EXHIBIT 10.79

 

TAYLOR CAPITAL GROUP, INC.

 

40,000 Capital Securities

 

Floating Rate Capital Securities

(Liquidation Amount $1,000.00 per Capital Security)

 

PLACEMENT AGREEMENT

 

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June 9, 2004

 

FTN Financial Capital Markets

845 Crossover Lane, Suite 150

Memphis, Tennessee 38117

 

Keefe, Bruyette & Woods, Inc.

787 7th Avenue

4th Floor

New York, New York 10019

 

Ladies and Gentlemen:

 

Taylor Capital Group, Inc., a Delaware corporation (the “Company”), and its
financing subsidiary, TAYC Capital Trust II, a Delaware statutory trust (the
“Trust,” and hereinafter together with the Company, the “Offerors”), hereby
confirm their agreement (this “Agreement”) with you as placement agents (the
“Placement Agents”), as follows:

 

Section 1. Issuance and Sale of Securities.

 

1.1. Introduction. The Offerors propose to issue and sell at the Closing (as
defined in Section 2.2.1 hereof) 40,000 of the Trust’s Floating Rate Capital
Securities, with a liquidation amount of $1,000.00 per capital security (the
“Capital Securities”), to First Tennessee Bank National Association, a national
banking association organized under the laws of the United States of America and
Preferred Term Securities XIV, Ltd., a company with limited liability
established under the laws of the Cayman Islands (the “Purchasers”) pursuant to
the terms of Subscription Agreements entered into, or to be entered into on or
prior to the Closing Date (as defined in Section 2.2.1 hereof), between the
Offerors and the Purchasers (the “Subscription Agreements”), the forms of which
are attached hereto as Exhibit A-1 and Exhibit A-2 and incorporated herein by
this reference.

 

1.2. Operative Agreements. The Capital Securities shall be fully and
unconditionally guaranteed on a subordinated basis by the Company with respect
to distributions and amounts payable upon liquidation, redemption or repayment
(the “Guarantee”) pursuant and subject to the Guarantee Agreement (the
“Guarantee Agreement”), to be dated as of the Closing Date and executed and
delivered by the Company and Wilmington Trust Company (“WTC”), as trustee (the
“Guarantee Trustee”), for the benefit from time to time of the holders of the
Capital Securities. The entire proceeds from the sale by the Trust to the
holders of the Capital Securities shall be combined with the entire proceeds
from the sale by the

 

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Trust to the Company of its common securities (the “Common Securities”), and
shall be used by the Trust to purchase $41,238,000.00 in principal amount of the
Floating Rate Junior Subordinated Deferrable Interest Debentures (the
“Debentures”) of the Company. The Capital Securities and the Common Securities
for the Trust shall be issued pursuant to an Amended and Restated Declaration of
Trust among WTC, as Delaware trustee (the “Delaware Trustee”), WTC, as
institutional trustee (the “Institutional Trustee”), the Administrators named
therein, and the Company, to be dated as of the Closing Date and in
substantially the form heretofore delivered to the Placement Agents (the “Trust
Agreement”). The Debentures shall be issued pursuant to an Indenture (the
“Indenture”), to be dated as of the Closing Date, between the Company and WTC,
as indenture trustee (the “Indenture Trustee”). The documents identified in this
Section 1.2 and in Section 1.1 are referred to herein as the “Operative
Documents.”

 

1.3. Rights of Purchasers. The Capital Securities shall be offered and sold by
the Trust directly to the Purchasers without registration of any of the Capital
Securities, the Debentures or the Guarantee under the Securities Act of 1933, as
amended (the “Securities Act”), or any other applicable securities laws in
reliance upon exemptions from the registration requirements of the Securities
Act and other applicable securities laws. The Offerors agree that this Agreement
shall be incorporated by reference into the Subscription Agreements (except for
the rights and benefits provided in Sections 2.1, 2.4 and 10) and the Purchasers
shall be entitled to each of the benefits of the Placement Agents and the
Purchasers under this Agreement and shall be entitled to enforce obligations of
the Offerors under this Agreement as fully as if the Purchasers were a party to
this Agreement. The Offerors and the Placement Agents have entered into this
Agreement to set forth their understanding as to their relationship and their
respective rights, duties and obligations.

 

1.4. Legends. Upon original issuance thereof, and until such time as the same is
no longer required under the applicable requirements of the Securities Act, the
Capital Securities and Debentures certificates shall each contain a legend as
required pursuant to any of the Operative Documents.

 

Section 2. Purchase of Capital Securities.

 

2.1. Exclusive Rights; Purchase Price. From the date hereof until the earlier of
the Closing Date or the Last Closing Date (which date may be extended by mutual
agreement of the Offerors and the Placement Agents), the Offerors hereby grant
to the Placement Agents the exclusive right to arrange for the sale of the
Capital Securities to the Purchasers at a purchase price of $1,000.00 per
Capital Security.

 

2.2. Closing and Delivery of Payment.

 

2.2.1. Closing; Closing Date. The sale and purchase of the Capital Securities by
the Offerors to the Purchasers shall take place at a closing (the “Closing”) at
the offices of Lewis, Rice & Fingersh, L.C., at 10:00 a.m. (St. Louis time) on
the earlier of (i) June 17, 2004 (the “Closing Date”) or (ii) June 30, 2004 (the
“Last Closing Date”) unless consented to by the Purchasers. Payment by the
Purchasers shall be payable in the manner set forth in the Subscription
Agreements and shall be made prior to or on the Closing Date.

 

2.2.2. Delivery. The certificates for the Capital Securities shall be in
definitive form, each registered in the name of the applicable Purchaser, or
Purchaser designee, and in the aggregate amount of the Capital Securities
purchased by the Purchaser.

 

2.2.3. Transfer Agent. The Offerors shall deposit the certificates representing
the Capital Securities with the Institutional Trustee or other appropriate party
prior to the Closing Date.

 

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2.3. Placement Agents’ Fees and Expenses.

 

2.3.1. Placement Agents’ Compensation. Because the proceeds from the sale of the
Capital Securities shall be used to purchase the Debentures from the Company,
the Company shall pay an aggregate of $10.00 for each $1,000.00 of principal
amount of Debentures sold to the Trust (excluding the Debentures related to the
Common Securities purchased by the Company). Of this amount, $5.00 for each
$1,000.00 of principal amount of Debentures shall be payable to FTN Financial
Capital Markets and $5.00 for each $1,000.00 of principal amount of Debentures
shall be payable to Keefe, Bruyette & Woods, Inc. Such amount shall be delivered
to the Trustee or such other person designated by the Placement Agents on the
Closing Date and shall be allocated between and paid to the respective Placement
Agents as directed by the Placement Agents.

