Exhibit 10.3

 

EXECUTION COPY

 

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (this “Agreement”) is entered into as of this 15th day of
August, 2014, among Jennifer W. Steans, as the designated representative of the
stockholders of Taylor Capital Group, Inc., a Delaware corporation (“Taylor
Capital”), set forth on Exhibit A hereto (the “Principal Stockholders”), MB
Financial Bank, N.A., a national banking association with its main office
located in Chicago, Illinois (“Acquiror Bank”), and The Northern Trust Company,
an Illinois-chartered state bank with its main office located in Chicago,
Illinois, as escrow agent (“Escrow Agent”).

 

RECITALS

 

A.                        Taylor Capital and MB Financial, Inc., a Maryland
corporation (“MB”), previously entered into that certain Agreement and Plan of
Merger, dated as of July 14, 2013, and amended as of June 30, 2014 (the “Merger
Agreement”), pursuant to which, among other things, Taylor Capital will merge
with and into MB (the “Merger”).

 

B.                                    In conjunction with the Merger Agreement,
Acquiror Bank, the wholly-owned bank subsidiary of MB, and Cole Taylor Bank, the
wholly-owned bank subsidiary of Taylor Capital (“Cole Taylor Bank”), entered
into that certain Bank Merger Agreement, dated as of July 14, 2013, pursuant to
which, among other things, Cole Taylor Bank will merge with and into Acquiror
Bank immediately following the consummation of the Merger.

 

C.                                    As a result of the Merger and at the time
of the consummation thereof, among other things, each outstanding share of
common stock, $0.01 par value per share, of Taylor Capital and each outstanding
share of Nonvoting Convertible Preferred Stock, $0.01 par value per share, of
Taylor Capital will be cancelled and converted solely into the right to receive
from MB $4.08 in cash and 0.64318 shares of common stock, $0.01 par value per
share, of MB (the “Base Merger Consideration”), pursuant to the terms set forth
in the Merger Agreement.

 

D.                                    The Principal Stockholders and MB
previously entered into a letter agreement, dated as of June 30, 2014 (the
“Letter Agreement”), pursuant to which an escrow account will be created and
funded with a portion of the Cash Merger Consideration to which the Principal
Stockholders are otherwise entitled to receive pursuant to the terms of the
Merger Agreement, in an amount equal to the Aggregate Escrow Obligation, and to
be held and distributed by Escrow Agent in accordance with the terms of this
Agreement.

 

E.                                    The Principal Stockholders, Prairie
Capital IV, L.P., Prairie Capital IV QP, L.P. and Representative (as defined
below) have entered into an agreement (the “Stockholder Agreement”) among
themselves, of even date herewith, appointing Jennifer W. Steans as their
designated representative with respect to the transactions contemplated by this
Agreement (the “Representative”).

 

F.                                     The Principal Stockholders, Prairie
Capital IV, L.P., Prairie Capital IV QP, L.P., MB and Acquiror Bank have entered
into a supplemental agreement (the “Supplement”) with respect to certain
additional matters relating to those addressed in this Agreement and the Letter
Agreement.

 

AGREEMENTS

 

In consideration of the foregoing premises, which are incorporated herein by
reference, and the mutual promises, covenants and agreements hereinafter set
forth, the parties hereto hereby agree as follows:

 

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Section 1.                                          Definitions.  In addition to
those terms defined throughout this Agreement, the following terms when used
herein, shall have the following meanings:

 

(a)                     “Aggregate Escrow Obligation” shall mean, as of the date
hereof, Fifteen Million Two Hundred and Two Thousand and Eight Hundred Dollars
($15,202,800).

 

(b)                     “Business Day” shall mean any day except Saturday,
Sunday and any day on which Escrow Agent is authorized or required by law or
other government action to close.

 

(c)                      “Cash Merger Consideration” shall mean, with respect to
each Principal Stockholder, the aggregate cash portion of the Base Merger
Consideration which such Principal Stockholder is entitled to receive upon
consummation of the Merger.

 

(d)                     “Consent Order” shall mean that certain Order to Cease
and Desist and Order of Assessment of a Civil Money Penalty Issued upon Consent
Pursuant to the Federal Deposit Insurance Act, as Amended, and the Illinois
Banking Act, as Amended, dated as of June 26, 2014, by and between Cole Taylor
Bank, the Federal Reserve and the Illinois Department of Financial and
Professional Regulation, Division of Banking.

 

(e)                      “Effective Time” shall mean that date and time when the
Merger becomes effective, as set forth in the certificate of merger to be filed
with the Secretary of State of the State of Delaware and the articles of merger
to be filed with the Department of Assessments and Taxation of the State of
Maryland, all in conjunction with the Merger.

 

(f)                       “Escrowed Funds” shall mean the aggregate amount held
in the Escrow Account at any given time.

