Exhibit 10.1

 

TAYLOR CAPITAL GROUP, INC.

 

(a Delaware corporation)

 

1,500,000 Shares of Common Stock

 

(Par Value $.01 Per Share)

 

UNDERWRITING AGREEMENT

 

August 11, 2005

 

KEEFE, BRUYETTE & WOODS, INC.

STIFEL, NICOLAUS & COMPANY, INCORPORATED

RYAN BECK & CO., INC.

as Representatives of the several Underwriters

c/o Keefe, Bruyette & Woods, Inc.

4th Floor

787 Seventh Avenue

New York, New York 10019

 

Ladies and Gentlemen:

 

Taylor Capital Group, Inc., a Delaware corporation (the “Company”), and the
certain shareholder named in Schedule B hereto (the “Selling Shareholder”),
confirm their respective agreements with Keefe, Bruyette & Woods, Inc. (“Keefe
Bruyette”), Stifel, Nicolaus & Company, Incorporated (“Stifel, Nicolaus”), Ryan
Beck & Co., Inc. (“Ryan Beck”) and each of the other Underwriters named in
Schedule A hereto (collectively, the “Underwriters,” which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Keefe Bruyette, Stifel, Nicolaus and Ryan Beck are acting as
representatives (in such capacity, the “Representatives”), with respect to (i)
the sale by the Company and the Selling Shareholder, acting severally and not
jointly, and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of the 1,500,000 shares of Common Stock, par value
$.01 per share, of the Company (“Common Stock”) set forth in Schedules A and B
hereto and (ii) the grant by the Company to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of 150,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 1,500,000 shares of Common Stock (the
“Initial Securities”) to be purchased by the Underwriters and all or any part of
the 150,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the “Option Securities”) are hereinafter called, collectively, the
“Securities”.

 

The Company, the Selling Shareholder and the Underwriters agree that certain
shares of the Securities to be purchased by the Underwriters (the “Reserved
Securities”) shall be reserved for sale by the Underwriters to certain eligible
employees and persons having business

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relationships with the Company, as part of the distribution of the Securities by
the Underwriters, subject to the terms of this Agreement and all applicable
laws, rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of the Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.

 

The Company and the Selling Shareholder understand that the Underwriters propose
to make a public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.

 

The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (No. 333-126864) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
“1933 Act”), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
(“Rule 430A”) of the rules and regulations of the Commission under the 1933 Act
(the “1933 Act Regulations”) and paragraph (b) of Rule 424 (“Rule 424(b)”) of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as “Rule 430A
Information.” Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a “preliminary prospectus.” Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information, is herein called the “Registration Statement.” Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the “Rule 462(b) Registration Statement,” and after such filing
the term “Registration Statement” shall include the Rule 462(b) Registration
Statement. The final prospectus, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the
form first furnished to the Underwriters for use in connection with the offering
of the Securities is herein called the “Prospectus.” For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

 

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included,” “described,” “referred to” or
“stated” in the Registration Statement, any preliminary prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary

 

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prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the “1934
Act”), which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.

 

SECTION 1. Representations and Warranties.

 

(a) Representations and Warranties by the Company. The Company represents and
warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:

 

(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with. At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Prospectus,
any preliminary prospectus and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance and at
the Closing Time (except for the preliminary prospectus), complied and will
comply in all material respects with the requirements of the 1933 Act and any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that have been or will so be filed or
described, and any applicable laws or regulations of foreign jurisdictions in
which the Prospectus and such preliminary prospectus, as amended or
supplemented, if applicable, are distributed in connection with the offer and
sale of Reserved Securities. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will 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. The representations
and warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in

 

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writing by any Underwriter through Keefe Bruyette expressly for use in the
Registration Statement or Prospectus. With respect to the preceding sentence,
the Company acknowledges that the only information furnished in writing by Keefe
Bruyette on behalf of the Underwriters expressly for use in the Registration
Statement or Prospectus are the concession and reallowance figures appearing in
the Prospectus in the section entitled “Underwriting” and the information
contained under the captions “Underwriting—Stabilization” and
“Underwriting—Passive Market Making.”

 

Each preliminary prospectus and the prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

 

(ii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at
the time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations or the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”), as applicable, and, when
read together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was issued
and at the Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.

 

(iii) Independent Registered Public Accounting Firm. KPMG LLP, the accounting
firm that has certified the consolidated financial statements of the Company as
of December 31, 2004 and 2003 and for each of the years in the three year period
ended December 31, 2004 incorporated by reference in the Registration Statement
and the Prospectus, is an independent registered public accounting firm as
required by the 1933 Act and the 1933 Act Regulations. To the knowledge of the
Company, KPMG LLP is not in violation of the auditor independence requirements
of the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the
Commission.

 

(iv) Financial Statements. The financial statements included in the Registration
Statement and the Prospectus, together with the related schedules and notes,
present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly in

 

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accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. All disclosures contained in the Registration Statement
or the Prospectus regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply with Regulation G
of the 1934 Act, the 1934 Act Regulations and Item 10 of Regulation S-K under
the 1933 Act, to the extent applicable.

 

(v) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, management,
business affairs or business prospects of the Company and the Subsidiaries (as
defined herein) considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”), (B) there have been
no transactions entered into by the Company or any of the Subsidiaries, other
than those in the ordinary course of business, which are material with respect
to the Company and the Subsidiaries considered as one enterprise, (C) there has
not been any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is material to
the Company and the Subsidiaries taken as a whole, (D) there has not been any
change in the capital stock (other than the issuance of shares of Common Stock
upon exercise of stock options disclosed as outstanding in the Registration
Statement and the Prospectus and the grant of stock options under existing stock
option plans disclosed in the Registration Statement and the Prospectus) or
material increase in outstanding indebtedness of the Company or the
Subsidiaries, (E) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock, and (F)
there has not occurred any other event and there has arisen no set of
circumstances required by the 1933 Act or the 1933 Act Regulations to be
disclosed in the Registration Statement or the Prospectus which has not been so
set forth in the Registration Statement or the Prospectus as fairly and
accurately summarized therein.

 

(vi) Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware and has full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect. The Company is duly registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended (the
“BHC Act”).

 

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(vii) Good Standing of Subsidiaries. The Company currently has 10 direct and
indirect subsidiaries. They are listed on Schedule D attached hereto, which is
incorporated herein (the “Subsidiaries”). Other than the Subsidiaries, the
Company does not own or control, directly or indirectly, more than 5% of any
class of equity security of any corporation, association or other entity. Each
Subsidiary is a corporation or banking corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, has the requisite power,
corporate or otherwise, and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect; Cole Taylor Bank is duly licensed in the State of Illinois by
the Illinois Department of Financial and Professional Regulation (the “IDFPR”);
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through a Subsidiary, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary.

 

(viii) Capitalization. The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under the caption “Capitalization”
(except for subsequent issuances, if any, pursuant to this Agreement, and
subsequent issuances or purchases pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the exercise
of convertible securities or options referred to in the Prospectus). The shares
of issued and outstanding capital stock, including the Securities to be
purchased by the Underwriters from the Selling Shareholder, have been duly
authorized and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock, including the Securities to be purchased by
the Underwriters from the Selling Shareholder, was issued in violation of, or
are otherwise subject to, any preemptive or other similar rights of any
securityholder of the Company.

 

(ix) Authorization of Agreement. All necessary corporate action has been duly
and validly taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Securities by the
Company. This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.

 

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(x) Authorization and Description of Securities. The Securities to be purchased
by the Underwriters from the Company have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid and
non-assessable; the certificates evidencing the Common Stock are in due and
proper form under Delaware law; the authorized capital stock of the Company,
including the Common Stock, conforms to all statements relating thereto
contained in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar rights.
There are no outstanding subscriptions, options, warrants, convertible or
exchangeable securities or other rights granted to or by the Company to purchase
shares of Common Stock or other securities of the Company and there are no
commitments, plans or arrangements to issue any shares of Common Stock or any
security convertible into or exchangeable for Common Stock, in each case other
than as described in the Prospectus.