 

2.3.2. Costs and Expenses. Whether or not this Agreement is terminated or the
sale of the Capital Securities is consummated, the Company hereby covenants and
agrees that it shall pay or cause to be paid (directly or by reimbursement) all
reasonable costs and expenses incident to the performance of the obligations of
the Offerors under this Agreement, including all fees, expenses and
disbursements of counsel and accountants for the Offerors; all reasonable
expenses incurred by the Offerors incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture, and the Guarantee; and all other
reasonable costs and expenses incident to the performance of the obligations of
the Company hereunder and under the Trust Agreement; provided, however, that
nothing in this Section 2.3.2 shall be deemed to require the Offerors to pay or
cause to be paid any of the costs or expenses of the Placement Agents and the
Purchasers incident to the performance of the obligations of the Placement
Agents and the Purchasers under this Agreement, including fees, expenses or
disbursements of counsel and accountants for the Placement Agents or the
Purchasers; any expenses incurred by the Placement Agents or the Purchasers
incident to the preparation, execution and delivery of the Trust Agreement, the
Indenture or the Guarantee; or any other costs or expenses incident to the
performance of the obligations of the Placement Agents and the Purchasers
hereunder and under the Trust Agreement, unless otherwise expressly provided by
the terms of this Agreement.

 

2.4. Failure to Close. If any of the conditions to the Closing specified in this
Agreement shall not have been fulfilled to the satisfaction of the Placement
Agents or if the Closing shall not have occurred on or before 10:00 a.m. (St.
Louis time) on the Last Closing Date, then each party hereto, notwithstanding
anything to the contrary in this Agreement, shall be relieved of all further
obligations under this Agreement without thereby waiving any rights it may have
by reason of such nonfulfillment or failure; provided, however, that the
obligations of the parties under Sections 2.3.2, 7.5 and 9 shall not be so
relieved and shall continue in full force and effect.

 

Section 3. Closing Conditions. The obligations of the Purchasers and the
Placement Agents on the Closing Date shall be subject to the accuracy, at and as
of the Closing Date, of the representations and warranties of the Offerors
contained in this Agreement, to the accuracy, at and as of the Closing Date, of
the statements of the Offerors made in any certificates pursuant to this
Agreement, to the performance by the Offerors of their respective obligations
under this Agreement, to compliance, at and as of the Closing Date, by the
Offerors with their respective agreements herein contained, and to the following
further conditions:

 

3.1. Opinions of Counsel. On the Closing Date, the Placement Agents shall have
received the following favorable opinions, each dated as of the Closing Date:
(a) from Katten Muchin Zavis Rosenman, counsel for the Offerors and addressed to
the Purchasers and the Placement Agents in substantially the form set forth on
Exhibit B-1 attached hereto and incorporated herein by this reference, (b) from
Richards, Layton & Finger, P.A., special Delaware counsel to the Offerors and
addressed to the Purchasers, the Placement Agents and the Offerors, in
substantially the form set forth on Exhibit B-2 attached hereto and incorporated
herein by this reference and (c) from Lewis, Rice & Fingersh, L.C.,

 

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special tax counsel to the Offerors, and addressed to the Placement Agents and
the Offerors, in substantially the form set forth on Exhibit B-3 attached hereto
and incorporated herein by this reference, subject to the receipt by Lewis, Rice
& Fingersh, L.C. of a representation letter from the Company in the form set
forth in Exhibit B-3 completed in a manner reasonably satisfactory to Lewis,
Rice & Fingersh, L.C. (collectively, the “Offerors’ Counsel Opinions”). In
rendering the Offerors’ Counsel Opinions, counsel to the Offerors may rely as to
factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Offerors (copies of which shall be delivered to
the Placement Agents and the Purchasers) and by government officials, and upon
such other documents as counsel to the Offerors may, in their reasonable
opinion, deem appropriate as a basis for the Offerors’ Counsel Opinions. Counsel
to the Offerors may specify the jurisdictions in which they are admitted to
practice and that they are not admitted to practice in any other jurisdiction
and are not experts in the law of any other jurisdiction. If the Offerors’
counsel is not admitted to practice in the State of New York, the opinion of
Offerors’ counsel may assume, for purposes of the opinion, that the laws of the
State of New York are substantively identical, in all respects material to the
opinion, to the internal laws of the state in which such counsel is admitted to
practice. Such Offerors’ Counsel Opinions shall not state that they are to be
governed or qualified by, or that they are 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).

 

3.2. Officer’s Certificate. At the Closing Date, the Purchasers and the
Placement Agents shall have received certificates from an authorized officer of
the Company, dated as of the Closing Date, stating that (i) the representations
and warranties of the Offerors set forth in Section 5 hereof are true and
correct as of the Closing Date and that the Offerors have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Date, (ii) since the date of this Agreement
the Offerors have not incurred any liability or obligation, direct or
contingent, or entered into any material transactions, other than in the
ordinary course of business, which is material to the Offerors, and (iii)
covering such other matters as the Placement Agents may reasonably request.

 

3.3. Administrator’s Certificate. At the Closing Date, the Purchasers and the
Placement Agents shall have received a certificate of one or more Administrators
of the Trust, dated as of the Closing Date, stating that the representations and
warranties of the Trust set forth in Section 5 are true and correct as of the
Closing Date and that the Trust has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to the
Closing Date.

 

3.4. Purchase Permitted by Applicable Laws; Legal Investment. The purchase of
and payment for the Capital Securities as described in this Agreement and
pursuant to the Subscription Agreements shall (a) not be prohibited by any
applicable law or governmental regulation, (b) not subject the Purchasers or the
Placement Agents to any penalty or, in the reasonable judgment of the Purchasers
and the Placement Agents, other onerous conditions under or pursuant to any
applicable law or governmental regulation, and (c) be permitted by the laws and
regulations of the jurisdictions to which the Purchasers and the Placement
Agents are subject.

 

3.5. Consents and Permits. The Company and the Trust shall have received all
consents, permits and other authorizations, and made all such filings and
declarations, as may be required from any person or entity pursuant to any law,
statute, regulation or rule (federal, state, local and foreign), or pursuant to
any agreement, order or decree to which the Company or the Trust is a party or
to which either is subject, in connection with the transactions contemplated by
this Agreement.

 

3.6. Sale of Purchaser Securities. Preferred Term Securities XIV, Ltd. shall
have sold securities issued by it in an amount such that the net proceeds of
such sale shall be (i) available on the Closing Date and (ii) in an amount
sufficient to purchase that portion of the Capital Securities Preferred Term
Securities XIV, Ltd. agrees to purchase pursuant to the Subscription Agreement
to be entered into

 

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by it and all other capital or similar securities contemplated to be purchased
by Preferred Term Securities XIV, Ltd. in agreements similar to this Agreement
and the Subscription Agreement to be entered into by it.