 

(g)                      “Escrow Income” shall mean all interest, dividends,
income, capital gains and other amounts earned on the Escrowed Funds or derived
therefrom.

 

(h)                     “Federal Reserve” means the Board of Governors of the
Federal Reserve System.

 

(i)                         “Restitution Payment” shall mean any depositor
restitution ordered or requested by the Federal Reserve to be paid, and actually
paid, pursuant to the Consent Order by:  (i) Cole Taylor Bank at or prior to the
Effective Time; or (ii) Acquiror Bank, as successor to Cole Taylor Bank, at any
time following the Effective Time.

 

(j)                        “Restitution Request” shall mean a written order or
request by the Federal Reserve to make a Restitution Payment.

 

Section 2.                                          Escrow Deposit.

 

(a)                     Promptly following receipt by Representative from any
Principal Stockholder or MB of any cash or other immediately available funds
intended to satisfy any Principal Stockholder’s Individual Escrow Obligation,
Representative shall deposit such funds into the Escrow Account (as defined
below).  MB, Acquiror Bank or Representative may, from time to time after the
initial deposit of the Aggregate Escrow Obligation, deposit additional sums into
the Escrow Account, which such sums shall also be considered to be Escrowed
Funds.  Promptly following the receipt of any funds for deposit into the Escrow
Account, Escrow Agent shall provide written acknowledgement of such receipt to
Acquiror Bank and Representative in accordance with Section 17.

 

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(b)                     All Escrowed Funds will be disbursed pursuant to the
terms of this Agreement.  Escrow Agent agrees to hold the Escrowed Funds in a
separate and distinct account, in the name of The Northern Trust Company, as
Escrow Agent (the “Escrow Account”), subject to the terms and conditions of this
Agreement.  The Escrow Account shall be held as a trust fund and shall not be
subject to any lien, attachment, trustee process or any other judicial process
of any creditor of any party hereto.  Escrow Agent shall not distribute or
release any Escrowed Funds except in accordance with the express terms and
conditions of this Agreement.

 

Section 3.                                          Investment of Escrow
Account.

 

(a)                     Escrow Agent shall invest the Escrowed Funds in the
Escrow Account pursuant to the written instructions of Representative; provided,
however, that such investments shall be limited to the following:  (i) direct
obligations of the U.S. government and its agencies having maturities of
ninety (90) days or less; (ii) money market deposit accounts with U.S. banks,
which may include Escrow Agent or its affiliates, as applicable, whose
short-term debt ratings are not less than A-1/P-1; (iii) money market mutual
funds that invest solely in direct obligations of the U.S. government and its
agencies; (iv) commercial or finance paper that is not rated less than A-1/P-1;
and (v) any mutual fund, exchange traded fund, exchange traded note, or similar
pooled investment vehicle which invests in any of the foregoing.  In the absence
of written instructions to the contrary, funds will be invested in a money
market mutual fund as designated on Exhibit B.  The rights and responsibility of
the parties with respect to the investment of the Escrowed Funds are set forth
on Exhibit B attached hereto and incorporated herein by reference.

 

(b)                     Escrow Agent is hereby authorized to execute purchases
and sales of investments through the facilities of its own trading or capital
markets operations or those of any affiliated entity.  Escrow Agent or any of
its affiliates may receive compensation with respect to any investment directed
hereunder, including charging an agency fee in connection with each
transaction.  The parties recognize and agree that Escrow Agent will not provide
supervision, recommendations or advice relating to either the investment of
moneys held in the Escrow Account or the purchase, sale, retention or other
disposition of any investment described herein.  Escrow Agent shall have the
right to liquidate any investments held, regardless of whether such investments
have matured pursuant to their terms, to provide funds necessary to make
required disbursements under this Agreement.  Escrow Agent shall not have any
liability for any loss sustained as a result of any investment made pursuant to
the terms of this Agreement or as a result of any liquidation of an investment
prior to its maturity or for the failure of the parties to give Escrow Agent
instructions to invest or reinvest the Escrowed Funds.  Any loss or expense
incurred by Escrow Agent as a result of an investment shall be paid to Escrow
Agent in accordance with Sections 13 and 14.