 

(xi) Absence of Defaults and Conflicts. Neither the Company nor any Subsidiary
is in violation of any provision of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any Subsidiary is
subject, including, without limitation, the agreements described in paragraph
(xiv) below (collectively, the “Agreements and Instruments”) except for such
defaults that have been waived or suspended as described in the Prospectus and
that would not, singly or in the aggregate, result in a Material Adverse Effect;
and the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the Registration
Statement (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under
the caption “Use of Proceeds”) and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to, any of the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company or any Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary (including the rules, regulations and requirements of the United
States Federal Reserve System (the “Federal Reserve”) and the banking laws and
regulations of the State of Illinois and the banking laws and

 

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regulations of other applicable jurisdictions) or any of their assets,
properties or operations. As used herein, a “Repayment Event” means any event or
condition which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or any Subsidiary. Each of the Agreements and Instruments is in
full force and effect and is valid and enforceable by and against the Company or
any of the Subsidiaries, as the case may be, and, to the knowledge of the
Company, the other parties thereto, in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.

 

(xii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any Subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary’s principal
suppliers or customers, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.

 

(xiii) Absence of Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which, singly or in the aggregate, might reasonably be expected to
result in a Material Adverse Effect, or which, singly or in the aggregate, might
reasonably be expected to materially and adversely affect the properties or
assets thereof or which might materially and adversely affect the consummation
of the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; all pending legal or governmental
proceedings to which the Company or any Subsidiary is a party or of which any of
their respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material.

 

(xiv) Accuracy of Material Agreements; Exhibits. There is no franchise, contract
or other document of a character required to be described in the Registration
Statement or the Prospectus, or to be filed as an exhibit to the Registration
Statement, which is not described or filed as required by the 1933 Act, the 1933
Act Regulations, the 1934 Act or the 1934 Act Regulations. Each description of a
contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects the terms of the underlying contract, document or
agreement in all material respects.

 

(xv) Possession of Intellectual Property. The Company and the Subsidiaries own
or possess, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or

 

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procedures), trademarks, service marks, trade names or other intellectual
property (collectively, “Intellectual Property”) necessary to carry on the
business now operated by them, and neither the Company nor any of the
Subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
the Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.

 

(xvi) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the consummation of
the transactions contemplated by this Agreement or the Prospectus, except (i)
such as have been already obtained or as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations or state securities
laws and (ii) such as have been obtained under the laws and regulations of
jurisdictions outside the United States in which the Reserved Securities are
offered.

 

(xvii) Possession of Licenses and Permits. The Company and the Subsidiaries
possess such certificates, authorities, permits, licenses, approvals, consents
and other authorizations (collectively, “Governmental Licenses”) issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and the
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither the
Company nor any of the Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.

 

(xviii) Compliance with Applicable Laws. Except as described in the Registration
Statement and the Prospectus, the Company and the Subsidiaries have complied and
are in compliance in all material respects with all federal, state and local
statutes, regulations, ordinances and rules as now in effect and applicable to
the ownership and operation of their properties or the conduct of their
businesses as described in the Prospectus and as currently being conducted
(including, without limitation, all regulations and orders of, or agreements
with, the Board of Governors of the Federal Reserve, the Federal Deposit
Insurance Corporation (the “FDIC”), the Office of the Comptroller of the
Currency, the IDFPR, as applicable, and the Equal Credit

 

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Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act, all other applicable fair lending laws or other laws
relating to discrimination and the Bank Secrecy Act and Title III of the Patriot
Act), except where the failure to do so would not have a Material Adverse
Effect. Neither the Company nor any Subsidiary engages, directly or indirectly,
in any activity prohibited by the Federal Reserve, the BHC Act, other federal
banking or consumer protection laws or the regulations promulgated thereunder or
the banking or consumer protection laws and regulations of the State of Illinois
and neither the Company nor any Subsidiary engages, directly or indirectly, in
any activity prohibited by the banking or consumer protection laws and
regulations of other applicable jurisdictions which would result in a Material
Adverse Effect. Except as described in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary is subject to a directive
from the FDIC, the Federal Reserve, the IDFPR or any other governmental
authority to make any material changes in the method of conducting its business
and no such directive is pending or, to the knowledge of the Company, threatened
by such authorities. Except as described in the Registration Statement and the
Prospectus, the Company and the Subsidiaries are not subject to any
cease-and-desist order, prompt correction action directive, civil money penalty,
orders of prohibition, consent order, written agreement, memorandum of
understanding, or other enforcement actions or supervisory agreements issued by
the Federal Reserve, the FDIC, the IDFPR or any other federal or state bank
regulatory agency to which the Company or any Subsidiary is subject.

 

(xix) Title to Property. The Company and the Subsidiaries have good and
marketable title to all real property owned by the Company and the Subsidiaries
and good title to all other properties owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (a) are described in the Prospectus
or (b) do not, singly or in the aggregate, materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company or any of the Subsidiaries; and all of the
leases and subleases material to the business of the Company and the
Subsidiaries, considered as one enterprise, and under which the Company or any
of the Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any Subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased premises under
any such lease or sublease.

 

(xx) Investment Company Act. The Company is not, and upon the issuance and sale
of the Securities as contemplated herein and the application of the net proceeds
therefrom as described in the Prospectus 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 “1940 Act”).

 

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(xxi) Environmental Laws. Except as described in the Registration Statement and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) neither the Company nor any of the Subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, “Hazardous
Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
“Environmental Laws”), (B) the Company and the Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of the Subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of the
Subsidiaries relating to Hazardous Materials or any Environmental Laws.

 

(xxii) Registration Rights. Except as described in the Registration Statement,
there are no persons with registration rights or other similar rights to have
any securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.

 

(xxiii) Tax Matters. The Company and each Subsidiary has filed all material tax
returns required to be filed, which returns are true and correct in all material
respects, and neither the Company nor any Subsidiary is in default in the
payment of any taxes, including penalties and interest, assessments, fees and
other charges, shown thereon due or otherwise assessed, other than those being
contested in good faith and for which adequate reserves have been provided or
those currently payable without interest which were payable pursuant to said
returns or any assessments with respect thereto.

 

(xxiv) Insurance. The Company and the Subsidiaries maintain insurance of the
types and in the amounts required by rules and regulations of the Federal
Reserve, the FDIC and the IDFPR and, to the knowledge of the Company, consistent
with insurance coverage maintained by similar companies and businesses, all of
which insurance is in full force and effect; the Company and the Subsidiaries
are insured by insurers of recognized financial responsibility; all policies of
insurance and fidelity or surety bonds insuring the Company or any of the
Subsidiaries or the Company’s or the Subsidiaries’ respective businesses,
assets, employees, officers and directors are in full

 

11

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force and effect; the Company and each of the Subsidiaries are in compliance
with the terms of such policies and instruments in all material respects; and
neither the Company nor any 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 have a Material Adverse
Effect. Neither the Company nor any Subsidiary has been denied any insurance
coverage which it has sought or for which it has applied. The deposit accounts
of Cole Taylor Bank are insured by the Bank Insurance Fund administered by the
FDIC up to the maximum amount provided by law; and no proceedings for the
modification, termination or revocation of any such insurance are pending or, to
the knowledge of the Company, threatened.

 

(xxv) Accounting Controls. The books, records and accounts of the Company and
the Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and the Subsidiaries. The Company and the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of the Company’s consolidated
financial statements in conformity with GAAP and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorizations; and (iv) the reported
accountability of the assets of the Company and the Subsidiaries is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

 

(xxvi) Disclosure Controls and Procedures. The Company has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-15 and 15d-15 under the 1934 Act); such disclosure controls and procedures
are designed to ensure that material information relating to the Company and the
Subsidiaries is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within the Company, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; the Company’s independent auditors and the Audit Committee of
the Board of Directors have been advised of: (i) any significant deficiencies
and material weaknesses in the design or operation of internal controls which
could adversely affect the Company’s ability to record, process, summarize, and
report financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company’s internal
controls; any material weaknesses in internal controls have been identified for
the Company’s auditors; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

 

(xxvii) Sarbanes-Oxley Act of 2002. There is no failure on the part of the
Company or any of the Subsidiaries or on the part of any of the Company’s or the

 

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Subsidiaries’ directors or officers, in their capacities as such, to comply in
all material respects with any applicable provision of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated by the Commission pursuant
thereto.