 

3.7. Information. Prior to or on the Closing Date, the Offerors shall have
furnished to the Placement Agents such further information, certificates,
opinions and documents addressed to the Purchasers and the Placement Agents,
which the Placement Agents may reasonably request, including, without
limitation, a complete set of the Operative Documents or any other documents or
certificates required by this Section 3; and all proceedings taken by the
Offerors in connection with the issuance, offer and sale of the Capital
Securities as herein contemplated shall be reasonably satisfactory in form and
substance to the Placement Agents.

 

If any condition specified in this Section 3 shall not have been fulfilled when
and as required in this Agreement, or if any of the opinions or certificates
mentioned above or elsewhere in this Agreement shall not be reasonably
satisfactory in form and substance to the Placement Agents, this Agreement may
be terminated by the Placement Agents by notice to the Offerors at any time at
or prior to the Closing Date. Notice of such termination shall be given to the
Offerors in writing or by telephone or facsimile confirmed in writing.

 

Section 4. Conditions to the Offerors’ Obligations. The obligations of the
Offerors to sell the Capital Securities to the Purchasers and consummate the
transactions contemplated by this Agreement shall be subject to the accuracy, at
and as of the Closing Date, of the representations and warranties of the
Placement Agents contained in this Agreement and to the following further
conditions:

 

4.1. Executed Agreement. The Offerors shall have received from the Placement
Agents an executed copy of this Agreement, the Subscription Agreements and the
proceeds of the transactions described in Section 1 hereof less the Placement
Agents’ compensation described in Section 2.3.1 plus the legal expense
reimbursement described in Section 11.2 hereof.

 

4.2. Fulfillment of Other Obligations. The Placement Agents shall have fulfilled
all of their other obligations and duties required to be fulfilled under this
Agreement prior to or at the Closing.

 

Section 5. Representations and Warranties of the Offerors. Except as set forth
on the Disclosure Schedule (as defined in Section 11.1) attached hereto, if any,
the Offerors jointly and severally represent and warrant to the Placement Agents
and the Purchasers as of the date hereof and as of the Closing Date as follows:

 

5.1. Securities Law Matters.

 

(a) Neither the Company nor the Trust, nor any of their “Affiliates” (as defined
in Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)), nor
any person acting on any of their behalf has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration under the Securities Act of
any of the Capital Securities, the Guarantee or the Debentures (collectively,
the “Securities”) or any other securities to be issued, or which may be issued,
by Preferred Term Securities XIV, Ltd.

 

(b) Neither the Company nor the Trust, nor any of their Affiliates, nor any
person acting on its or their behalf has (i) other than the Placement Agents,
offered for sale or solicited offers to purchase the Securities, (ii) engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D) with respect to the Securities, or (iii) engaged or will engage in
any “directed selling efforts” within the meaning of Regulation S of the
Securities Act (“Regulation S”) with respect to the Securities.

 

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(c) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under
the Securities Act.

 

(d) Neither the Company nor the Trust is or, after giving effect to the offering
and sale of the Capital Securities and the consummation of the transactions
described in this Agreement, will be an “investment company” or an entity
“controlled” by an “investment company,” in each case within the meaning of
Section 3(a) of the Investment Company Act of 1940, as amended (the “Investment
Company Act”) without regard to Section 3(c) of the Investment Company Act.

 

(e) Neither the Company nor the Trust has paid or agreed to pay to any person or
entity (other than the Placement Agents) any compensation for soliciting another
to purchase any of the Securities.

 

5.2. Organization, Standing and Qualification of the Trust. The Trust has been
duly created and is validly existing in good standing as a statutory trust under
the Delaware Statutory Trust Act (the “Statutory Trust Act”) with the power and
authority to own property and to conduct the business it transacts and proposes
to transact and to enter into and perform its obligations under the Operative
Documents. The Trust is duly qualified to transact business as a foreign entity
and is in good standing in each jurisdiction in which such qualification is
necessary, except where the failure to so qualify or be in good standing would
not have a material adverse effect on the Trust. The Trust is not a party to or
otherwise bound by any agreement other than the Operative Documents. The Trust
is and will, under current law, be classified for federal income tax purposes as
a grantor trust and not as an association taxable as a corporation.

 

5.3. Trust Agreement. The Trust Agreement has been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered by
the Company and the Administrators of the Trust, and, assuming due
authorization, execution and delivery by the Delaware Trustee and the
Institutional Trustee, will be a valid and binding obligation of the Company and
such Administrators, enforceable against them in accordance with its terms,
subject to (a) applicable bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation and other laws relating to or affecting creditors’
rights generally, and (b) general principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law) (“Bankruptcy and
Equity”). Each of the Administrators of the Trust is an employee or a director
of the Company or of a financial institution subsidiary of the Company and has
been duly authorized by the Company to execute and deliver the Trust Agreement.

 

5.4. Guarantee Agreement and the Indenture. Each of the Guarantee and the
Indenture has been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Guarantee Trustee, in the case of
the Guarantee, and by the Indenture Trustee, in the case of the Indenture, will
be a valid and binding obligation of the Company enforceable against it in
accordance with its terms, subject to Bankruptcy and Equity.

 

5.5. Capital Securities and Common Securities. The Capital Securities and the
Common Securities have been duly authorized by the Trust Agreement and, when
issued and delivered against payment therefor on the Closing Date to the
Purchasers, in the case of the Capital Securities, and to the Company, in the
case of the Common Securities, will be validly issued and represent undivided
beneficial interests in the assets of the Trust. None of the Capital Securities
or the Common Securities is subject to preemptive or other similar rights. On
the Closing Date, all of the issued and outstanding Common Securities will be
directly owned by the Company free and clear of any pledge, security interest,
claim, lien or other encumbrance.

 

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5.6. Debentures. The Debentures have been duly authorized by the Company and, at
the Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture, and, when
authenticated in the manner provided for in the Indenture and delivered against
payment therefor by the Trust, will constitute valid and binding obligations of
the Company entitled to the benefits of the Indenture enforceable against the
Company in accordance with their terms, subject to Bankruptcy and Equity.

 

5.7. Power and Authority. This Agreement has been duly authorized, executed and
delivered by the Company and the Trust and constitutes the valid and binding
obligation of the Company and the Trust, enforceable against the Company and the
Trust in accordance with its terms, subject to Bankruptcy and Equity.