 

Section 4.                                          Release of Escrowed Funds. 
The Escrowed Funds held pursuant to this Agreement are intended to provide a
source of funds to compensate Acquiror Bank for any Restitution Payments. 
Escrow Agent shall release funds from the Escrow Account only as follows:

 

(a)                     without need for further instruction, on the third (3rd)
Business Day following receipt of a written certificate, in the form attached
hereto as Exhibit C (a “Claim Certificate”), signed by an authorized officer of
Acquiror Bank stating, under oath:  (i) that Acquiror Bank is entitled to
receive the amount of Escrowed Funds stated in the Claim Certificate, pursuant
to the terms of the Letter Agreement, the Supplement and this Agreement;
(ii) the amount of the applicable Restitution Payment; (iii) the amount of the
Escrowed Funds sought; (iv) that a true and accurate copy of the applicable
Restitution Request is attached to such Claim Certificate; and (v) that Acquiror
Bank has delivered a copy of such Claim Certificate (including a copy of the
applicable Restitution Request) to Representative and the date on which such
copy was delivered;

 

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(b)                     on the joint written instructions of Acquiror Bank and
Representative;

 

(c)                      without need for instruction, pursuant to Section 5;
and

 

(d)                     pursuant to Section 7.

 

Section 5.                                          Distribution of Escrow
Income.  During the term of this Agreement, Escrow Agent shall distribute to
Representative all Escrow Income, if any, at the end of each calendar quarter,
and also on the Business Day next following the Termination Date (if
applicable).

 

Section 6.                                          Account Statements.  On or
before the fifteenth (15th) Business Day following each month during the term of
this Agreement, Escrow Agent shall deliver account statements to Acquiror Bank
and Representative with respect to the Escrow Account for the prior month, which
statements shall include the account balance, a summary of disbursements made
and Escrow Income earned during the preceding month.

 

Section 7.                                          Termination of Escrow
Account.  If, as of 11:59 p.m., Central Time, on the fourth (4th) anniversary of
the date hereof (the “Termination Date”), no Claim Certificate received by
Escrow Agent prior to such time remains in whole or in part unsatisfied, Escrow
Agent shall deliver to Representative all of the remaining Escrowed Funds.  If,
as of 11:59 p.m., Central Time, on the Termination Date, any Claim Certificate
received by Escrow Agent prior to such time remains in whole or in part
unsatisfied and Escrow Agent still holds any Escrowed Funds, Escrow Agent shall
retain in the Escrow Account an amount equal to the aggregate dollar amount of
such Claim Certificate(s) which has not been satisfied (the “Unpaid Claim”)
until provided with joint written instructions from Acquiror Bank and
Representative with respect to the payment of such amount, and the amount of
Escrowed Funds in excess of the Unpaid Claim shall be delivered to the
Representative, provided, however, that if the amount of Escrowed Funds
remaining is less than the Unpaid Amount, all remaining Escrowed Funds shall be
retained by Escrow Agent.  If, on the sixtieth (60th) day following the
Termination Date, Escrow Agent has not received joint written instructions from
Acquiror Bank and Representative in accordance with the preceding sentence,
Escrow Agent may take such actions with respect to any remaining Escrowed Funds
as are permitted by Section 9(ii) hereof with respect to disputed funds.

 

Section 8.                                          Liability of Escrow Agent.

 

(a)                     Escrow Agent undertakes to perform only such duties as
are expressly set forth herein and no duties shall be implied.  Escrow Agent has
no fiduciary or discretionary duties of any kind under this Agreement. Escrow
Agent shall have no liability under and no duty to inquire as to the provisions
of any agreement other than this Agreement.  Escrow Agent shall not be liable
for any action taken or omitted by it in good faith except to the extent that a
court of competent jurisdiction determines that Escrow Agent’s gross negligence
or willful misconduct was the cause of any loss.  Escrow Agent’s sole
responsibility shall be for the safekeeping and release of the Escrowed Funds in
accordance with the terms of this Agreement.  Escrow Agent shall not be charged
with knowledge or notice of any fact or circumstance not specifically set forth
herein.  Escrow Agent may rely upon any notice, instruction, request or other
instrument, not only as to its due execution, validity and effectiveness, but
also as to the truth and accuracy of any information contained therein, which
Escrow Agent shall believe to be genuine and to have been signed or presented by
the person or parties purporting to sign the same.  In no event shall Escrow
Agent be liable for incidental, indirect, special, consequential or punitive
damages (including but not limited to lost profits), even if Escrow Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action. Escrow Agent shall not be responsible for delays or failures in
performance resulting from acts beyond its control, including without limitation
acts of God, strikes, lockouts, riots, acts of war or terror, epidemics,
governmental regulations, fire, communication

 

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line failures, computer viruses, power failures, earthquakes or other disasters.
Escrow Agent shall not be obligated to take any legal action or commence any
proceeding in connection with the Escrowed Funds, any account in which Escrowed
Funds are deposited, this Agreement or under the Letter Agreement, the
Supplement or the Stockholder Agreement, or to appear in, prosecute or defend
any such legal action or proceeding.  Escrow Agent shall not be responsible or
liable in any manner for the performance by any party of their respective
obligations under the Letter Agreement, the Supplement or the Stockholder
Agreement nor shall Escrow Agent be responsible or liable in any manner for the
failure of any party to honor any of the provisions of this Agreement.  Escrow
Agent may consult legal counsel selected by it in the event of any dispute or
question as to the construction of any of the provisions hereof or of any other
agreement or of its duties hereunder, or relating to any dispute involving any
party hereto, and shall incur no liability and shall be fully indemnified from
any liability whatsoever in acting in accordance with the opinion or instruction
of such counsel.  Acquiror Bank and Representative, jointly and severally, shall
promptly pay, upon demand, the reasonable fees and expenses of any such counsel.
The parties hereto agree to perform or procure the performance of all further
acts and things, and execute and deliver such further documents, as may be
required by law or as Escrow Agent may reasonably request in connection with its
duties hereunder.