 

(xxviii) Management’s Assessment of Internal Controls. Based on the evaluation
of its internal control over financial reporting, the Company is in material
compliance with the applicable provisions of Section 404, entitled “Management’s
Assessment of Internal Controls,” of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated by the Commission pursuant thereto.

 

(xxix) Fees. Other than as contemplated by this Agreement and except as
disclosed in the Registration Statement, there is no broker or finder that is
entitled to receive from the Company or any Subsidiary any brokerage or finder’s
fee, commission or contingent payment as a result of the transactions
contemplated by this Agreement.

 

(xxx) No Change in Capital Adequacy. To the knowledge of the Company, no facts
or circumstances exist that would result in the Company’s applicable regulatory
ratios being below the “Well Capitalized” level, as determined under the capital
adequacy guidelines of the Federal Reserve, immediately following the
consummation of the transactions contemplated by this Agreement.

 

(xxxi) Absence of Manipulation. Neither the Company nor, to its knowledge, any
of its officers, directors or affiliates has taken, and at the Closing Date,
neither the Company nor, to its knowledge, any of its officers, directors or
affiliates will have taken, directly or indirectly, any action which has
constituted, or might reasonably be expected to constitute, the stabilization or
manipulation of the price of sale or resale of the Securities.

 

(xxxii) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act)
contained or incorporated by reference in the Registration Statement and the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.

 

(xxxiii) No Unauthorized Use Of Prospectus. The Company has not distributed and,
prior to the later to occur of (i) the Closing Time and (ii) completion of the
distribution of the Securities, will not distribute any prospectus (as such term
is defined in the 1933 Act and the 1933 Act Regulations) in connection with the
offering and sale of the Securities other than the Registration Statement, any
preliminary prospectus, the Prospectus or other materials, if any, permitted by
the 1933 Act or by the 1933 Act Regulations and approved by the Representatives.

 

(xxxiv) No Illegal Payments. To the knowledge of the Company, neither the
Company nor any Subsidiary nor any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.

 

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(xxxv) Sales of Securities. All offers and sales of capital stock of the Company
prior to the date hereof were at all relevant times duly registered or exempt
from the registration requirements of the 1933 Act and the 1933 Act Regulations
and were duly registered or subject to an available exemption from the
registration requirements of the applicable state securities or Blue Sky laws.

 

(xxxvi) Registration and Listing. The Common Stock is registered pursuant to
Section 12(g) of the 1934 Act. The Securities have been duly authorized for
quotation on The Nasdaq National Market. The Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the 1934 Act or delisting the Common Stock from The
Nasdaq National Market, nor has the Company received any notification that the
Commission or The Nasdaq National Market is contemplating terminating such
registration or listing.

 

(xxxvii) No Association with NASD. There are no affiliations with the NASD, Inc.
(“NASD”) among the Company’s officers, directors or, to the knowledge of the
Company, any 5% or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Representatives.

 

(xxxviii) Related Party Transactions. No transaction has occurred between or
among the Company and any of its officers or directors or five percent
stockholders or any affiliate or affiliates of any such officer or director or
five percent stockholders that is required to be described in and is not
described in the Registration Statement and the Prospectus.

 

(xxxix) Statistical and Market-related Data. Any statistical and market-related
data included in the Registration Statement and the Prospectus are based on or
derived from sources that the Company believes to be reliable and accurate, and
the Company has obtained the written consent to the use of such data from such
sources to the extent required.

 

(b) Representations and Warranties by the Selling Shareholder. The Selling
Shareholder represents and warrants to each Underwriter as of the date hereof
and as of the Closing Time and agrees with each Underwriter, as follows:

 

(i) Accurate Disclosure. The Selling Shareholder is not prompted to sell the
Securities to be sold by the Selling Shareholder hereunder by any information
concerning the Company or any Subsidiary of the Company which is not set forth
in the Prospectus; and all information furnished by or on behalf of the Selling
Shareholder for use in the Registration Statement and the Prospectus is, and at
the Closing Time will be, true, correct and complete in all material respects
and does not, and at the Closing Time will not, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading.

 

14

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(ii) Authorization of Agreements. The Selling Shareholder has the full right,
power and authority, and all authorization and approval required by law or the
charter and by-laws or other organizational documents of the Selling Shareholder
(if the Selling Shareholder is not a natural person) to enter into this
Agreement and a Power of Attorney and Custody Agreement (collectively, the
“Power of Attorney and Custody Agreement”) and to sell, transfer and deliver the
Securities to be sold by the Selling Shareholder hereunder or a “security
entitlement” within the meaning of Sections 8-102(a)(17) and 8-501 of the
Uniform Commercial Code of the State of New York (the “UCC”) in respect of such
Securities. The execution and delivery of this Agreement and the Power of
Attorney and Custody Agreement and the sale and delivery of the Securities to be
sold by the Selling Shareholder and the consummation of the transactions
contemplated herein and under the Power of Attorney and Custody Agreement and
compliance by the Selling Shareholder with its obligations hereunder and under
Power of Attorney and Custody Agreement have been duly authorized by the Selling
Shareholder and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Securities to be sold by the Selling Shareholder or any
property or assets of the Selling Shareholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder may be bound, or to which any of the
property or assets of the Selling Shareholder is subject, nor will such action
result in any violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Shareholder or any of its
properties.

 

(iii) Title to Securities; Protected Purchaser. The Selling Shareholder has, and
on the Closing Date will have, valid title to, or a valid security entitlement
in respect of, the Securities to be sold by such Selling Shareholder, free and
clear of all security interests, claims, liens, equities or other encumbrances.
Upon payment for the Securities to be sold by such Selling Shareholder pursuant
to this Agreement, delivery of such Securities, as directed by the Underwriters,
to Cede & Co. (“Cede”) or such other nominee as may be designated by The
Depository Trust Company (“DTC”), registration of such Securities in the name of
Cede or such other nominee and the crediting of such Securities on the books of
DTC to securities accounts of the Underwriters (assuming that neither DTC nor
any such Underwriter has notice of any adverse claim (within the meaning of
Section 8-105 of the UCC) to such Securities), (A) DTC shall be a “protected
purchaser” of such Securities within the meaning of Section 8-303 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Securities and (C) no action based on
any “adverse claim”, within the meaning of Section 8-102 of the UCC, to such
Securities may be asserted against the Underwriters with respect to such
security entitlement.

 

15

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(iv) Due Execution of Power of Attorney and Custody Agreement. The Selling
Shareholder has duly executed and delivered, in the form heretofore furnished to
the Representatives, the Power of Attorney and Custody Agreement with Daniel C.
Stevens, as attorney-in-fact (the “Attorney-in-Fact”), and LaSalle Bank, N.A.,
as custodian (the “Custodian”); the Custodian is authorized to deliver the
Securities to be sold by the Selling Shareholder hereunder and to accept payment
therefor; and the Attorney-in-Fact is authorized to execute and deliver this
Agreement and the certificate referred to in Section 5(e) or that may be
required pursuant to Section 5(k) on behalf of the Selling Shareholder, to sell,
assign and transfer to the Underwriters the Securities to be sold by the Selling
Shareholder hereunder, to determine the purchase price to be paid by the
Underwriters to the Selling Shareholder, as provided in Section 2(a) hereof, to
authorize the delivery of the Securities to be sold by the Selling Shareholder
hereunder, to accept payment therefor, and otherwise to act on behalf of the
Selling Shareholder in connection with this Agreement.

 

(v) Absence of Manipulation. The Selling Shareholder has not taken, and will not
take, directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.

 

(vi) Absence of Further Requirements. No filing with, or consent, approval,
authorization, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
for the performance by the Selling Shareholder of its obligations hereunder or
in the Power of Attorney and Custody Agreement, or in connection with the sale
and delivery of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or the Prospectus, except (i) such as may have
previously been made or obtained or as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations or state securities
laws and (ii) such as have been obtained under the laws and regulations of
jurisdictions outside the United States in which the Reserved Securities are
offered .