 

5.8. No Defaults. The Trust is not in violation of the Trust Agreement or, to
the knowledge of the Administrators, any provision of the Statutory Trust Act.
The execution, delivery and performance by the Company or the Trust of this
Agreement or the Operative Documents to which it is a party, and the
consummation of the transactions contemplated herein or therein and the use of
the proceeds therefrom, will not conflict with or constitute a breach of, or a
default under, or result in the creation or imposition of any lien, charge or
other encumbrance upon any property or assets of the Trust, the Company or any
of the Company’s Subsidiaries (as defined in Section 5.11 hereof) pursuant to
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Trust, the Company or any of its 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 any of them is subject, except for those waived or for a conflict,
breach, default, lien, charge or encumbrance which could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect nor will
such action result in any violation of the Trust Agreement or the Statutory
Trust Act or require the consent, approval, authorization or order of any court
or governmental agency or body. As used herein, the term “Material Adverse
Effect” means any one or more effects that individually or in the aggregate are
material and adverse to the Offerors’ ability to consummate the transactions
contemplated herein or in the Operative Documents or any one or more effects
that individually or in the aggregate are material and adverse to the condition
(financial or otherwise), earnings, affairs, business, prospects or results of
operations of the Company and its Subsidiaries taken as whole, whether or not
occurring in the ordinary course of business.

 

5.9. Organization, Standing and Qualification of the Company. The Company has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of Delaware, with all requisite corporate power and authority to
own its properties and conduct the business it transacts and proposes to
transact, and is duly qualified to transact business and is in good standing as
a foreign corporation in each jurisdiction where the nature of its activities
requires such qualification, except where the failure of the Company to be so
qualified would not, singly or in the aggregate, have a Material Adverse Effect.

 

5.10. Subsidiaries of the Company. Each of the Company’s significant
subsidiaries (as defined in Section 1-02(w) of Regulation S-X to the Securities
Act (the “Significant Subsidiaries”)) is listed in Exhibit C attached hereto and
incorporated herein by this reference. Each Significant Subsidiary has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized, with all requisite power and
authority to own its properties and conduct the business it transacts and
proposes to transact, and is duly qualified to transact business and is in good
standing as a foreign entity in each jurisdiction where the nature of its
activities requires such qualification, except where the failure of any such
Significant Subsidiary to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect. All of the issued and outstanding shares of
capital stock of the Significant Subsidiaries (a) have been duly authorized and
are validly issued, (b) are fully paid and nonassessable, and (c) are wholly
owned, directly or indirectly, by the Company free and

 

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clear of any security interest, mortgage, pledge, lien, encumbrance, restriction
upon voting or transfer, preemptive rights, claim, equity or other defect.

 

5.11. Permits. The Company and each of its subsidiaries (as defined in Section
1-02(x) of Regulation S-X to the Securities Act) (the “Subsidiaries”) have all
requisite power and authority, and all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from regulatory or
governmental officials, bodies and tribunals, to own or lease their respective
properties and to conduct their respective businesses as now being conducted,
except such authorizations, approvals, orders, licenses, certificates and
permits which, if not obtained and maintained, would not, singly or in the
aggregate, have a Material Adverse Effect, and neither the Company nor any of
its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such authorizations, approvals, orders,
licenses, certificates or permits which, singly or in the aggregate, if the
failure to be so licensed or approved is the subject of an unfavorable decision,
ruling or finding, would, singly or in the aggregate, have a Material Adverse
Effect; and the Company and its Subsidiaries are in compliance with all
applicable laws, rules, regulations and orders and consents, the violation of
which would, singly or in the aggregate, have a Material Adverse Effect.

 

5.12. Conflicts, Authorizations and Approvals. Neither the Company nor any of
its Subsidiaries is in violation of its respective articles or certificate of
incorporation, charter or by-laws or similar organizational documents or in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which either the Company or any
of its 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 of its Subsidiaries is
subject, the effect of which violation or default in performance or observance
would have, singly or in the aggregate, a Material Adverse Effect.

 

5.13. Holding Company Registration and Deposit Insurance. The Company is duly
registered (i) as a bank holding company or financial holding company under the
Bank Holding Company Act of 1956, as amended, and the regulations of the Board
of Governors of the Federal Reserve System (the “Federal Reserve”) or (ii) as a
savings and loan holding company under the Home Owners’ Loan Act of 1933, as
amended, and the regulations of the Office of Thrift Supervision (the “OTS”),
and the deposit accounts of the Company’s Subsidiary depository institutions are
insured by the Federal Deposit Insurance Corporation (“FDIC”) to the fullest
extent permitted by law and the rules and regulations of the FDIC, and no
proceedings for the termination of such insurance are pending or threatened.

 

5.14. Financial Statements.

 

(a) The consolidated balance sheets of the Company and all of its Subsidiaries
as of December 31, 2003 and December 31, 2002 and related consolidated income
statements and statements of changes in shareholders’ equity for the 3 years
ended December 31, 2003 together with the notes thereto, and the consolidated
balance sheets of the Company and all of its Subsidiaries as of March 31, 2004
and the related consolidated income statements and statements of changes in
shareholders’ equity for the 3 months then ended, copies of each of which have
been provided to the Placement Agents (together, the “Financial Statements”),
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be disclosed therein) and fairly
present in all material respects the financial position and the results of
operations and changes in shareholders’ equity of the Company and all of its
Subsidiaries as of the dates and for the periods indicated (subject, in the case
of interim financial statements, to normal recurring year-end adjustments, none
of which shall be material). The books and records of the Company and all of its
Subsidiaries have been, and are being, maintained in all material respects in
accordance with generally accepted accounting principles and any other
applicable legal and accounting requirements and reflect only actual
transactions.

 

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(b) The information in the Company’s most recently filed (i) FR Y-9C filed with
the Federal Reserve if the Company is a bank holding company, (ii) FR Y-9SP
filed with the Federal Reserve if the Company is a small bank holding company or
(iii) H-(b)11 filed with the OTS if the Company is a savings and loan holding
company (the “Regulatory Report”), previously provided to the Placement Agents
fairly presents in all material respects the financial position of the Company
and, where applicable, all of its Subsidiaries as of the end of the period
represented by such Regulatory Report.

 

(c) Since the respective dates of the Financial Statements and the Regulatory
Report, there has been no material adverse change or development with respect to
the financial condition or earnings of the Company and all of its Subsidiaries,
taken as a whole.

 

(d) The accountants of the Company who certified the Financial Statements are
independent public accountants of the Company and its Subsidiaries within the
meaning of the Securities Act and the rules and regulations thereunder.

 

5.15. Exchange Act Reporting. The reports filed with the Securities and Exchange
Commission (the “Commission”) by the Company under the Securities Exchange Act
of 1934, as amended (the “1934 Act”) and the regulations thereunder at the time
they were filed with the Commission complied as to form in all material respects
with the requirements of the 1934 Act and such reports did 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, in light of the
circumstances in which they were made, not misleading.