 

(b)                     Escrow Agent is authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrowed Funds, without determination by Escrow Agent of such court’s
jurisdiction in the matter.  If any portion of the Escrowed Funds is at any time
attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order, or in case any order, judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree which it is advised by legal counsel selected by it is binding upon it
without the need for appeal or other action; and if Escrow Agent complies with
any such order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person or entity by reason of such compliance
even though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.

 

Section 9.                                          Suspension of Performance;
Disbursement into Court.  If, at any time: (a) any dispute exists between or
among Acquiror Bank, any Principal Stockholder or Representative with respect to
the holding or disposition of all or any portion of the Escrowed Funds or any
other obligations of Escrow Agent hereunder; (b) Escrow Agent is unable to
determine, to Escrow Agent’s sole satisfaction, the proper disposition of all or
any portion of the Escrowed Funds or Escrow Agent’s proper actions with respect
to its obligations hereunder; or (c) Acquiror Bank and Representative have not
within thirty (30) days of the furnishing by Escrow Agent of a notice of
resignation pursuant to Section 10 hereof, appointed a successor Escrow Agent to
act hereunder, then Escrow Agent may, in its sole discretion, take either or
both of the following actions:

 

(i)                         suspend the performance of any of its obligations
(including without limitation any disbursement obligations) under this Agreement
until such matter shall be resolved to the sole satisfaction of Escrow Agent or
until a successor Escrow Agent shall have been appointed (as the case may be);
or

 

(ii)                      petition (by means of an interpleader action or any
other appropriate method) any court of competent jurisdiction in any venue
convenient to Escrow Agent, for instructions with respect to such matter and, to
the extent required or permitted by law, pay into such court, for holding and
disposition in accordance with the instructions of such court, the relevant
portion of the Escrowed Funds, after deduction and payment to Escrow Agent of
all fees and expenses (including court costs and

 

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reasonable attorneys’ fees) payable to or incurred by Escrow Agent in connection
with the performance of its duties and the exercise of its rights hereunder.

 

Escrow Agent shall have no liability to Acquiror Bank, Representative or any
Principal Stockholder or their respective stockholders or members or any other
person with respect to any such suspension of performance or disbursement into
court, specifically including any liability or claimed liability that may arise,
or be alleged to have arisen, out of or as a result of any delay in the
disbursement of the Escrowed Funds or any delay in or with respect to any other
action required or requested of Escrow Agent.

 

Section 10.                                   Resignation and Removal of Escrow
Agent.

 

(a)                     Escrow Agent reserves the right to resign at any time by
giving thirty (30) days’ written notice of resignation to Acquiror Bank and
Representative and specifying the effective date thereof.  On the effective date
of such resignation, Escrow Agent shall deliver this Agreement together with the
Escrowed Funds and any and all related instruments or documents to any successor
escrow agent reasonably agreeable to Acquiror Bank and Representative.  If a
successor escrow agent has not been appointed and has not accepted such
appointment prior to the expiration of thirty (30) days following the date of
the notice of such resignation, Escrow Agent may, but shall not be obligated to,
apply to a court of competent jurisdiction for the appointment of a successor
escrow agent.  Any such resulting appointment shall be binding upon all of the
parties to this Agreement.  Notwithstanding anything to the contrary in the
foregoing, Escrow Agent or any successor escrow agent shall continue to act as
Escrow Agent until a successor is appointed and qualified to act as Escrow
Agent.  For the avoidance of doubt, Escrow Agent shall be indemnified for all
costs and expenses relating to any legal action required herein in the manner
provided for in Sections 13 and 14.

 

(b)                     Escrow Agent may only be removed (with or without cause)
and a new escrow agent appointed upon the agreement of Acquiror Bank and
Representative.  In such event, Acquiror Bank and Representative shall deliver
joint written notice to Escrow Agent of such removal together with joint written
instructions authorizing delivery of this Agreement together with the Escrowed
Funds and any and all related instruments or documents to a successor escrow
agent.