 

(vii) Certificates Suitable for Transfer. The Securities to be sold by the
Selling Shareholder pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or assignment
in blank with signatures guaranteed, have been placed in custody with the
Custodian with irrevocable conditional instructions to deliver such Securities
to the Underwriters pursuant to this Agreement.

 

(viii) No Association with NASD. Neither the Selling Shareholder nor any of the
Selling Shareholder’s affiliates directly, or indirectly through one or more

 

16

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intermediaries, controls, or is controlled by, or is under common control with,
or has any other association with (within the meaning of paragraph (dd) of
Article I of the By-laws of the NASD), any member firm of the NASD.

 

(c) Officer’s Certificates. Any certificate signed by any officer of the Company
or any of the Subsidiaries delivered to the Representatives or to counsel for
the Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby; and any certificate signed by or on behalf of the Selling
Shareholder as such and delivered to the Representatives or to counsel for the
Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Selling Shareholder to the Underwriters as to
the matters covered thereby.

 

SECTION 2. Sale and Delivery to Underwriters; Closing.

 

(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, each
of the Company and the Selling Shareholder, severally and not jointly, agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Company and the Selling
Shareholder, at the price per share set forth in Schedule C, that proportion of
the number of Initial Securities set forth in Schedule B opposite the name of
the Company or the Selling Shareholder, as the case may be, which the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.

 

(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase, in addition to the Initial Securities, the amount of
Option Securities set forth opposite the name of the Company on Schedule B at
the price per share set forth in Schedule C, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the aggregate number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a “Date
of Delivery”) shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, then each of the
Underwriters, acting severally and not jointly, will purchase from the Company
that proportion of the total number of Option Securities then being purchased
from the Company that the number of Initial Securities set forth in Schedule A

 

17

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opposite the name of such Underwriter bears to the total number of Initial
Securities, subject, in each case, to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.

 

(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP, 333 West Wacker Drive, Chicago, Illinois 60606, or at
such other place as shall be agreed upon by the Representatives and the Company
and the Selling Shareholder, at 9:00 A.M. (Eastern time) on the third (fourth,
if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business
day after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Representatives and the Company and the Selling
Shareholder (such time and date of payment and delivery being herein called
“Closing Time”).

 

In addition, in the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price for, and delivery of, such
Option Securities shall be made at the above-mentioned offices, or at such other
place as shall be agreed upon by the Representatives and the Company on each
Date of Delivery as specified in the notice from the Representatives to the
Company.

 

Payment shall be made to the Company and the Selling Shareholder by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to the Selling Shareholder’s Power of
Attorney and Custody Agreement, as the case may be, against delivery to the
Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. It is understood that each Underwriter has
authorized the Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial Securities and the
Option Securities, if any, which it has agreed to purchase. Keefe Bruyette,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.

 

(d) Denominations; Registration. The Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Representatives may request in writing at least one full business day
before the Closing Time or the relevant Date of Delivery, as the case may be.

 

SECTION 3. Covenants of the Company. The Company covenants with each Underwriter
as follows:

 

(a) Compliance with Securities Regulations and Commission Requests. The Company,
subject to Section 3(b), will comply with the requirements of Rule 430A and will
notify the Representatives immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall become
effective, or any supplement to

 

18

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the Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will use
its best efforts to cause the Registration Statement, if not effective at the
time of execution of this Agreement, and any amendments thereto, to become
effective as promptly as possible. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as shall be necessary
to ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.

 

(b) Filing of Amendments. The Company will give the Representatives notice of
its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish the Representatives with copies of any
such documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.

 

(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits thereto but including documents incorporated
or deemed to be incorporated by reference therein) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto furnished to
the Underwriters pursuant to this Section 3(c) will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.

 

(d) Delivery of Prospectuses. The Company has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the period
mentioned in Section 3(e) below, such number of copies of the Prospectus, any
documents incorporated by reference and any amendments or supplements thereto as
such

 

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Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters pursuant to this Section 3(d)
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.

 

(e) Continued Compliance with Securities Laws. The Company will comply with the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If, during such period
after the first date of the public offering of the Securities as in the opinion
of counsel for the Underwriters the Prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.

 

(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.

 

(g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act
as are necessary in order to make generally available to its securityholders as
soon as practicable an earnings statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.

 

(h) Use of Proceeds. The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under “Use
of Proceeds”.

 

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(i) Listing. The Company will file with The Nasdaq National Market all documents
and notices required by The Nasdaq National Market of companies that have
securities that are traded in the over-the-counter market and quotations for
which are reported by The Nasdaq National Market, including a “Notification
Form: Changes in the Number of Shares Outstanding”.

 

(j) Restriction on Sale of Securities. During a period of 90 days from the date
of the Prospectus (the “Restricted Period”), the Company will not, without the
prior written consent of Keefe Bruyette, directly or indirectly, (i) offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of (a) any shares of Common Stock or any securities substantially similar
thereto or (b) any other securities convertible into, or exchangeable or
exercisable for, shares of Common Stock or securities substantially similar
thereto, (ii) file any registration statement under the 1933 Act with respect to
any of the foregoing (other than on Form S-8) or (iii) enter into any swap,
hedge or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap, hedge or transaction is to be settled by
delivery of Common Stock or securities substantially similar thereto, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be
sold hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Prospectus, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectus or (D) any
shares of Common Stock issued pursuant to any non-employee director stock plan.
Keefe Bruyette agrees, for the benefit of the other Representatives, if
applicable, not to provide such consent without providing notice to each
Representative to permit compliance with applicable provisions of NASD Conduct
Rule 2177(f) restricting publication and distribution of research and public
appearances by research analysts before and after the expiration, waiver or
termination of a lock-up agreement and agrees only to provide consent in
circumstances that will permit such compliance by the Representatives.
Notwithstanding the foregoing, in the event that either (i) during the period
that begins on the date that is 15 calendar days plus three (3) business days
before the last day of the Restricted Period and ends on the last day of the
Restricted Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs, or (ii) prior to the expiration
of the Restricted Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Restricted
Period, the restrictions set forth herein will continue to apply until the
expiration of the date that is 15 calendar days plus three (3) business days
after the date on which the earnings release is issued or the material news or
event related to the Company occurs.

 

(k) Reporting Requirements. The Company, during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.

 

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(l) Compliance with the Sarbanes-Oxley Act. During the time when a prospectus is
required to be delivered under the 1933 Act, the Company shall at all times
comply, in all material respects, with all applicable provisions of the
Sarbanes-Oxley Act, including the related rules and regulations promulgated by
the Commission thereunder and the rules adopted by the The Nasdaq Stock Market,
Inc. pursuant thereto, in each case as in effect from time to time.

 

(m) Lock-up Agreements. The Company has furnished or will furnish to the
Representatives a “Lock-up” Agreement, in form and substance satisfactory to the
Representatives, signed by each of its current officers and directors and each
of the stockholders listed on Schedule B.

 

(n) Financial Statements. Prior to the Closing Time, the Company shall furnish
to the Underwriters as soon as reasonably practicable after they have been
approved by the Company’s Audit Committee, copies of any unaudited interim
consolidated financial statements of the Company and the Subsidiaries, for any
periods subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.

 

(o) Reserved Securities Restrictions. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted from sale, transfer,
assignment, pledge or hypothecation for a period of three months following the
date of this Agreement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction upon
such securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of the Reserved Securities, the Company
agrees to reimburse the Underwriters for any reasonable expenses (including,
without limitation, legal expenses) they incur in connection with such release.

 

SECTION 4. Payment of Expenses.

 

(a) Expenses. The Company and the Selling Shareholder will pay or cause to be
paid all expenses incident to the performance of their obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company’s counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky

 

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Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the NASD of the terms of the sale of the Securities, (x) the fees and expenses
incurred in connection with the inclusion of the Securities in The Nasdaq
National Market, (xi) the costs and expenses relating to investor presentations
on any “road show” undertaken in connection with the marketing of the offering
of the Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultant and (xii)
all costs and expenses of the Underwriters, including the fees and disbursements
of counsel for the Underwriters, in connection with matters related to the
Reserved Securities which are designated by the Company for sale to employees
and others having a business relationship with the Company.