 

5.16. Regulatory Enforcement Matters. Neither the Company nor any of its
Subsidiaries is subject or is party to, or has received any notice or advice
that any of them may become subject or party to, any investigation with respect
to, any cease-and-desist order, agreement, consent agreement, memorandum of
understanding or other regulatory enforcement action, proceeding or order with
or by, or is a party to any commitment letter or similar undertaking to, or is
subject to any directive by, or has been since January 1, 2001, a recipient of
any supervisory letter from, or since January 1, 2001, has adopted any board
resolutions at the request of, any Regulatory Agency (as defined below) that
currently restricts in any material respect the conduct of their business or
that in any material manner relates to their capital adequacy, their credit
policies, their ability or authority to pay dividends or make distributions to
their shareholders or make payments of principal or interest on their debt
obligations, their management or their business (each, a “Regulatory
Agreement”), nor has the Company or any of its Subsidiaries been advised since
January 1, 2001, by any Regulatory Agency that it is considering issuing or
requesting any such Regulatory Agreement. There is no material unresolved
violation, criticism or exception by any Regulatory Agency with respect to any
report or statement relating to any examinations of the Company or any of its
Subsidiaries. As used herein, the term “Regulatory Agency” means any federal or
state agency charged with the supervision or regulation of depository
institutions, bank, financial or savings and loan holding companies, or engaged
in the insurance of depository institution deposits, or any court,
administrative agency or commission or other governmental agency, authority or
instrumentality having supervisory or regulatory authority with respect to the
Company or any of its Subsidiaries. Neither the Company nor any of the
Subsidiaries is currently unable to pay dividends or make distributions to its
shareholders with respect to any class of its equity securities, or prohibited
from paying principal or interest on its debt obligations, due to a restriction
or limitation, whether by statute, contract or otherwise, and, in the reasonable
judgment of the Company’s management, neither the Company nor any of the
Subsidiaries will be unable in the foreseeable future to pay dividends or make
distributions with respect to any class of equity securities, or be prohibited
from paying principal or interest on its debt obligations, due to a restriction
or limitation, whether by statute, contract or otherwise.

 

5.17. No Material Change. Since December 31, 2003, there has been no material
adverse change or development with respect to the condition (financial or
otherwise), earnings, affairs, business,

 

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

prospects or results of operations of the Company or its Subsidiaries on a
consolidated basis, whether or not arising in the ordinary course of business.

 

5.18. No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any material liability, whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Company or its Subsidiaries giving rise to any such liability), except (i)
for liabilities set forth in the Financial Statements and (ii) normal
fluctuation in the amount of the liabilities referred to in clause (i) above
occurring in the ordinary course of business of the Company and all of its
Subsidiaries since the date of the most recent balance sheet included in the
Financial Statements.

 

5.19. Litigation. No charge, investigation, action, suit or proceeding is
pending or, to the knowledge of the Offerors, threatened, against or affecting
the Company or its Subsidiaries or any of their respective properties before or
by any courts or any regulatory, administrative or governmental official,
commission, board, agency or other authority or body, or any arbitrator, wherein
an unfavorable decision, ruling or finding could have, singly or in the
aggregate, a Material Adverse Effect.

 

5.20. Deferral of Interest Payments on Debentures. The Company has no present
intention to exercise its option to defer payments of interest on the Debentures
as provided in the Indenture. The Company presently believes that the likelihood
that it would exercise its right to defer payments of interest on the Debentures
as provided in the Indenture at any time during which the Debentures are
outstanding is remote because of the restrictions that would be imposed on the
Company’s ability to declare or pay dividends or distributions on, or to redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company’s capital stock and on the Company’s ability to make any payments of
principal, interest or premium on, or repay, repurchase or redeem, any of its
debt securities that rank pari passu in all respects with, or junior in interest
to, the Debentures; provided, however, the foregoing representations are based
solely upon (a) reasonably expected market conditions, (b) the present condition
(financial and otherwise), earnings, affairs, business, prospects and results of
operations of the Company and its Subsidiaries, taken as a whole, (c) the
current business plan of the Company (it being understood that such business
plan provides no projections relating to the proposed business or operations of
the Company and its Subsidiaries beyond the fiscal year ending December 31,
2008) and (d) the current status of applicable laws, rules and regulations.

 

Section 6. Representations and Warranties of the Placement Agents. Each
Placement Agent represents and warrants to the Offerors as to itself (but not as
to the other Placement Agent) as follows:

 

6.1. Organization, Standing and Qualification.

 

(a) FTN Financial Capital Markets is a division of First Tennessee Bank National
Association, a national banking association duly organized, validly existing and
in good standing under the laws of the United States, with full power and
authority to own, lease and operate its properties and conduct its business as
currently being conducted. FTN Financial Capital Markets is duly qualified to
transact business as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property or conducts its business so as
to require such qualification and in which the failure to so qualify would,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects or results of
operations of FTN Financial Capital Markets.

 

(b) Keefe, Bruyette & Woods, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York, with full
power and authority to own, lease and

 

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

operate its properties and conduct its business as currently being conducted.
Keefe, Bruyette & Woods, Inc. is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in which
it owns or leases property or conducts its business so as to require such
qualification and in which the failure to so qualify would, individually or in
the aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, business, prospects or results of operations of Keefe,
Bruyette & Woods, Inc.

 

6.2. Power and Authority. The Placement Agent has all requisite power and
authority to enter into this Agreement, and this Agreement has been duly and
validly authorized, executed and delivered by the Placement Agent and
constitutes the legal, valid and binding agreement of the Placement Agent,
enforceable against the Placement Agent in accordance with its terms, subject to
Bankruptcy and Equity and except as any indemnification or contribution
provisions thereof may be limited under applicable securities laws.

 

6.3. General Solicitation. In the case of the offer and sale of the Capital
Securities, no form of general solicitation or general advertising was or will
be used by the Placement Agent or its representatives including, but not limited
to, advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

 

6.4. Purchasers. The Placement Agent has made such reasonable inquiry as is
necessary to determine that the Purchasers are acquiring the Capital Securities
for their own accounts, except as contemplated in Section 7.8 hereto, and that
the Purchasers do not intend to distribute the Capital Securities in
contravention of the Securities Act or any other applicable securities laws.

 

6.5. Qualified Purchasers. The Placement Agent has not offered or sold and will
not arrange for the offer or sale of the Capital Securities except (i) to those
the Placement Agent reasonably believes are “accredited investors” (as defined
in Rule 501 of Regulation D), (ii) in an offshore transaction complying with
Rule 903 of Regulation S, or (iii) in any other manner that does not require
registration of the Capital Securities under the Securities Act. In connection
with each such sale, the Placement Agent has taken or will take reasonable steps
to ensure that the Purchasers are aware that (a) such sale is being made in
reliance on an exemption under the Securities Act and (b) future transfers of
the Capital Securities will not be made except in compliance with applicable
securities laws.

 

6.6. Offering Circulars. Neither the Placement Agent nor its representatives
will include any non-public information about the Company, the Trust or any of
their affiliates in any registration statement, prospectus, offering circular or
private placement memorandum used in connection with any purchase of Capital
Securities without the prior written consent of the Trust and the Company.