 

(c)                      Upon delivery of the Escrowed Funds to a successor
escrow agent in accordance with this Section 10, Escrow Agent shall thereafter
be discharged from any further obligations hereunder.  All power, authority,
duties and obligations of Escrow Agent shall apply to any successor escrow
agent.

 

Section 11.                                   Taxes.

 

(a)                     As soon as practicable after December 31 of each
calendar year, Escrow Agent shall report to Representative the amount of all
income, gains and losses realized during such calendar year with respect to the
Escrowed Funds.  For the elimination of any doubt, all such income, gains and
losses shall be for the account of Representative, as agent for the Principal
Stockholders, and no portion thereof will be for the account of Acquiror Bank.

 

(b)                     Prior to the date hereof, Acquiror Bank and
Representative shall provide Escrow Agent with such properly completed and
signed tax forms and documents as Escrow Agent may reasonably request.

 

(c)                      Escrow Agent shall be entitled to deduct and withhold
from any amount distributed or released from the Escrow Account to the
Representative all taxes which may be required to be deducted or withheld under
any provision of applicable tax law.  All such withheld amounts shall be

 

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treated as having been delivered to the party entitled to the amount distributed
or released in respect of which such tax has been deducted or withheld.

 

Section 12.                                   Business Days.  If any date on
which Escrow Agent is required to make an investment or a delivery pursuant to
the provisions hereof is not a Business Day, then Escrow Agent shall make such
investment or delivery on the next succeeding Business Day.

 

Section 13.                                   Escrow Expenses.  Except as
otherwise provided in this Agreement, Acquiror Bank shall be responsible for:
(a) Escrow Agent’s reasonable attorneys’ fees incurred in conjunction with the
preparation and negotiation of this Agreement; and (b) all costs relating to the
compensation (as payment in full) of Escrow Agent for its services under this
Agreement, payable in accordance with the fee schedule attached hereto as
Exhibit D.

 

Section 14.                                   Indemnification

 

(a)                     From and at all times after the date of this Agreement,
Acquiror Bank and Representative shall, jointly and severally to the fullest
extent permitted by law, indemnify and hold harmless Escrow Agent and each
director, officer, employee, attorney, agent and affiliate of Escrow Agent
(each, an “Indemnified Party”) against any and all actions, claims (whether or
not valid), losses, damages, liabilities, costs and expenses of any kind or
nature whatsoever (including without limitation reasonable attorneys’ fees,
costs and expenses) (the “Damages”) incurred by or asserted against any
Indemnified Party from and after the date hereof, whether direct, indirect or
consequential, as a result of or arising from or in any way relating to any
claim, demand, suit, action or proceeding (including any inquiry or
investigation) by any person, including without limitation any Principal
Stockholder, whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any person under any statute or regulation, including,
but not limited to, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Agreement or any transactions contemplated thereby, whether or not any such
Indemnified Party is a party to any such action, proceeding, suit or the target
of any such inquiry or investigation; provided, however, that neither Acquiror
Bank nor Representative shall have any indemnification obligation hereunder to
the extent that a court of competent jurisdiction determines that any such
Damages were caused by the gross negligence or willful misconduct of Escrow
Agent or any other Indemnified Party. Each Indemnified Party shall, in its sole
discretion, have the right to select and employ separate counsel with respect to
any action or claim brought or asserted against it, and the reasonable fees of
such counsel shall be paid upon demand by Acquiror Bank and Representative in
accordance with this Section 14; provided, however, that in no event shall
Acquiror Bank or Representative be liable for fees of more than one counsel
separate from their own counsel for all Indemnified Parties in connection with
any one action or separate but similar or related actions arising out of the
same general allegations or circumstances.

 

(b)                     The obligations of Representative and Acquiror Bank
under this Section 14 shall survive any termination of this Agreement and the
resignation or removal of Escrow Agent.

 

Section 15.                                   Security and Offset. 
Representative and Acquiror Bank hereby grant to Escrow Agent and the
Indemnified Parties a security interest in and lien upon the Escrowed Funds to
secure all obligations hereunder, and Escrow Agent and the Indemnified Parties
shall have the right to offset the amount of any compensation or reimbursement
due any of them hereunder (including any claim for indemnification hereunder)
against the Escrowed Funds.

 

Section 16.                                   Disbursements from Escrowed Funds
to Pay Escrow Agent.  If any compensation or reimbursement of out-of-pocket
expenses are not paid when due, then Escrow Agent is

 

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authorized to, and may, disburse to itself from time to time, the amount of any
compensation and reimbursement of out-of-pocket expenses due and payable
hereunder (including any amount to which Escrow Agent is entitled to seek
indemnification hereunder).  Escrow Agent shall notify Acquiror Bank and
Representative prior to any disbursement to itself in respect of any
compensation or reimbursement hereunder and shall furnish to Representative and
Acquiror Bank copies of all related invoices and other statements.

