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Auction Rate Securities Sold by Morgan Keegan

QUESTIONS AND ANSWERS RELATED TO REPURCHASE OF AUCTION RATE SECURITIES SOLD BY MORGAN KEEGAN

  1. Who is offering to purchase my securities?
  2. To whom is this offer being made?
  3. What securities are you offering to purchase?
  4. How much of my Eligible Securities is Morgan Keegan offering to purchase at this time?
  5. If I hold more than one unit of Eligible Securities, which unit will be repurchased?
  6. What is the Disclosure Letter and how might it impact my Eligible Securities?
  7. Are there any conditions to this offer?
  8. What will I receive if I accept this offer?
  9. What is the fee to accept this offer?
  10. When will this offer begin and expire?
  11. Am I required to accept this offer?
  12. How do I accept this offer and validly tender my Eligible Securities?
  13. What if I bought my securities through Morgan Keegan, but am not currently a Morgan Keegan customer?
  14. If I accept this offer and tender my Eligible Securities, when will Morgan Keegan accept the tender?
  15. What if the issuer redeems my Eligible Securities before Morgan Keegan accepts my tender?
  16. When and how will I be paid for my validly tendered Eligible Securities?
  17. Can I change my mind after I have accepted this offer?
  18. How do I withdraw tendered Eligible Securities?
  19. If I accept this offer, will I have any U.S. Federal income tax consequences?
  20. What will Morgan Keegan do with any securities that it purchases in this offer?
  21. What happens if I fail to accept this offer?
  22. What will I receive if I fail to accept this offer?
  23. Where can I find out more about Morgan Keegan’s Material Auction Rate Securities Practices and Procedures?
  24. What do I need to do to reject this offer?
  25. Is this offer the exclusive means by which Morgan Keegan will purchase any auction rate securities?
  26. What happens if I hold my Eligible Securities in an advisory account over which Morgan Keegan exercises discretionary investment authority?
  27. I am a Discretionary Client. How do I inform Morgan Keegan that I have elected not to tender my Eligible Securities?
  28. How will you contact me if there are any changes to or an extension of this offer?

 

1. Who is offering to purchase my securities?
Morgan Keegan is making this offer to purchase the Eligible Securities for cash. Each of the offers to purchase each individual series of the Eligible Securities shall be deemed a separate offer.

2. To whom is this offer being made?
To be eligible for this offer, the Eligible Securities must have been sold by Morgan Keegan to a Morgan Keegan account that is not an “Institutional” account (defined as an account held by entities with securities holdings of $10 million or more). We refer to this group as the Eligible Holders. Morgan Keegan and Regions Financial Corp. current and former employees will not be considered Eligible Holders until all other Eligible Holders have had their holdings redeemed or have been given the opportunity to tender their Eligible Securities for buy back under the terms of this program. Eligible Securities purchased in a Morgan Keegan account that have been transferred to other firms arenot a part of this offer. Accounts transferred from another firm containing auction rate securities not purchased from Morgan Keegan are not Eligible Holders.

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3. What securities are you offering to purchase?
We are offering to purchase a unit of auction rate securities, excluding auction rate securities issued by Jefferson County, Alabama, that we sold to Eligible Holders, prior to the auction failure, which are not subject to a Disclosure Letter, upon the terms and subject to the conditions set forth in this offer. We refer to these securities as the Eligible Securities. For more information on which specific securities, if not subject to a Disclosure Letter, are Eligible Securities, please visit www.morgankeegan.com/ARSrepurchase, or you may contact the Morgan Keegan Reorg Department at 1-877-901-3239. Further the Acceptance Form accompanying this offer to Purchase identifies the specific Eligible Securities each Eligible Holder owns that Morgan Keegan is offering to purchase at this time. Your monthly account statements will allow you to determine whether you own any Eligible Securities and the amount of any Eligible Securities you own. You should obtain and review all such information before you make a decision with respect to this offer.