 

Section 7. Covenants of the Offerors. The Offerors covenant and agree with the
Placement Agents and the Purchasers as follows:

 

7.1. Compliance with Representations and Warranties. During the period from the
date of this Agreement to the earlier of the Closing Date or the Last Closing
Date, the Offerors shall use commercially reasonable efforts to cause their
representations and warranties contained in Section 5 hereof to be true as of
the Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.

 

7.2. Sale and Registration of Securities. The Offerors and their Affiliates
shall not nor shall any of them permit any person acting on their behalf (other
than the Placement Agents), to directly or indirectly (i) sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) that would or could be integrated with the sale
of the Capital Securities in a

 

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

manner that would require the registration under the Securities Act of the
Securities or (ii) make offers or sales of any such Security, or solicit offers
to buy any such Security, under circumstances that would require the
registration of any of such Securities under the Securities Act.

 

7.3. Use of Proceeds. The Trust shall use the proceeds from the sale of the
Capital Securities and the Common Securities to purchase the Debentures from the
Company.

 

7.4. Investment Company. During the period from the date of this Agreement to
the earlier of the Closing Date or the Last Closing Date, the Offerors shall not
engage, or permit any Subsidiary to engage, in any activity which would cause it
or any Subsidiary to be an “investment company” under the provisions of the
Investment Company Act.

 

7.5. Reimbursement of Expenses. If the sale of the Capital Securities provided
for herein is not consummated (i) because any condition set forth in Section 3
hereof is not satisfied, or (ii) because of any refusal, inability or failure on
the part of the Company or the Trust to perform any agreement herein or comply
with any provision hereof other than by reason of a breach by the Placement
Agents, the Company shall reimburse the Placement Agents upon demand for all of
their pro rata share of out-of-pocket expenses (including reasonable fees and
disbursements of counsel) in an amount not to exceed $50,000.00 that shall have
been incurred by them in connection with the proposed purchase and sale of the
Capital Securities. Notwithstanding the foregoing, the Company shall have no
obligation to reimburse the Placement Agents for their out-of-pocket expenses if
the sale of the Capital Securities fails to occur because the Placement Agents
fail to fulfill a condition set forth in Section 4.

 

7.6. Directed Selling Efforts, Solicitation and Advertising. In connection with
any offer or sale of any of the Securities, the Offerors shall not, nor shall
either of them permit any of their Affiliates or any person acting on their
behalf, other than the Placement Agents, to (i) engage in any “directed selling
efforts” within the meaning of Regulation S, or (ii) engage in any form of
general solicitation or general advertising (as defined in Regulation D).

 

7.7. Compliance with Rule 144A(d)(4) under the Securities Act. So long as any of
the Securities are outstanding and are “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, the Offerors will, during
any period in which they are not subject to and in compliance with Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or the Offerors are not exempt from such reporting requirements pursuant to and
in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each holder
of such restricted securities and to each prospective purchaser (as designated
by such holder) of such restricted securities, upon the request of such holder
or prospective purchaser in connection with any proposed transfer, any
information required to be provided by Rule 144A(d)(4) under the Securities Act,
if applicable. This covenant is intended to be for the benefit of the holders,
and the prospective purchasers designated by such holders, from time to time of
such restricted securities. The information provided by the Offerors pursuant to
this Section 7.7 will not, at the date thereof, contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

7.8. Transfer Notice. The Offerors acknowledge that First Tennessee Bank
National Association (“First Tennessee”) may transfer the Capital Securities
that it is purchasing, in whole or in part, at any time and from time to time
following the Closing Date by delivering the notice (the “Transfer Notice”)
attached as Exhibit B to the Master Custodian Agreement, dated May 27, 2004 and
attached as Exhibit A to the Subscription Agreement to which First Tennessee is
a party. In order to facilitate such transfer, the Company shall execute in
blank five additional Capital Securities certificates, to be delivered at
Closing, such certificates to be completed with the name of the transferee(s) to
which the Capital

 

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Securities, in whole or in part, will be transferred upon the receipt of a
Transfer Notice and authenticated by the Institutional Trustee at the time of
each such transfer.

 

7.9. Quarterly Reports. Within 50 days of the end of each calendar year quarter
and within 100 days of the end of each calendar year during which the Debentures
are issued and outstanding, the Offerors shall submit to The Bank of New York a
completed quarterly report in the form attached hereto as Exhibit D, with a copy
provided to First Tennessee during the period when it holds any of the Capital
Securities. If First Tennessee transfers the Capital Securities as contemplated
by Section 7.8, in addition to the reporting obligations of the Offerors to The
Bank of New York and First Tennessee provided for in this Section 7.9, the
Offerors shall submit to the trustee designated in the Transfer Notice such
periodic reports as may be required by such trustee in the form and at such
times as such trustee may require. The Offerors acknowledge and agree that The
Bank of New York and such designated trustee and its successors and assigns are
third party beneficiaries of this Section 7.9.

 

Section 8. Covenants of the Placement Agents. The Placement Agents covenant and
agree with the Offerors that, during the period from the date of this Agreement
to the Closing Date, the Placement Agents shall use their best efforts and take
all action necessary or appropriate to cause their representations and
warranties contained in Section 6 to be true as of Closing Date, after giving
effect to the transactions contemplated by this Agreement, as if made on and as
of the Closing Date. The Placement Agents further covenant and agree not to
engage in hedging transactions with respect to the Capital Securities unless
such transactions are conducted in compliance with the Securities Act.

 

Section 9. Indemnification.

 

9.1. Indemnification Obligation. The Offerors shall jointly and severally
indemnify and hold harmless the Placement Agents and the Purchasers and each of
their respective agents, employees, officers and directors and each person that
controls either of the Placement Agents or the Purchasers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and agents,
employees, officers and directors or any such controlling person of either of
the Placement Agents or the Purchasers (each such person or entity, an
“Indemnified Party”) from and against any and all losses, claims, damages,
judgments, liabilities or expenses, joint or several, to which such Indemnified
Party may become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Offerors), insofar as such losses, claims, damages,
judgments, liabilities or expenses (or actions in respect thereof) arise out of,
or are based upon, or relate to, in whole or in part, (a) any untrue statement
or alleged untrue statement of a material fact contained in any written
information or documentation executed in favor of, furnished or made available
to the Placement Agents or the Purchasers by the Offerors, or (b) any omission
or alleged omission to state in any written information or documentation
executed in favor of, furnished or made available to the Placement Agents or the
Purchasers by the Offerors a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
each Indemnified Party for any legal and other expenses as such expenses are
reasonably incurred by such Indemnified Party in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
judgments, liability, expense or action described in this Section 9.1. In
addition to their other obligations under this Section 9, the Offerors hereby
agree that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of, or based upon, or
related to the matters described above in this Section 9.1, they shall reimburse
each Indemnified Party on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Offerors shall be
required to make no further

 

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reimbursement payments and with respect to the applicable claim each Indemnified
Party shall promptly return any such amounts previously or thereafter received
to the Offerors together with interest, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by First Tennessee Bank National
Association (the “Prime Rate”). Any such interim reimbursement payments which
are not made to an Indemnified Party within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request.