 

Section 17.                                   Notices.  All notices, requests,
consents, claims, demands, waivers and other communications hereunder shall be
in writing and shall be deemed to have been given:  (a) when delivered by hand
(with written confirmation of receipt); (b) when received by the addressee if
sent by a nationally recognized overnight courier (receipt requested); (c) on
the date sent by facsimile or e-mail of a portable data file (“PDF”) document
(with confirmation of transmission) if sent during normal business hours of the
recipient, and on the next Business Day if sent after normal business hours of
the recipient; or (d) on the fifth (5th) day after the date mailed, by certified
or registered mail, return receipt requested, postage prepaid.  Such
communications must be sent to the respective parties at the addresses indicated
below (or at such other address for a party as shall be specified in a notice
given in accordance with this Section; provided, that no change in address shall
be effective until seven (7) days after being given to the other party in the
manner provided for herein):

 

If to Acquiror Bank, to:

 

MB Financial Bank, N.A.

6111 North River Road

Rosemont, Illinois 60018

Attention:                 Jill E. York

Telephone:           (847) 653-1991

Facsimile:                 (847) 653-0018

Electronic mail:                       jyork@mbfinancial.com

 

with a copy to:

 

Silver, Freedman, Taff & Tiernan LLP

3299 K Street, Northwest, Suite 100

Washington, District of Columbia 20007

Attention:                 Barry P. Taff

Telephone:           (202) 295-4503

Facsimile:                 (202) 337-5502

Electronic mail:                       btaff@sftlaw.com

 

If to Representative, to:

 

Jennifer W. Steans

c/o Financial Investments Corporation

50 East Washington Street, Suite 400

Chicago, Illinois 60602

Telephone:           (312) 494-4513

Facsimile:                 (312) 494-1494

Electronic mail:                       jsteans@fic-cep.com

 

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with a copy to:

 

Barack Ferrazzano Kirschbaum & Nagelberg LLP

200 West Madison Street, Suite 3900

Chicago, Illinois 60606

Attention:                 Dennis R. Wendte

Telephone:           (312) 984-3188

Facsimile:                 (312) 984-3150

Electronic mail:                       dennis.wendte@bfkn.com

 

If to Escrow Agent, to:

 

The Northern Trust Company

50 S. LaSalle Street

Chicago, Illinois 60603

Attention:                 Susan K. Hedlund

Telephone:           (312) 444-5713

Facsimile:                 (312) 431-4032

Electronic mail:                       sk99@ntrs.com

 

Section 18.                                   Entire Agreement.  This Agreement,
together with the Letter Agreement and the Supplement, constitutes the sole and
entire agreement of the parties to this Agreement with respect to the subject
matter contained herein, and supersedes all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such
subject matter.  Notwithstanding the foregoing, in the event of any
inconsistency between the statements in the body of this Agreement and those of
the Letter Agreement or the Supplement:  (a) with respect to any inconsistency
as between Acquiror Bank and any Principal Stockholder, the Letter Agreement or
Supplement, as applicable, shall control; and (b) with respect to any
inconsistency as between Escrow Agent, on the one hand, and either Acquiror Bank
or Representative or both, on the other hand, this Agreement shall control.

 

Section 19.                                   Successor and Assigns.

 

(a)                     This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.  No party may assign any of its rights or obligations hereunder without
the prior written consent of the other parties hereto, which consent shall not
be unreasonably withheld or delayed; provided, however, that in the event that
Representative is unwilling or unable to serve, a successor Representative may
be appointed pursuant to the Stockholder Agreement, without consent of Escrow
Agent notice of which such appointment shall be provided to Escrow Agent
pursuant to Section 17 hereof.  No assignment shall relieve the assigning party
of any of its obligations hereunder.

 

(b)                     Any corporation or association into which Escrow Agent
may be converted or merged, or with which it may be consolidated, or to which it
may sell or transfer its escrow business and assets as a whole or substantially
as a whole, or any corporation or association resulting from any such
conversion, sale, merger, consolidation or transfer to which it is a party,
shall be and become the successor escrow agent hereunder and be vested with all
of the title to the whole property or trust estate and all of the trusts,
powers, immunities, privileges, protections and all other matters as was its
predecessor, without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

 

9

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Section 20.                                   No Third-Party Beneficiaries. 
This Agreement is for the sole benefit of the parties hereto and their
respective successors and permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