 

(b) Expenses of the Selling Shareholder. The Selling Shareholder will pay all
expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by, this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the Underwriters, and their transfer between the
Underwriters pursuant to an agreement between such Underwriters, and (ii) the
fees and disbursements of their respective counsel and accountants.

 

(c) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company and the Selling Shareholder shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.

 

(d) Allocation of Expenses. The provisions of this Section shall not affect any
agreement that the Company and the Selling Shareholder may make for the sharing
of such costs and expenses.

 

SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary of the Company or on behalf of the Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:

 

(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A

 

23

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Information shall have been filed with the Commission in accordance with Rule
424(b) (or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A).

 

(b) Opinion of Counsel for the Company and the Selling Shareholder. At Closing
Time, the Representatives shall have received the favorable opinion, dated as of
Closing Time, of Katten Muchin Rosenman LLP, counsel for the Company and, solely
in connection with the delivery of the opinion required by this Section 5(b),
the Selling Shareholder, in form and substance reasonably satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the Underwriters may reasonably
request.

 

(c) Opinion of Counsel for Underwriters. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters in
form and substance satisfactory to the Underwriters.

 

(d) Officers’ Certificate. At Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and the Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.

 

(e) Certificate of Selling Shareholder. At Closing Time, the Representatives
shall have received a certificate of an Attorney-in-Fact on behalf of the
Selling Shareholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Shareholder contained in Section
1(b) hereof are true and correct in all respects with the same force and effect
as though expressly made at and as of Closing Time and (ii) the Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.

 

(f) Accountant’s Comfort Letter. At the time of the execution of this Agreement,
the Representatives shall have received from KPMG LLP a letter, dated such date,
in form and substance satisfactory to the Representatives, together with signed
or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type

 

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ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the consolidated financial statements and certain financial
information contained in the Registration Statement and the Prospectus.

 

(g) Bring-down Comfort Letter. At Closing Time, the Representatives shall have
received from KPMG LLP a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(f) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.

 

(h) No Objection. The NASD has confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements.

 

(i) Lock-up Agreements. Prior to the distribution of the preliminary Prospectus,
the Representatives shall have received an agreement substantially in the form
of Exhibit B hereto signed by the persons listed on Schedule E hereto.

 

(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company and any Subsidiary hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:

 

(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.

 

(ii) Opinion of Counsel for Company. The favorable opinion of Katten Muchin
Rosenman LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(b) hereof.

 

(iii) Opinion of Counsel for Underwriters. The favorable opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by Section
5(c) hereof.

 

(iv) Bring-down Comfort Letter. A letter from KPMG LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(g) hereof, except that the “specified
date” in the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.

 

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(k) Additional Documents. At Closing Time and at each Date of Delivery counsel
for the Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholder in connection with the issuance
and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.

 

(l) Termination of Agreement. If any condition specified in this Section shall
not have been fulfilled when and as provided in this Agreement, this Agreement,
or, in the case of any condition to the purchase of Option Securities on a Date
of Delivery which is after the Closing Time, the obligations of the several
Underwriters to purchase the relevant Option Securities, may be terminated by
the Representatives by notice to the Company at any time at or prior to Closing
Time or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.

 

SECTION 6. Indemnification.

 

(a) Indemnification of Underwriters by the Company. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, as follows:

 

(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of (A) the violation of any applicable laws or
regulations of foreign jurisdictions where Reserved Securities have been offered
and (B) any untrue statement or alleged untrue statement of a material fact
included in the supplement or prospectus wrapper material distributed in
connection with the reservation and sale of the Reserved Securities to certain
eligible employees and persons having business relationships with the Company or
the omission or alleged omission therefrom of a material fact necessary to make
the statements therein, when considered in conjunction with the Prospectus or
preliminary prospectus, not misleading;

 

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(iii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission
or in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and

 

(iv) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by Keefe Bruyette), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission or in connection with any violation of the nature referred to in
Section 6(a)(ii)(A) hereof, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i), (ii) or (iii) above;

 

provided, however, that the foregoing indemnity agreement (i) shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Keefe Bruyette expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), provided that the parties acknowledge and agree that the
only information furnished in writing by Keefe Bruyette on behalf of the
Underwriters expressly for use in the Registration Statement or Prospectus are
the concession and reallowance figures appearing in the Prospectus in the
section entitled “Underwriting” and the information contained under the captions
“Underwriting—Stabilization” and “Underwriting—Passive Market Making”; and (ii)
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any loss, liability, claim, damage or
expense purchased Securities, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, liabilities, claims,
damages or expenses, unless such failure is the result of noncompliance by the
Company with Section 3(d) hereof. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.

 

(b) Indemnification of Underwriters by the Selling Shareholder. The Selling
Shareholder agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, from and against any loss,
liability, claim, damage and expense whatsoever, as incurred, arising out of, or
based upon, (i) any untrue statement or alleged untrue statement of a

 

27

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material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (ii)
the omission or alleged omission to state in any preliminary prospectus,
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, for any legal or other
expenses reasonably incurred by that Underwriter, any such controlling person in
connection with investigating or defending or preparing to defend against any
such loss, liability, claim, damage or expense; provided, however, that the
Selling Shareholder shall be liable in any such case only to the extent that any
such loss, claim, damage, liability or expense arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in conformity with
written information concerning the Selling Shareholder furnished to the Company
specifically for inclusion therein; provided further, however, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
loss, liability, claim, damage or expense purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, liabilities, claims, damages or expenses, unless such failure is the
result of noncompliance by the Company with Section 3(d) hereof; provided,
further, that the aggregate amount of the Selling Shareholder’s indemnity and
contribution obligations under this Section 6(b) shall not exceed the net
proceeds received by such Selling Shareholder from its sale of Securities
hereunder.

 

(c) Indemnification of Company, Directors and Officers and Selling Shareholder.
Each Underwriter severally agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, and the Selling Shareholder and
each person, if any, who controls the Selling Shareholder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Keefe Bruyette
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), provided that the parties acknowledge and agree that the only
information furnished in writing by Keefe Bruyette on behalf of the Underwriters
expressly for use in the Registration Statement or Prospectus are the concession
and reallowance figures appearing in the Prospectus in the section entitled
“Underwriting” and the information contained under the captions
“Underwriting—Stabilization” and “Underwriting—Passive Market Making”.

 

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(d) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Keefe Bruyette, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

 

(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

 

(f) Indemnification for Reserved Securities. In connection with the offer and
sale of the Reserved Securities, the Company agrees, promptly upon a request in
writing, to indemnify and hold harmless the Underwriters from and against any
and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of the eligible employees and persons having business
relationships with the Company to pay for and accept delivery of Reserved
Securities which, by the end of the first business day following the date of
this Agreement, were subject to a properly confirmed agreement to purchase.

 

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(g) Other Agreements with Respect to Indemnification. The provisions of this
Section shall not affect any agreement among the Company and the Selling
Shareholder with respect to indemnification.

 

SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholder on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholder on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions, or in connection with any violation
of the nature referred to in Section 6(a)(ii)(A) hereof, which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

 

The relative benefits received by the Company and the Selling Shareholder on the
one hand and the Underwriters on the other hand in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Selling Shareholder and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus.

 

The relative fault of the Company and the Selling Shareholder on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholder or by the
Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission or any
violation of the nature referred to in Section 6(a)(ii)(A) hereof.

 

The Company, the Selling Shareholder and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

 

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Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.

 

No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

 

For purposes of this Section 7, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company or the Selling
Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company or the
Selling Shareholder, as the case may be. The Underwriters’ respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.

 

The provisions of this Section shall not affect any agreement among the Company
and the Selling Shareholder with respect to contribution.

 

SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of the Subsidiaries or the
Selling Shareholder submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholder, and shall survive delivery of the Securities to the
Underwriters.