 

9.2. Conduct of Indemnification Proceedings. Promptly after receipt by an
Indemnified Party under this Section 9 of notice of the commencement of any
action, such Indemnified Party shall, if a claim in respect thereof is to be
made against the Offerors under this Section 9, notify the Offerors in writing
of the commencement thereof; but, subject to Section 9.4, the omission to so
notify the Offerors shall not relieve them from any liability pursuant to
Section 9.1 which the Offerors may have to any Indemnified Party unless and to
the extent that the Offerors did not otherwise learn of such action and such
failure by the Indemnified Party results in the forfeiture by the Offerors of
substantial rights and defenses. In case any such action is brought against any
Indemnified Party and such Indemnified Party seeks or intends to seek indemnity
from the Offerors, the Offerors shall be entitled to participate in, and, to the
extent that they may wish, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Party (it being understood, however, that if
the claim giving rise to such indemnification obligation shall be covered by
insurance, then any panel counsel provided by the applicable insurance carrier
shall be deemed reasonably satisfactory to such Indemnified Party); provided,
however, if the defendants in any such action include both the Indemnified Party
and the Offerors and the Indemnified Party shall have reasonably concluded (upon
advice of counsel) that a material conflict exists between the positions of the
Offerors and the Indemnified Party in conducting the defense of any such action,
the Indemnified Party shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such action
on behalf of such Indemnified Party. Upon receipt of notice from the Offerors to
such Indemnified Party of their election to so assume the defense of such action
and approval by the Indemnified Party of counsel, the Offerors shall not be
liable to such Indemnified Party under this Section 9 for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof unless (i) the Indemnified Party shall have employed such
counsel in connection with the assumption of legal defenses in accordance with
the proviso in the preceding sentence (it being understood, however, that the
Offerors shall not be liable for the expenses of more than one separate counsel
representing the Indemnified Parties who are parties to such action), or (ii)
the Offerors shall not have employed counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party within a reasonable time
after notice of commencement of the action, in each of which cases the
unreasonable fees and expenses of counsel of such Indemnified Party shall be at
the expense of the Offerors.

 

9.3. Contribution. If the indemnification provided for in this Section 9 is
required by its terms, but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an Indemnified Party under Section 9.1
in respect of any losses, claims, damages, liabilities or expenses referred to
herein or therein, then the Offerors shall contribute to the amount paid or
payable by such Indemnified Party as a result of any losses, claims, damages,
judgments, liabilities or expenses referred to herein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Indemnified Party, on the other hand, from the offering of
such Capital Securities, or (ii) if the allocation provided by clause (i) above
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 Offerors, on the one hand, and the Placement Agents,
on the other hand, in connection with the statements or omissions or
inaccuracies in the representations and warranties herein or other breaches
which resulted in such losses, claims, damages, judgments, liabilities or
expenses, as well as any other relevant equitable considerations. The respective
relative benefits received by the Offerors, on the one hand, and the Placement
Agents, on the other hand, shall be deemed to be in the same proportion, in the
case of the Offerors, as the total price paid to the Offerors for the Capital
Securities sold by the Offerors

 

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to the Purchasers (net of the compensation paid to the Placement Agents
hereunder, but before deducting expenses), and in the case of the Placement
Agents, as the compensation received by them, bears to the total of such amounts
paid to the Offerors and received by the Placement Agents as compensation. The
relative fault of the Offerors and the Placement Agents shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission of a material
fact or the inaccurate or the alleged inaccurate representation and/or warranty
relates to information supplied by the Offerors or the Placement Agents and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The provisions set forth in
Section 9.2 with respect to notice of commencement of any action shall apply if
a claim for contribution is made under this Section 9.3; provided, however, that
no additional notice shall be required with respect to any action for which
notice has been given under Section 9.2 for purposes of indemnification. The
Offerors and the Placement Agents agree that it would not be just and equitable
if contribution pursuant to this Section 9.3 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in this Section 9.3. The amount paid or
payable by an Indemnified Party as a result of the losses, claims, damages,
judgments, liabilities or expenses referred to in this Section 9.3 shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. In no event shall the
liability of the Placement Agents hereunder be greater in amount than the dollar
amount of the compensation (net of payment of all expenses) received by the
Placement Agents upon the sale of the Capital Securities giving rise to such
obligation. No person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not found guilty of such fraudulent
misrepresentation.

 

9.4. Additional Remedies. The indemnity and contribution agreements contained in
this Section 9 are in addition to any liability that the Offerors may otherwise
have to any Indemnified Party.

 

9.5. Additional Indemnification. The Company shall indemnify and hold harmless
the Trust against all loss, liability, claim, damage and expense whatsoever, as
due from the Trust under Sections 9.1 through 9.4 hereof.

 

Section 10. Rights and Responsibilities of Placement Agents.

 

10.1. Reliance. In performing their duties under this Agreement, the Placement
Agents shall be entitled to rely upon any notice, signature or writing which
they shall in good faith believe to be genuine and to be signed or presented by
a proper party or parties. The Placement Agents may rely upon any opinions or
certificates or other documents delivered by the Offerors or their counsel or
designees to either the Placement Agents or the Purchasers.

 

10.2. Rights of Placement Agents. In connection with the performance of their
duties under this Agreement, the Placement Agents shall not be liable for any
error of judgment or any action taken or omitted to be taken unless the
Placement Agents were grossly negligent or engaged in willful misconduct in
connection with such performance or non-performance. No provision of this
Agreement shall require the Placement Agents to expend or risk their own funds
or otherwise incur any financial liability on behalf of the Purchasers in
connection with the performance of any of their duties hereunder. The Placement
Agents shall be under no obligation to exercise any of the rights or powers
vested in them by this Agreement.

 

Section 11. Miscellaneous.

 

11.1. Disclosure Schedule. The term “Disclosure Schedule,” as used herein, means
the schedule, if any, attached to this Agreement that sets forth items the
disclosure of which is necessary or

 

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appropriate as an exception to one or more representations or warranties
contained in Section 5 hereof; provided, except as otherwise provided in the
Disclosure Schedule, that any item set forth in the Disclosure Schedule as an
exception to a representation or warranty shall be deemed an admission by the
Offerors that such item represents an exception, fact, event or circumstance
that is reasonably likely to result in a Material Adverse Effect. The Disclosure
Schedule shall be arranged in paragraphs corresponding to the section numbers
contained in Section 5. Nothing in the Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein
unless the Disclosure Schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail. Without
limiting the generality of the immediately preceding sentence, the mere listing
(or inclusion of a copy) of a document or other item in the Disclosure Schedule
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein unless the representation or warranty has to do with the
existence of the document or other item itself. Information provided by the
Company in response to any due diligence questionnaire shall not be deemed part
of the Disclosure Schedule and shall not be deemed to be an exception to one or
more representations or warranties contained in Section 5 hereof unless such
information is specifically included on the Disclosure Schedule in accordance
with the provisions of this Section 11.1.

