor nor any of its Significant Subsidiaries has been refused any insurance coverage sought or applied for; and neither the Guarantor nor any such Significant Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to result in a Material Adverse Effect.
(25) Dividends and Distributions . No subsidiary of the Guarantor is currently prohibited, directly or indirectly, from paying any dividends to the Guarantor, from making any other distribution on such subsidiary’s capital stock, from repaying to the Guarantor any loans or advances to such subsidiary from the Guarantor or from transferring any of such subsidiary’s property or assets to the Guarantor or any other subsidiary of the Guarantor, except as described in or contemplated by the General Disclosure Package and the Final Prospectus and applicable banking laws and regulations.
(26) Use of Proceeds . Except as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus, the Guarantor does not intend to use any of the proceeds from the sale of the Junior Subordinated Notes hereunder to repay any outstanding debt owed to any affiliate of any of the Underwriters.
(27) AML Compliance . The operations of the Guarantor and its subsidiaries are currently in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all United States jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency of the United States (collectively, the “ Money Laundering Laws ”), except where the failure to so comply would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and there are no material actions, suits or proceedings by or before any court or governmental agency, authority or body or any arbitrator involving the Guarantor or any of its subsidiaries with respect to the Money Laundering Laws that are pending or, to the knowledge of the Guarantor, threatened.
(28) Dealings with OFAC Restricted Persons . Neither the Guarantor nor any of its affiliates does business with the government of, or any person located in, any country, or with any other person, targeted by any of the economic sanctions of the United States administered by the United States Treasury Department’s Office of Foreign Assets Control; the Guarantor is not controlled (within the meaning of the regulations promulgating such sanctions or the laws authorizing such promulgation) by any such government or person; and the proceeds from the offering will not be used to fund any operations in, finance any investments or activities in or make any payments to, any country, or to make any payments to any person, targeted by any of such sanctions.
3. Purchase, Sale and Delivery of Trust Preferred Securities . On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, (a) the Guarantor and the Trust agree that the Trust will sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, at a purchase price of $25.00 per Trust Preferred Security, plus accumulated distributions, if any, from the date of the original issuance, the number of Firm Trust Preferred Securities set forth opposite the names of such Underwriters in Schedule A hereto and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Trust Preferred Securities as provided below, the Guarantor and the Trust agree to sell to the several Underwriters, and each of the Underwriters agrees, severally, and not jointly, to purchase from the Trust at a purchase price of $25.00 per Trust Preferred Security, plus accumulated distributions, if any, from the date of the original issuance, that portion of the number of Optional Trust Preferred Securities as to which such election shall have been exercised up to the number of Optional Trust Preferred Securities set forth opposite the names of such Underwriters in Schedule A hereto.
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The Trust hereby grants to the Underwriters the right to purchase at their election up to the number of Optional Trust Preferred Securities set forth opposite the name of such Underwriter in Schedule A hereto on the terms referred to in the first paragraph of this Section 3 for the sole purpose of covering sales of securities in excess of the aggregate principal amount of Firm Trust Preferred Securities. Any such election to purchase Optional Trust Preferred Securities may be exercised by written notice from the Representatives to the Trust, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Trust Preferred Securities to be purchased and the date on which such Optional Trust Preferred Securities are to be delivered, as determined by the Representatives but in no event earlier than the Firm Closing Date or, unless the Representatives and the Trust otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.
As compensation to the Underwriters for their commitments hereunder, and in view of the fact that the proceeds from the sale of the Trust Preferred Securities will be used by the Trust to purchase the Junior Subordinated Notes, the Guarantor on the applicable Closing Date will pay by wire transfer of immediately available funds to Morgan Stanley & Co. Incorporated, for the accounts of the several Underwriters, $0.50 (institutional) per Trust Preferred Security and $0.7875 (retail) per Trust Preferred Security in respect of the Trust Preferred Securities to be delivered by the Trust hereunder on the Firm Closing Date with respect to the Firm Trust Preferred Securities and on the Optional Closing Date with respect to the Optional Trust Preferred Securities.
The Trust will deliver the Firm Trust Preferred Securities to or as instructed by the Representatives for the accounts of the several Underwriters in a form reasonably acceptable to the Representatives against payment of the purchase price by the Underwriters through Morgan Stanley & Co. Incorporated in Federal (same day) funds by wire transfer to an account at a bank designated by the Guarantor at the office of Alston & Bird LLP, 90 Park Avenue, New York, New York 10016, at 10:00 A.M., New York time, on April 30, 2008, or at such other time not later than seven full business days thereafter as the Representatives and the Guarantor determine, such time being herein referred to as the “ Firm Closing Date ”. Delivery with respect to the Optional Trust Preferred Securities, if any, shall be made on the date and at the time given by the Representatives of the Underwriters’ election to purchase the Optional Trust Preferred Securities, or at such other time and date as the Representatives, the Trust and the Guarantor may agree upon in writing (such time and date, if not the Firm Closing Date, is herein called the “ Optional Closing Date” , and each such time and date for delivery, including the Firm Closing Date, is herein called a “ Closing Date ”). For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Trust Preferred Securities sold pursuant to the offering. The Trust Preferred Securities so to be delivered or evidence of their issuance will be made available for checking at the above office of Alston & Bird LLP at least 24 hours prior to each Closing Date.
4. Offering by Underwriters . It is understood that the several Underwriters propose to offer the Trust Preferred Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements . The Trust and the Guarantor agree with the several Underwriters that:
(a) Filing of Prospectuses. The Guarantor has filed or will file each Statutory Prospectus (including the Final Prospectus) pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and consented to by the Representatives, subparagraph (5)) not later than the second business day following the earlier of the date it is first used or the execution and delivery of this Agreement. The Guarantor has complied and will comply with Rule 433 with respect to an Issuer Free Writing Prospectus.
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(b) Filing of Amendments; Response to Commission Requests . During the period when a prospectus relating to the Securities is required to be delivered under the Act by any Underwriter or dealer, the Guarantor will promptly notify the Representatives (i) when any post-effective amendment to the Registration Statement or new registration statement relating to the Securities shall become effective, or any supplement to the Final Prospectus or any amended Final Prospectus shall have been filed, (ii) any request by the Commission or its staff for any amendment to the Registration Statement, for any supplement to any Statutory Prospectus or any document incorporated by reference therein or otherwise deemed to be a part thereof or for any additional information, (iii) the institution by the Commission of any stop order proceedings in respect of the Registration Statement or the threatening of any proceeding for that purpose, and (iv) the receipt by the Guarantor or the Trust of any notification with respect to the suspension of the qualification of any of the Securities in any jurisdiction or the institution or threatening of any proceedings for such purpose. The Guarantor and the Trust will use its best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(c) Continued Compliance with Securities Laws . If, at any time when a prospectus relating to the Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or dealer, any event occurs as a result of which the Final Prospectus as then amended or supplemented would include an 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 is necessary at any time to amend the Registration Statement or supplement the Final Prospectus to comply with the Act, the Guarantor will promptly notify the Representatives of such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 7 hereof.
(d) Rule 158. The Guarantor will timely file such reports pursuant to the Exchange Act as are necessary in order to make generally available to its securityholders as soon as practicable, but not later than 16 months after the date of this Agreement, an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the Act.
(e) Furnishing of Prospectuses . The Guarantor will furnish to the Representatives copies of the