4. How much of my Eligible Securities is Morgan Keegan offering to purchase at this time?
At this time, Morgan Keegan is offering to purchase a unit of Eligible Securities, as defined in the appropriate Offer to Purchase, from certain accounts holding Eligible Securities.

5. If I hold more than one unit of Eligible Securities, which unit will be repurchased?
If an Eligible Holder holds more than one unit of Eligible Securities in an account, Morgan Keegan shall repurchase the Eligible Securities with the lowest Cusip number first, and then move to successively higher Cusip numbers, if necessary. The Acceptance Form accompanying this offer will designate the Eligible Securities Morgan Keegan is offering to purchase at this time.

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6. What is the Disclosure Letter and how might it impact my Eligible Securities?
Many Eligible Holders chose to continue to purchase auction rate securities after the auctions began failing. These Eligible Holders were required to sign a Disclosure Letter prior to purchasing these securities. Any auction rate securities purchased after a Disclosure Letter was executed are not Eligible Securities. Auction rate securities purchased before a Disclosure Letter was executed, even if they are the same CUSIP number as those purchased after the Disclosure Letter, are Eligible Securities.

7. Are there any conditions to this offer?
No, there are no conditions to this offer. If the unit of Eligible Securities is validly tendered and not properly withdrawn by Eligible Holders, we will purchase the unit of Eligible Securities. In addition, each offer is independent and is not conditioned upon any other offer.

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8. What will I receive if I accept this offer?
If you accept this offer with respect to Eligible Securities that you currently hold, you will receive cash in the amount of par plus accrued interest for that unit, if any.

9. What is the fee to accept this offer?
We will not charge you any brokerage fees or commissions if you accept this offer.

10. When will this offer begin and expire?
This offer will begin on December 21, 2009 and expire at 11:59 p.m., Eastern Standard Time, on January 25, 2010.

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11. Am I required to accept this offer?
No, you are not required to accept this offer. However, your decision not to accept this offer may affect your ability to sell your Eligible Securities in the future (see discussion under “What will I receive if I fail to accept this offer?” and “Risk Factors” in the Offer to Purchase). Neither the tender of your Eligible Securities nor our purchase of your Eligible Securities pursuant to this offer will constitute a waiver of any claims you may have against Morgan Keegan.

12. How do I accept this offer and validly tender my Eligible Securities?
If you are an Eligible Holder and wish to accept this offer you must:

  • Complete the Acceptance Form that accompanies this document and ensure it is transmitted by fax to us, or postmarked if sent by mail, by 11:59 p.m., Eastern Standard Time, on January 25, 2010 at the following fax number or address:
    Morgan Keegan & Company, Inc.
    Attn: Auction Rate Securities Processing
    Reorg Department
    50 North Front Street
    Memphis, TN 38103
    Fax: 901-529-5371

If your acceptance of this offer is not received by fax, or postmarked if sent by mail, in good order by 11:59 p.m., Eastern Standard Time, on January 25, 2010, you will be deemed to have rejected this offer, unless you are a Discretionary Client. See “What happens if I hold my Eligible Securities in an advisory account over which Morgan Keegan exercises discretionary investment authority?” below.

We reserve the absolute right to reject any or all acceptances of this offer that do not comply with the terms set forth herein, including for lack of satisfactory proof that the holder meets the definition of an Eligible Holder, or the acceptance of which, in our opinion, would be unlawful. We also reserve the right to waive any defects, irregularities or conditions applicable to particular acceptances of this offer for any or all of your Eligible Securities. Our interpretation of the terms and conditions of this offer will be final and binding.

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13. What if I bought my securities through Morgan Keegan, but am not currently a Morgan Keegan customer?
If you hold Eligible Securities through a broker other than Morgan Keegan, you may be eligible for an offer at a later date. This current offer is only for securities held at Morgan Keegan.

14. If I accept this offer and tender my Eligible Securities, when will Morgan Keegan accept the tender?
Morgan Keegan will accept the tender of Eligible Securities beginning in February 2010, and the repurchase will be concluded no later than February 19, 2010.