 

11.2. Legal Expenses. At Closing, the Placement Agents shall provide a credit
for the Offerors’ transaction-related legal expenses in the amount of
$10,000.00.

 

11.3. Non-Disclosure. Except as required by applicable law, including without
limitation securities laws and regulations promulgated thereunder or with the
prior written consent of Keefe, Bruyette & Woods, Inc. (such consent not to be
unreasonably withheld or delayed) (i) the Offerors shall not, and will cause
their advisors and representatives not to, issue any press release or other
public statement regarding the transactions contemplated by this Agreement or
the Operative Documents prior to or on the Closing Date and (ii) following the
Closing Date, the Offerors shall not include in any press release, other public
statement or other communication regarding the transactions contemplated by this
Agreement or the Operative Documents, any reference to the Placement Agents,
WTC, the Purchaser, the term “PreTS” or any derivations thereof, or the terms
and conditions of this Agreement or the Operative Documents. Notwithstanding
anything to the contrary, the Offerors may (1) consult any tax advisor regarding
U.S. federal income tax treatment or tax structure of the transaction
contemplated under this Agreement and the Operative Documents and (2) disclose
to any and all persons, without limitation of any kind, the U.S. Federal income
tax structure (in each case, within the meaning of Treasury Regulation §
1.6011-4) of the transaction contemplated under this Agreement and the Operative
Documents and all materials of any kind (including opinions or other tax
analyses) that are provided to you relating to such tax treatment and tax
structure. For this purpose, “tax structure” is limited to any facts relevant to
the U.S. federal income tax treatment of the transaction and does not include
information relating to identity of the parties.

 

11.4. Notices. Prior to the Closing, and thereafter with respect to matters
pertaining to this Agreement only, all notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier or overnight air courier guaranteeing next
day delivery:

 

if to the Placement Agents, to:

 

FTN Financial Capital Markets

845 Crossover Lane, Suite 150

Memphis, Tennessee 38117

 

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Telecopier: 901-435-4706

Telephone: 800-456-5460

Attention: James D. Wingett

 

and

 

Keefe, Bruyette & Woods, Inc.

787 7th Avenue

4th Floor

New York, New York 10019

Telecopier: 212-403-2000

Telephone: 212-403-1004

Attention: Mitchell Kleinman, General Counsel

 

with a copy to:

 

Lewis, Rice & Fingersh, L.C.

500 North Broadway, Suite 2000

St. Louis, Missouri 63102

Telecopier: 314-241-6056

Telephone: 314-444-7600

Attention: Thomas C. Erb, Esq.

 

and

 

Sidley Austin Brown & Wood LLP

787 7th Avenue

New York, New York 10019

Telecopier: 212-839-5599

Telephone: 212-839-5300

Attention: Renwick Martin, Esq.

 

if to the Offerors, to:

 

Taylor Capital Group, Inc.

9550 West Higgins Road

Rosemont, Illinois 60018

Attention: Robin Van Castle

Telecopy: 847-653-7865

 

with a copy to:

 

Katten Muchin Zavis Rosenman

525 West Monroe Street

Chicago, Illinois 60661

Telecopier: 312-577-8881

Telephone: 312-902-5545

Attention: Steven Shapiro

 

All such notices and communications shall be deemed to have been duly given (i)
at the time delivered by hand, if personally delivered, (ii) five business days
after being deposited in the mail,

 

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postage prepaid, if mailed, (iii) when answered back, if telexed, (iv) the next
business day after being telecopied, or (v) the next business day after timely
delivery to a courier, if sent by overnight air courier guaranteeing next day
delivery. From and after the Closing, the foregoing notice provisions shall be
superseded by any notice provisions of the Operative Documents under which
notice is given. The Placement Agents, the Offerors, and their respective
counsel, may change their respective notice addresses from time to time by
written notice to all of the foregoing persons.

 

11.5. Parties in Interest, Successors and Assigns. Except as expressly set forth
herein, this Agreement is made solely for the benefit of the Placement Agents,
the Purchasers and the Offerors and any person controlling the Placement Agents,
the Purchasers or the Offerors and their respective successors and assigns; and
no other person shall acquire or have any right under or by virtue of this
Agreement. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties.

 

11.6. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

 

11.7. Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

 

11.8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS OF
LAWS) OF THE STATE OF NEW YORK.

 

11.9. Entire Agreement. This Agreement, together with the Operative Documents
and the other documents delivered in connection with the transactions
contemplated by this Agreement, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, together with the Operative Documents and the other
documents delivered in connection with the transaction contemplated by this
Agreement, supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

 

11.10. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Placement Agents’ and the Purchasers’ rights and
privileges shall be enforceable to the fullest extent permitted by law.

 

11.11. Survival. The Placement Agents and the Offerors, respectively, agree that
the representations, warranties and agreements made by each of them in this
Agreement and in any certificate or other instrument delivered pursuant hereto
shall remain in full force and effect and shall survive the delivery of, and
payment for, the Capital Securities.

 

Signatures appear on the following page

 

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If this Agreement is satisfactory to you, please so indicate by signing the
acceptance of this Agreement and deliver such counterpart to the Offerors
whereupon this Agreement will become binding between us in accordance with its
terms.

 

Very truly yours,

TAYLOR CAPITAL GROUP, INC. By:   /s/    BRUCE W. TAYLOR        

Name:

  Bruce W. Taylor

Title:

  President & CEO

 

TAYC CAPITAL TRUST II By:   /s/    BRUCE W. TAYLOR        

Name:

  Bruce W. Taylor

Title:

  Administrator

 

CONFIRMED AND ACCEPTED,

as of the date first set forth above

FTN FINANCIAL CAPITAL MARKETS,

a division of First Tennessee Bank National Association,

as a Placement Agent

By:   /s/    JAMES D. WINGETT        

Name:

  James D. Wingett

Title:

  Senior Vice President

 

KEEFE, BRUYETTE & WOODS, INC.,

a New York corporation, as a Placement Agent

By:   /s/    PETER J. WIRTH        

Name:

  Peter J. Wirth

Title:

  Managing Director

 

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Certain schedules, exhibits and similar attachments to this Agreement have not
been filed with this exhibit. The Registrant agrees to furnish supplementally
any omitted schedule, exhibit or similar attachment to the Securities and
Exchange Commission upon request.