Section 21.                                   Principles of Construction.  In
this Agreement, unless otherwise stated or the context otherwise requires, the
following uses apply:  (a) actions permitted under this Agreement may be taken
at any time and from time to time in the actor’s reasonable discretion;
(b) references to a statute shall refer to the statute and any successor
statute, and to all regulations promulgated under or implementing the statute or
its successor, as in effect at the relevant time; (c) in computing periods from
a specified date to a later specified date, the words “from” and “commencing on”
(and the like) mean “from and including,” and the words “to,” “until” and
“ending on” (and the like) mean “to, but excluding”; (d) references to a
governmental or quasi-governmental agency, authority or instrumentality shall
also refer to a regulatory body that succeeds to the functions of the agency,
authority or instrumentality; (e) indications of time of day mean
Chicago, Illinois time; (f) “including” means “including, but not limited to”;
(g) all references to sections, schedules and exhibits are to sections,
schedules and exhibits in or to this Agreement unless otherwise specified, and
all schedules and exhibits are incorporated into this Agreement by such
reference; (h) all words used in this Agreement will be construed to be of such
gender or number as the circumstances and context require; (i) the captions and
headings of articles, sections, schedules and exhibits appearing in or attached
to this Agreement have been inserted solely for convenience of reference and
shall not be considered a part of this Agreement nor shall any of them affect
the meaning or interpretation of this Agreement or any of its provisions; and
(j) any reference to a document or set of documents in this Agreement, and the
rights and obligations of the parties under any such documents, shall mean such
document or documents as amended from time to time, and any and all
modifications, extensions, renewals, substitutions or replacements thereof.

 

Section 22.                                   Amendment and Modification;
Waiver.  This Agreement may only be amended, modified or supplemented by an
agreement in writing signed by each party hereto.  No waiver by any party of any
of the provisions hereof shall be effective unless explicitly set forth in
writing and signed by the party so waiving.  Except as otherwise set forth in
this Agreement, no failure to exercise, or delay in exercising, any rights,
remedy, power or privilege arising from this Agreement shall operate or be
construed as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 23.                                   Severability.  If any term or
provision of this Agreement is invalid, illegal or unenforceable in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction.  Upon such
determination that any term or other provision is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.

 

Section 24.                                   Governing Law.  All questions
concerning the construction, validity and interpretation of this Agreement, and
the performance of the obligations imposed by this Agreement shall be governed
by the internal laws of the State of Illinois applicable to contracts made and
wholly to be performed in such state without regard to conflicts of laws.

 

Section 25.                                   Jurisdiction and Service of
Process.  Any action or proceeding seeking to enforce, challenge or avoid any
provision of, or based on any right arising out of, this Agreement shall be

 

10

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brought only in the courts of the State of Illinois, County of Cook or, if it
has or can acquire jurisdiction, in the United States District Court serving the
County of Cook, and each of the parties consents to the exclusive jurisdiction
of such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to jurisdiction or venue laid therein. 
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.

 

Section 26.                                   Waiver of Jury Trial.  EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
CONTEMPLATED TRANSACTIONS.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT:  (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER; (B) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY; AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS OF THIS
SECTION 26.

 

Section 27.                                   Identifying Information.  To help
the government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. For a
non-individual person such as a business entity, a charity, a trust, or other
legal entity, Escrow Agent requires documentation to verify its formation and
existence as a legal entity. Escrow Agent may ask to see financial statements,
licenses, identification and authorization documents from individuals claiming
authority to represent the entity or other relevant documentation.  The parties
acknowledge that a portion of the identifying information set forth herein is
being requested by Escrow Agent in connection with the USA Patriot Act,
Pub.L.107-56 (the “Act”), and each agrees to provide any additional information
requested by Escrow Agent in connection with the Act or any other legislation or
regulation to which Escrow Agent is subject, in a timely manner.

 

Section 28.                                   Cooperation.  Acquiror Bank and
Representative agree to exercise good faith and use their best efforts to
satisfy the various agreements and conditions in this Agreement.  During the
term of this Agreement, Acquiror Bank and Representative will, and will cause
all of their respective affiliates and representatives to, cooperate with Escrow
Agent in respect to the fulfillment of Escrow Agent’s duties and obligations
hereunder, including the execution of any forms and documents as Escrow Agent
may reasonably request.

 

Section 29.                                   Counterparts; Facsimile/PDF
Signatures.  This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.  This Agreement may be executed and accepted by facsimile or
PDF signature and any such signature shall be of the same force and effect as an
original signature.

 

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused
this Agreement to be executed by their respective officers or representatives,
as of the day and year first written above.

 

 

 

 

MB FINANCIAL BANK, N.A.