15. What if the issuer redeems my Eligible Securities before Morgan Keegan accepts my tender?
If the Eligible Securities is redeemed prior to our acceptance date, we will not accept your Eligible Securities. Instead, your Eligible Securities will be redeemed by its issuer, and you will be paid pursuant to the terms of those Securities.

16. When and how will I be paid for my validly tendered Eligible Securities?
In general, if you validly tender your Eligible Securities and do not properly withdraw them, you will receive payment no later than February 19, 2010.

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17. Can I change my mind after I have accepted this offer?
You may withdraw the Eligible Securities you validly tender prior to the time we accept the tender of your Eligible Securities.

18. How do I withdraw tendered Eligible Securities?
If you are an Eligible Holder and would like to withdraw your tendered Eligible Securitiesyou must:

  • Send a written or facsimile transmission notice of withdrawal so that it is received by us prior to the time we accept the tender of your Eligible Securities, at our fax number or address set forth below:
    Morgan Keegan & Co., Inc.
    Attn: Auction Rate Securities Processing
    Reorg Department
    50 North Front Street
    Memphis, TN 38103
    Fax: 901-529-5371

Any such notice of withdrawal must (1) specify the name of the account holder(s) and applicable account number(s) that tendered the Eligible Securities to be withdrawn, (2) be signed by the holder of such Eligible Securities in the same manner as the original signature on the Acceptance Form by which such Eligible Securities was validly tendered. Any Eligible Securities properly withdrawn will be deemed to be not validly tendered for purposes of this offer. We will not be under any duty to givenotification of any defects or irregularities in any notice of withdrawal, or incur any liability for failure to give any such notification. We reserve the absolute right to reject any or all withdrawals that are not in proper form. We reserve the right to waive any defects, irregularities or conditions applicable to particular withdrawals of this offer for any or all of your Eligible Securities. Our interpretation of the terms and conditions of this offer will be final and binding. Withdrawal of an Eligible Securities can be accomplished only in accordance with the foregoing procedures.

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19. If I accept this offer, will I have any U.S. Federal income tax consequences?
Please see the discussion under “U.S. Federal Income Tax Considerations” in the Offer to Purchase.

20. What will Morgan Keegan do with any securities that it purchases in this offer?
If we purchase any securities pursuant to this offer, we intend to hold them on a principal basis, and may offer them for resale (or, to the extent we have a short position in respect of those securities, to use them to close out our short position). Resales of securities by us could have an adverse effect on the market value of any securities you elect to retain. We also reserve the right to dispose of the securities we purchase in any method we deem proper, including to hold or seek to restructure, redeem or otherwise dispose of the securities. Some or all of these dispositions could have an adverse effect on the market value of the securities you elect to retain. While we do not anticipate the ability to sell these instruments for more than par, it is possible that at some future point the prices or values received by us when we dispose of the securities may be more than that received by Eligible Holders for the same or similar securities in this offer. In addition, the interest rates we receive on the securities may be less than, equal to or more than those received by Eligible Holders for the same or similar securities tendered in this offer. We may also earn customary fees in the future in connection with arranging the restructuring, redemption or other disposition of the securities held by us or by our clients.

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21. What happens if I fail to accept this offer?
If you fail to accept this offer before it expires, you will be deemed to have rejected this offer, unless you are a Discretionary Client. See “What happens if I hold my Eligible Securities in an advisory account over which Morgan Keegan exercises discretionary investment authority?” below. We expressly reserve the absolute right, in our sole discretion, from time to time to purchase any Eligible Securities that remain outstanding following termination or expiration of this offer through open market or privately negotiated transactions, one or more additional tender or exchange offers or otherwise, on terms that may be equal to or less favorable than the terms we are offering pursuant to this offer.