 

SECTION 9. Termination of Agreement.

 

(a) Termination; General. The Representatives may terminate this Agreement, by
notice to the Company and the Selling Shareholder, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, management, business affairs or business
prospects of the Company and the Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic

 

31

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conditions, including without limitation as a result of terrorist activities, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or The Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in The Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the NASD
or any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York or Illinois authorities or a material
disruption in commercial banking or securities settlement or clearance services
in the United States has occurred.

 

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8
shall survive such termination and remain in full force and effect.

 

SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
“Defaulted Securities”), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24 hour period, then:

 

(a) if the number of Defaulted Securities does not exceed 10% of the number of
Securities to be purchased on such date, each of the non defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non defaulting
Underwriters, or

 

(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non defaulting Underwriter.

 

No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.

 

In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Underwriters to
purchase and the Company to sell the

 

32

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relevant Option Securities, as the case may be, either (i) the Representatives
or (ii) the Company and the Selling Shareholder shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term “Underwriter” includes any person substituted for an
Underwriter under this Section 10.

 

SECTION 11. Default by the Selling Shareholder or the Company.

 

(a) If the Selling Shareholder shall fail at Closing Time to sell and deliver
the number of Securities which the Selling Shareholder is obligated to sell
hereunder, then the Underwriters may, at the option of the Representatives, by
notice from the Representatives to the Company, either (a) terminate this
Agreement without any liability on the fault of any non-defaulting party except
that the provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and
effect or (b) elect to purchase the Securities which the Company has agreed to
sell hereunder. No action taken pursuant to this Section 11 shall relieve the
Selling Shareholder so defaulting from liability, if any, in respect of such
default.

 

In the event of a default by the Selling Shareholder as referred to in this
Section 11, each of the Representatives and the Company shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required change in the Registration Statement or Prospectus or in any other
documents or arrangements.

 

(b) If the Company shall fail at Closing Time or at the Date of Delivery to sell
the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting
party; provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall
remain in full force and effect. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of such default.

 

SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representatives at c/o Keefe, Bruyette & Woods, Inc., 787
Seventh Avenue, 4th Floor, New York, New York 10019, attention of Mitchell
Kleinman, Esq.; notices to the Company shall be directed to it at 9550 West
Higgins Road, Rosemont, Illinois 60018, attention of Mr. Daniel Stevens; and
notices to the Selling Shareholder shall be directed to it at 9550 West Higgins
Road, Rosemont, Illinois 60018, attention of Mr. Jeffrey W. Taylor.

 

SECTION 13. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company and the Selling Shareholder and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholder and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable

 

33

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right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters, the
Company and the Selling Shareholder and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.

 

SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

 

SECTION 15. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.

 

[Signatures On Following Page]

 

34

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholder a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriters, the
Company and the Selling Shareholder in accordance with its terms.

 

Very truly yours, TAYLOR CAPITAL GROUP, INC. By  

/s/ Daniel C. Stevens

--------------------------------------------------------------------------------

Name:   Daniel C. Stevens Title:   CFO The Selling Shareholder

named in Schedule B hereto

 

By  

Daniel C. Stevens

--------------------------------------------------------------------------------

    As Attorney-in-Fact

 

CONFIRMED AND ACCEPTED,

as of the date first above written:

 

KEEFE BRUYETTE & WOODS, INC. STIFEL, NICOLAUS & COMPANY, INCORPORATED

RYAN BECK & CO., INC.

 

                By:  

KEEFE BRUYETTE & WOODS, INC.

 

                By:  

/s/ Steven P. Kent

--------------------------------------------------------------------------------

                Name:   Steven P. Kent                 Title:   Managing
Director

 

For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.

--------------------------------------------------------------------------------

SCHEDULE A

 

Name of Underwriter

--------------------------------------------------------------------------------

  

Number of

Initial Securities

--------------------------------------------------------------------------------

Keefe, Bruyette & Woods, Inc.

   975,000

Stifel, Nicolaus & Company, Incorporated

   300,000

Ryan Beck & Co., Inc.

   225,000     

--------------------------------------------------------------------------------

Total

   1,500,000     

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

SCHEDULE B

 

     Number of Initial
Securities to be Sold

--------------------------------------------------------------------------------

  

Maximum Number of

Option Securities to Be Sold

--------------------------------------------------------------------------------

Taylor Capital Group, Inc.

   1,000,000    150,000

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

   500,000    —       

--------------------------------------------------------------------------------

  

--------------------------------------------------------------------------------

Total

   1,500,000    150,000     

--------------------------------------------------------------------------------

  

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

SCHEDULE C

 

TAYLOR CAPITAL GROUP, INC.

1,500,000 Shares of Common Stock

(Par Value $.01 Per Share)

 

1. The initial public offering price per share for the Securities, determined as
provided in said Section 2, shall be $36.30.

 

2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be $34.213, being an amount equal to the initial public
offering price set forth above less $2.087 per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.

--------------------------------------------------------------------------------

SCHEDULE D

 

LIST OF SUBSIDIARIES

 

Cole Taylor Bank, an Illinois chartered bank

Cole Taylor Deferred Exchange Corp., an Illinois corporation

Cole Taylor Financial Services, Inc., an Illinois corporation

Cole Taylor Insurance Service, Inc., an Illinois corporation

CT Group, L.L.C., an Illinois limited liability company

CT Mortgage Company, Inc., a Delaware corporation

TAYC Capital Trust I, a statutory trust created under the laws of the State of
Delaware

TAYC Capital Trust II, a statutory trust created under the laws of the State of
Delaware

TCGRE, Inc., an Illinois corporation

1965 Milwaukee Ave. Building Corp., an Illinois corporation

 

 

--------------------------------------------------------------------------------

SCHEDULE E

 

LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP

 

Officer, Director or Shareholder

--------------------------------------------------------------------------------

Bliwas, Ronald

Emanuel, Ronald

Leander, Adelyn

McGowan, Edward

O’Sullivan, Louise

Pearl, Melvin

Pryor, IV, Shepherd G.

Stevens, Daniel

Taylor, Bruce W.

Taylor, Iris Tark; Cindy Taylor Robinson, Jeffrey W. Taylor Voting

Trust

Taylor, Jeffrey W.

Tinberg, Richard

Yeager, Mark

 

 

--------------------------------------------------------------------------------

Exhibit A

 

FORM OF OPINION OF COUNSEL

TO BE DELIVERED PURSUANT TO

SECTION 5(b)

 

(i) The Company has been duly incorporated and, based solely on a review of a
certificate of good standing issued by the State of Delaware (and bring-downs
thereof), is existing as a corporation in good standing under the laws of the
State of Delaware.

 

(ii) The Company has the requisite corporate power and authority to own or lease
its properties and to conduct its business as described in the Prospectus.

 

(iii) Based solely on a review of a certificate of good standing and
qualification to do business issued by each of the jurisdictions set forth on
Schedule D to the Underwriting Agreement (and bring-downs thereof), the Company
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction listed on Schedule D to the Underwriting
Agreement.

 

(iv) The Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the “BHC Act”). Cole Taylor Bank is
duly licensed in the State of Illinois by the Illinois Department of Financial
and Professional Regulation (the “IDFPR”).

 

(v) The Company has authorized and outstanding capital stock as set forth under
the caption “Capitalization” in the Prospectus (except for subsequent issuances,
if any, pursuant to the Underwriting Agreement and subsequent issuances or
purchases pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus) and the authorized capital
stock of the Company conforms in all materials respects as to legal matters to
the description thereof contained in the Prospectus. The shares of issued and
outstanding capital stock, including the Securities to be purchased by the
Underwriters from the Selling Shareholder, have been duly authorized and validly
issued and are fully paid and non-assessable; and the stockholders of the
Company have no preemptive rights with respect to the Securities or any other
shares of capital stock of the Company pursuant to the General Corporation Law
of the State of Delaware, the Certificate or By-laws or any agreement or
instrument known to us to which the Company is a party.

 

(vi) The Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued and fully paid and non-assessable.