 

THE NORTHERN TRUST COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Jill E. York

 

By:

/s/ Thomas C. Iskalis

Name: Jill E. York

 

Name: Thomas C. Iskalis

Title: Executive Vice President and Chief Financial Officer

 

Title: Regional Chief Fiduciary Officer

 

 

 

 

 

 

REPRESENTATIVE

 

 

 

 

 

 

 

 

/s/ Jennifer W. Steans

 

 

Jennifer W. Steans

 

 

 

[Signature Page to Escrow Agreement]

 

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EXHIBIT A

 

PRINCIPAL STOCKHOLDERS

 

Financial Investments Corporation Investors

 

Harrison I. Steans

Jennifer W. Steans

James P. Kastenholz

Jennifer W. Steans, as Custodian for Nicholas J. Kastenholz

Jennifer W. Steans 1999 Descendants Trust

Heather A. Steans 1999 Descendants Trust

Robin M. Steans

Leonard A. Gail

Robin M. Steans 1999 Descendants Trust

Steans 1996 Family Trust

PCB Limited Partnership

Trilogy Investment Group, LLC

 

Adeline S. Morrison

Harold M. Morrison

Helen H. Morrison

Helen H. Morrison IRA

Lois L. Morrison

Lois L. Morrison IRA

Justin W. Daab

Charles E. Brinley

Margot M. Brinley

Amy M. Heinrich

Foursquare Investments, LLC

Harold M. and Adeline S. Morrison Family Foundation

 

Thomas B. Hunter III

Thomas B. Hunter IV

Tscharner DeGraffenried Hunter

Thomas Ruffin Hunter

Willard M. Hunter

Benjamin J. Hunter

Willard M. Hunter, as Custodian for Willard K. Hunter

Peter M. Hunter

Maxine M. Hunter Charitable Lead Annuity Trust

Hunter Family Foundation

 

George P. Bauer Revocable Trust

 

A-1

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Taylor Family Investors

 

Jeffrey W. Taylor IRA

Jeffrey W. Taylor Revocable Trust U/A/D 8/20/79

Jeffrey W. Taylor Gift Trust U/A/D 6/10/82

GGC Trust for Brian Taylor U/A/D 12/1/08

Taylor Annual Gift Trust for Brian U/A/D 12/14/82

Taylor 1992 Gift Trust for Brian U/A/D 12/17/92

GGC Trust for Adam Taylor U/A/D 12/1/08Taylor 1992 Gift Trust for Adam U/A/D
12/17/92

Taylor Annual Gift Trust for Lisa Rebecca U/A/D 7/10/83

 

Bruce W. Taylor IRA

Bruce W. Taylor Revocable Trust U/A/D 4/10/84

Bruce W. Taylor Gift Trust U/A/D 6/10/82

Bruce Taylor and Barbara Taylor, joint tenants

 

Cindy L. Taylor Robinson

Cindy L. Taylor Robinson Revocable Trust U/A/D 3/7/94

Cindy L. Taylor Gift Trust U/A/D 6/10/82

 

Taylor Voting Trust U/A/D 11/30/98

 

A-2

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EXHIBIT C

 

FORM OF CLAIM CERTIFICATE

 

The undersigned,                                                   , hereby
certifies that [he][she] is the                                             , of
MB Financial Bank, N.A., a national banking association with its main office
located in Chicago, Illinois (the “Bank”), and reference is made to that certain
Escrow Agreement, dated August 15, 2014, among the Bank, Jennifer W. Steans, as
representative of the Taylor Capital Group, Inc. stockholders set forth on
Exhibit A thereto, and The Northern Trust Company, as escrow agent (the “Escrow
Agreement”).  Capitalized terms used but not defined herein have the meanings
assigned to them in the Escrow Agreement.  Pursuant to the requirements of
Section 4(a) of the Escrow Agreement, the undersigned hereby states, under oath,
that:

 

1.                          The Bank is entitled to receive the amount of
Escrowed Funds stated in this Claim Certificate, all pursuant to the terms of
the Letter Agreement, the Supplement, and the Escrow Agreement.

 

2.                          The amount of the applicable Restitution Payment is
$[                ].

 

3.                          The amount of funds in the Escrow Account sought to
be paid to the Bank is $[                      ].

 

4.                          A true and accurate copy of the applicable
Restitution Request is attached hereto.

 

5.                          The Bank delivered a copy of this completed Claim
Certificate (including a copy of the applicable Restitution Request) to
Representative on [                            ].

 

IN WITNESS WHEREOF, the undersigned has executed this Claim Certificate as of
this        day of                               ,             .

 

 

 

 

Signature

 

 

 

 

 

Printed Name

 

 

STATE OF ILLINOIS

)

 

 

 

)

SS.

 

COUNTY OF COOK

)

 

 

 

I, the undersigned, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that                                             ,
the                              of MB Financial Bank, N.A., a national banking
association with its main office located in Chicago, Illinois, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person, and acknowledged that he/she
signed, sealed and delivered the foregoing instrument as his/her own free and
voluntary act, on behalf of said corporation, and for the uses and purposes
therein set forth.

 

Given under my hand and official seal, this        day of
                        ,             .

 

My commission expires:

 

 

 

 

 

 

 

 

 

 

Notary Public

 

C-1

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