22. What will I receive if I fail to accept this offer?
Except for Discretionary Clients, where we may tender your Eligible Securities on your behalf as described below under “What happens if I hold my Eligible Securities in an advisory account over which Morgan Keegan exercises discretionary investment authority?”, if you fail to accept this offer and you continue to hold your securities, you will continue to be entitled to payments, if any, on the securities in accordance with their terms. We will have no obligation to purchase your Eligible Securities after this offer expires. If you fail to accept this offer and you sell your securities, you will not receive any amount in connection with this offer.

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23. Where can I find out more about Morgan Keegan’s Material Auction Rate Securities Practices and Procedures?
A description of our Material Auction Rate Securities Practices and Procedures is available without charge by contacting the Morgan Keegan Reorg Department at 1-877-901-3239 or by visiting: www.morgankeegan/ARSrepurchase.

See also “Risk Factors” in the Offer to Purchase for a description of other factors you should consider as you evaluate this offer.

24. What do I need to do to reject this offer?
You do not need to do anything to reject this offer. If you do not tender your securities you will be deemed to have rejected this offer, unless you are a Discretionary Client. See “What happens if I hold my Eligible Securities in an advisory account over which Morgan Keegan exercises discretionary investment authority?” below.

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25. Is this offer the exclusive means by which Morgan Keegan will purchase any auction rate securities?
No. In our sole discretion we may purchase auction rate securities from non-Eligible Holders in privately negotiated transactions. In addition, we may purchase, in our sole discretion, on a case-by-case basis, Eligible Securities from Eligible Holders on a different settlement cycle from that described above or auction rate securities from Eligible Holders, the auctions for which are clearing.

We also expressly reserve the absolute right, in our sole discretion, from time to time, to purchase any Eligible Securities that remain outstanding following termination or expiration of this offer through open market or privately negotiated transactions, one or more additional tender or exchange offers or otherwise.

26. What happens if I hold my Eligible Securities in an advisory account over which Morgan Keegan exercises discretionary investment authority?
Certain Eligible Holders may have advisory accounts over which Morgan Keegan exercises discretionary investment authority. We refer to such Eligible Holders as Discretionary Clients. If you are a Discretionary Client, you may accept this offer pursuant to the procedures described in this document. If you are a Discretionary Client and you do not inform us orally or in writing that you have elected not to tender your Eligible Securities in this offer by 11:59 p.m., Eastern Standard Time, on January 25, 2010, Morgan Keegan may accept this offer and tender your Eligible Securities on your behalf without first obtaining your affirmative consent to the transaction. If we take such action, you will be paid for each Eligible Securities in accordance with the terms of this offer. Alternatively, we may decide not to exercise discretionary authority to determine whether to tender Eligible Securities on your behalf.For more information regarding advisory accounts, see the discussion under “Special Disclosure for Advisory Accounts” in the Offer to Purchase.

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27. I am a Discretionary Client. How do I inform Morgan Keegan that I have elected not to tender my Eligible Securities?
If you are a Discretionary Client and would like to inform Morgan Keegan that you have elected not to tender your Eligible Securities you must:

  • Send a written or facsimile transmission notice of election not to tender Eligible Securities so that it is received by us by 11:59 p.m., Eastern Standard Time, on January 25, 2010, at our fax number or address set forth below:
    Morgan Keegan & Company, Inc.
    Attn: Auction Rate Securities Processing
    Reorg Department
    50 North Front Street
    Memphis, TN 38103
    Fax: 901-529-5371

Any such notice of election not to tender Eligible Securities must (1) specify the name of and account number and contact information for the Discretionary Client, (2) be signed by the Discretionary Client and (3) specify which Eligible Securities you do not wish tendered on your behalf.

28. How will you contact me if there are any changes to or an extension of this offer?
If there is a material change to or an extension of this offer we will promptly disseminate the information and post the information to our website at: www.morgankeegan/ARSrepurchase .In addition, any information on such change or extension will be available by contacting the Morgan Keegan Reorg Department at 1-877-901-3239.

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Auction Rate Securities Sold by Morgan Keegan