 

(vii) Each Subsidiary is a corporation, limited liability company, statutory
trust or banking corporation duly incorporated or organized, as the case may be,
and based solely on a review of certificates of good standing and qualification
to do business issued by each of the

 

A-1

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jurisdictions set forth on Schedule D to the Underwriting Agreement (and
bring-downs thereof), is existing as a corporation, limited liability company,
statutory trust or banking corporation in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be, has the
requisite power and authority to own or lease its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
listed on Schedule D to the Underwriting Agreement; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each Subsidiary has been duly authorized and validly issued, is
fully paid and non assessable and, to our knowledge, is owned by the Company,
directly or through a Subsidiary, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, or claim, other than (i) the pledge of Cole
Taylor Bank capital stock to LaSalle Bank, N.A. (“LaSalle”), under that certain
Loan and Subordinated Debenture Purchase Agreement, dated November 27, 2002,
between the Company and LaSalle, as amended, and (ii) the trust preferred
securities issued by TAYC Capital Trust I and TAYC Capital Trust II, the
Company’s wholly-owned Delaware statutory trusts; to our knowledge, none of the
outstanding shares of capital stock of any Subsidiary was issued in violation of
the preemptive rights of any securityholder in such Subsidiary.

 

(viii) The Company has corporate power and authority to enter into and perform
its obligations under the Underwriting Agreement. The Underwriting Agreement has
been duly authorized, executed and delivered by the Company, and is enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles and except as to those provisions relating to
indemnities for liabilities arising under the 1933 Act as to which no opinion
need be expressed.

 

(ix) The Registration Statement has been declared effective under the 1933 Act
and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission. Any required filing of the Prospectus pursuant to Rule 424(b) under
the 1933 Act has been made in the manner and within the time period required by
Rule 424(b).

 

(x) The Registration Statement, the Rule 430A Information, the Prospectus, and
each amendment or supplement to the Registration Statement and Prospectus, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules and other financial data included therein or omitted
therefrom, as to which we need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.

 

(xi) The documents incorporated by reference in the Registration Statement and
Prospectus, as of their respective effective dates or the dates they were filed
with the Commission (other than the financial statements and supporting
schedules and other financial data included therein or omitted therefrom, as to
which we need express no opinion) complied as to form in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations.

 

A-2

--------------------------------------------------------------------------------

(xii) The form of certificate used to evidence the Initial Securities complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the Certificate and By-laws and the requirements of
The Nasdaq National Market.

 

(xiii) Based solely on a review of our firm’s litigation docket, our search of
the dockets of the (a) Circuit Courts of Illinois, Cook County and DuPage
County, (b) Appellate Courts of Illinois, First and Second Districts, (c) United
States District Courts (civil) of Delaware and the Northern District of
Illinois, and (d) United States Court of Appeals, Delaware and Illinois, and an
officer’s certificate attached as an exhibit to this opinion, to our knowledge,
there is no action, suit, proceeding, inquiry or investigation, pending or
threatened, to which the Company or any Subsidiary is a party, or to which the
property of the Company or any Subsidiary is subject, before or brought by any
court or governmental agency or body, domestic or foreign, which is required to
be described in the Registration Statement or which, if determined adversely to
the Company or any Subsidiary, would individually or in the aggregate materially
and adversely affect the ability of the Company to perform its obligations under
the Underwriting Agreement.

 

(xiv) All descriptions in the Registration Statement or incorporated by
reference of contracts and other documents to which the Company or the
Subsidiaries are a party are accurate in all material respects; there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement, to be filed as exhibits thereto or incorporated by reference other
than those described or referred to therein, filed as exhibits thereto or
incorporated by reference, and the descriptions thereof or references thereto
are correct in all material respects.

 

(xv) The statements in the Prospectus under the caption “Description of Capital
Stock” and “Supervision and Regulation” and in the Registration Statement under
Item 15, insofar as such statements purport to be a summary of legal matters,
documents or proceedings referred to therein, fairly and accurately summarize in
all material respects such legal matters, documents and proceedings.

 

(xvi) To our knowledge, neither the Company nor any Subsidiary is in violation
of any provision of the Certificate or By-laws and, to our knowledge, no default
by the Company or any Subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any of
the agreements or instruments set forth on Appendix A attached hereto (the
“Listed Contracts”), and each such Listed Contract is in full force and effect
and is enforceable against the Company or any of the Subsidiaries, as the case
may be, and, to our knowledge, the other parties thereto, in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles.

 

(xvii) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than under the 1933 Act, the 1933 Act
Regulations, the 1934 Act, the 1934 Act Regulations and The Nasdaq National
Market, which have been obtained, or as may be required under the securities or
blue sky laws of the various states, as to which we need express no

 

A-3

--------------------------------------------------------------------------------

opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Underwriting Agreement by the Company or for the
offering, issuance, sale or delivery of the Securities by the Company.

 

(xviii) The execution, delivery and performance of the Underwriting Agreement by
the Company and the consummation by the Company of the transactions contemplated
in the Underwriting Agreement and compliance by the Company with its obligations
under the Underwriting Agreement do not and will not conflict with or constitute
a breach of, or default or Repayment Event (as defined in Section 1(a)(xi) of
the Underwriting Agreement) under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument that is
described or referred to in the Registration Statement or the Prospectus or
filed or incorporated by reference as an exhibit to the Registration Statement
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the Certificate or By-laws
of the Company or any Subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree (other than state and federal
securities laws, rules and regulations, as to which we shall express no
opinion), known to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any Subsidiary
(including the rules, regulations and requirements of the United States Federal
Reserve System (the “Federal Reserve”) and the banking laws and regulations of
the State of Illinois and the banking laws and regulations of other applicable
jurisdictions) or any of their respective properties, assets or operations.

 

(xix) To our knowledge, neither the Company nor any Subsidiary is subject to a
directive from the Federal Deposit Insurance Corporation (the “FDIC”), the
Federal Reserve, the IDFPR or any other governmental authority to make any
material changes in the method of conducting its business and no such directive
is pending or threatened by such authorities. To our knowledge, the Company and
the Subsidiaries are not subject to any cease-and-desist order, prompt
correction action directive, civil money penalty, orders of prohibition, consent
order, written agreement, memorandum of understanding, or other enforcement
actions or supervisory agreements issued by the Federal Reserve, the FDIC, the
IDFPR or any other federal or state bank regulatory agency to which the Company
or any Subsidiary is subject.

 

(xx) The Company is not an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the 1940 Act.

 

(xxi) To our knowledge, no holder of any security of the Company has the right
to have any security owned by such holder included in the Registration Statement
or to demand registration of any security owned by such holder during the period
ending 90 days after the date of this Agreement.

 

(xxii) To our knowledge, no filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, (other than the issuance
of the order of the Commission declaring the Registration Statement effective
and such authorizations, approvals or consents as may be

 

A-4

--------------------------------------------------------------------------------

necessary under state securities laws, as to which we need express no opinion)
is necessary or required to be obtained by the Selling Shareholder for the
performance by the Selling Shareholder of its obligations under the Transaction
Documents, or in connection with the offer, sale or delivery of the Securities.

 

(xxiii) Each of the Power of Attorney and Custody Agreement has been duly
executed and delivered by the Selling Shareholder and constitutes a binding
agreement of the Selling Shareholder.

 

(xxiv) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.

 

(xxv) The Attorney-in-Fact has been duly authorized by the Selling Shareholder
to deliver the Securities on behalf of the Selling Shareholder in accordance
with the terms of the Underwriting Agreement.

 

(xxvi) The execution, delivery and performance of the Underwriting Agreement and
the Power of Attorney and Custody Agreement by the Selling Shareholder and the
sale and delivery of the Securities and the consummation of the transactions
contemplated in the Underwriting Agreement by the Selling Shareholder and
compliance by the Selling Shareholder with its obligations under the
Underwriting Agreement have been duly authorized by all necessary action on the
part of the Selling Shareholder and, to our knowledge, do not and will not,
conflict with or constitute a breach of, or default under or result in the
creation or imposition of any lien, charge or encumbrance upon the Securities or
any property or assets of the Selling Shareholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, license,
lease or other instrument or agreement known to us to which the Selling
Shareholder is a party or by which the Selling Shareholder may be bound, or to
which any of the property or assets of the Selling Shareholder may be subject
nor will such action result in any violation of the provisions of the Trust
Agreement, if applicable, or any law, administrative regulation, judgment or
order of any governmental agency or body or any administrative or court decree
having jurisdiction over the Selling Shareholder or any of its properties.

 

(xxvii) To our knowledge, the Selling Shareholder has valid title to, or a valid
security entitlement in respect of, the Securities to be sold by the Selling
Shareholder pursuant to the Underwriting Agreement, free and clear of any
pledge, lien, security interest, charge, claim, equity or encumbrance of any
kind, and has full right, power and authority to sell, transfer and deliver such
Securities pursuant to the Underwriting Agreement.

 

(xxviii) Upon (i) payment for the Securities to be sold by the Selling
Shareholder pursuant to the Underwriting Agreement, (ii) physical delivery of
the certificates representing such Securities to the transfer agent for the
Securities, and registration of such Securities in the name of DTC upon
registration of transfer by the Company, (iii) registration by book-entry of the
credit to Keefe Bruyette & Wood’s securities accounts with DTC of the purchase
of such Securities in the records of DTC, and (iv) registration by book-entry of
the credit to the other Underwriters’ securities accounts of their purchase of
such Securities in the records of any other “securities intermediary” (as
defined in Section 8-102(a)(14) of the New York UCC) which acts

 

A-5

--------------------------------------------------------------------------------

as a “clearing corporation” (as defined in Section 8-102(a)(5) of the New York
UCC) or maintains “securities accounts” (as defined in Section 8-501(a) of the
New York UCC) with respect to the transfer of such Securities to the
Underwriters, and assuming each of the Underwriters acquires the Securities
without notice of any “adverse claims” (as defined in Section 8-102(a)(1) of the
New York UCC), then the Underwriters will become the “entitlement holders” (as
defined in Section 8-102(a)(7) of the New York UCC) of the Securities, free of
any “adverse claims” (as defined in Section 8-102(a)(1) of the New York UCC).

 

We have participated in the preparation of the Registration Statement and the
Prospectus and in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company,
representatives of the Underwriters and counsel for the Underwriters, at which
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although (except as set forth in paragraphs v and xv
above) we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus, on the basis of the foregoing,
nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information (except for financial statements and schedules and other financial
data included or incorporated by reference therein or omitted therefrom, as to
which we need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits 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.

 

Wherever we indicate that our opinion with respect to the existence or absence
of facts is, to our knowledge or known to us, our opinion is based solely on the
actual knowledge of the attorneys in this firm who have given substantive
attention to the Company’s affairs.

 

In rendering such opinion, such counsel may rely, as to matters of fact (but not
as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991). Nothing contained in the preceding sentence shall prevent
counsel from making assumptions and qualifications which are customary in
transactions of this type.

 

A-6

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Exhibit B

 

FORM OF LOCK-UP LETTER

 

                    , 2005

 

KEEFE, BRUYETTE & WOODS, INC.

STIFEL, NICOLAUS & COMPANY, INCORPORATED

RYAN BECK & CO., INC.

as Representatives of the several

Underwriters to be named in the

within mentioned Underwriting Agreement

c/o Keefe, Bruyette & Woods, Inc.

7020 Country Line Road

Burr Ridge, Illinois 60527

 

  Re: Proposed Public Offering by Taylor Capital Group, Inc.

 

Ladies and Gentlemen:

 

The undersigned is the beneficial owner of the common stock, $.01 par value per
share (the “Common Stock”), or securities convertible into or exchangeable or
exercisable for Common Stock (the “Other Securities”), of Taylor Capital Group,
Inc., a Delaware corporation (the “Company”), set forth below. The undersigned
understands that the Company has filed a Registration Statement on Form S-3 (the
“Registration Statement”) with the Securities and Exchange Commission (the
“Commission”) in connection with the public offering of the Company’s Common
Stock (the “Offering”). The undersigned also understands that Keefe, Bruyette &
Woods, Inc. (“Keefe”), Stifel, Nicolaus & Company, Incorporated, and Ryan Beck &
Co., Inc., as Representatives of the several Underwriters, propose to enter into
an Underwriting Agreement (the “Underwriting Agreement”) with the Company in
connection with the Offering. All terms not otherwise defined herein shall have
the same meanings as in the Underwriting Agreement.

 

In recognition of the benefit that the Offering will confer upon the undersigned
as a stockholder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees, for the
benefit of the Company, Keefe and each Underwriter to be named in the
Underwriting Agreement, that, during a period of 90 days from the date of the
final Prospectus (the “Restricted Period”) filed with the Commission pursuant to
Rule 424(b) of the Securities Act of 1933, as amended (the “Act”), promulgated
by the Commission, or if no filing under Rule 424(b) is made, the date of the
final Prospectus included in the Registration Statement when declared effective
under the Act. The undersigned will not, without the prior written consent of
Keefe, on behalf of the Underwriters, directly or indirectly, (a) offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to

 

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purchase or other sale or disposition) of (i) any shares of Common Stock, Other
Securities or any securities substantially similar thereto, or (ii) any other
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock or such Other Securities or similar securities, beneficially owned
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) by the undersigned on the date hereof or hereafter acquired or (b)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock or Other Securities, whether any such swap or transaction is
to be settled by delivery of Common Stock or Other Securities, in cash or other
otherwise. Notwithstanding the foregoing, in the event that either (i) during
the period that begins on the date that is 15 calendar days plus three (3)
business days before the last day of the Restricted Period and ends on the last
day of the Restricted Period, the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (ii) prior to the
expiration of the Restricted Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Restricted Period, the restrictions set forth herein will continue to apply
until the expiration of the date that is 15 calendar days plus three (3)
business days after the date on which the earnings release is issued or the
material news or event related to the Company occurs.

 

Further, the undersigned agrees that at any time prior to the effective date of
the Registration Statement, the undersigned will not, without the prior written
consent of Keefe, on behalf of the Underwriters, directly or indirectly, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of (i) any shares of Common Stock, Other Securities, or securities substantially
similar thereto, or (ii) any other securities convertible into, or exchangeable
or exercisable for, any shares of Common Stock or such Other Securities or
similar securities, beneficially owned (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) by the undersigned on the date
hereof or hereafter acquired without first requiring any such offering or
acquiring parties execute and deliver to Keefe an agreement of substantially the
tenor hereof.

 

Notwithstanding the foregoing, the undersigned may transfer Common Stock or
Other Securities of the Company (i) as a bona fide gift or gifts, provided that
prior to such transfer the donee or donees thereof agree in writing to be bound
by the restrictions set forth herein, (ii) to any trust, partnership,
corporation or other entity formed for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that prior to
such transfer a duly authorized officer, representative or trustee of such
transferee agrees in writing to be bound by the restrictions set forth herein,
and provided further that any such transfer shall not involve a disposition for
value or (iii) if such transfer occurs by operation of law, such as rules of
descent and distribution, statutes governing the effects of a merger or a
qualified domestic order, provided that prior to such transfer the transferee
executes an agreement stating that the transferee is receiving and holding the
shares subject to the provisions of this agreement. For purposes hereof,
“immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin.

 

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The undersigned hereby confirms that he, she or it understands that the
Underwriters and the Company will rely upon the representations set forth in
this agreement in proceeding with the Offering. This agreement shall be binding
on the undersigned and his, her or its respective successors, heirs, personal
representatives and assigns.

 

Very truly yours, Signature:  

 

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Print Name:  

 

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The foregoing is accepted and agreed to

as of the date first written above:

KEEFE, BRUYETTE & WOODS, INC.

 

By:

 

 

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Name:

 

 

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Title:

 

 

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Ownership of Common Stock and Other Securities:

 

Type of Security

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   Number of Shares*

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Common Stock      Options      Warrants      Convertible Securities     
Other (please describe):     

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* For securities other than Common Stock, indicate the aggregate number of
shares of Common Stock into which or for which such securities are convertible,
exchangeable or exercisable.

 

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