EXHIBIT 10.2

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of September 4,
2008, is by and among Taylor Capital Group, Inc., a Delaware corporation (the
“Company”), and each of the investors listed on the Schedule of Buyers attached
hereto (each individually, a “Buyer” and collectively, the “Buyers”). Certain of
the capitalized terms used but not defined herein have the meanings assigned to
them in Exhibit A (which is incorporated herein by reference).

WHEREAS:

A. The Company and each Buyer is executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by
Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act.

B. The Company’s board of directors (with each of Bruce Taylor, Jeffrey Taylor,
Mark Hoppe and M. Hill Hammock abstaining and not participating in such vote)
(the “Board”) has approved and recommended to the Company’s stockholders the
adoption of a Third Amended and Restated Certificate of Incorporation of the
Company (the “Restated Charter”), a copy of which is attached hereto as Exhibit
B, that, among other things, will designate a new series of convertible
preferred stock of the Company as Series A Non-Cumulative Convertible Perpetual
Preferred Stock (the “Preferred Shares”), which Preferred Shares shall be
convertible into shares of the Company’s common stock, par value $0.01 per share
(the “Common Stock”), in accordance with the terms included in the Restated
Charter.

C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this Agreement, that aggregate number of Preferred
Shares set forth opposite such Buyer’s name in column (3) on the Schedule of
Buyers (which aggregate number for all Buyers shall be 2,400,000 Preferred
Shares).

D. Contemporaneously with the execution and delivery of this Agreement, certain
of the parties hereto, along with members of the Taylor family, are executing
and delivering a Voting Agreement, substantially in the form attached hereto as
Exhibit C (the “Voting Agreement”).

E. The Board (with each of Bruce Taylor, Jeffrey Taylor, Mark Hoppe and M. Hill
Hammock abstaining and not participating in such vote) has approved the
Certificate of Designation, a copy of which is attached hereto as Exhibit E (the
“Designated Preferred Certificate of Designation”), that, among other things,
will designate a new series of convertible preferred stock of the Company as
Series B Convertible Preferred Stock (the “Designated Preferred”), which
Designated Preferred may be issued in the event of a Potential Delay (as defined
in Section 4(c)).

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F. The Preferred Shares, Designated Preferred (if issued hereunder) and the
shares of Common Stock issuable upon conversion of the Preferred Shares and the
Designated Preferred (the “Conversion Shares”) are collectively referred to
herein as the “Securities”.

G. As of the date hereof, the Company is seeking to effect a private placement
of $60 million of subordinated bank notes issued by Cole Taylor Bank, a
wholly-owned subsidiary of the Company (the “Bank”), and warrants to acquire
Common Stock on substantially the terms attached hereto as Exhibit D (the
“Subdebt and Warrant Transaction”).

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF PREFERRED STOCK.

(a) Preferred Shares. Subject to the satisfaction (or waiver) of the conditions
set forth in Section 6 below, the Company shall issue and sell to each Buyer,
and each Buyer severally, but not jointly, agrees to purchase from the Company
on the Closing Date (as defined below) the number of Preferred Shares as is set
forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, all on
the terms set forth herein.

(b) Closing. The closing of the acquisition of the Preferred Shares (or in the
case of a Potential delay, the Designated Preferred) (the “Closing”) by the
Buyers shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe
Street, Chicago, Illinois 60661. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., Chicago time, on the third Business Day after the
satisfaction (or waiver) of the conditions to the Closing set forth in Section 6
below (other than any such condition required to be satisfied at the Closing) or
such other date and time as is mutually agreed to by the Company and a Majority
of Holders (as defined herein) not more than ten Business Days after such
satisfaction (or waiver) of the conditions to the Closing. At the Closing, the
Company and the Buyers shall make certain deliveries, as specified herein, and
all such deliveries, regardless of chronological sequence, shall be deemed to
occur contemporaneously and simultaneously on the occurrence of the last
delivery and none of such deliveries shall be effective until the last of the
same has occurred.

(c) Purchase Price. The aggregate purchase price for the Preferred Shares to be
purchased by each Buyer (the “Purchase Price”) shall be the amount set forth
opposite such Buyer’s name in column (4) on the Schedule of Buyers. Each Buyer
shall pay $25.00 for each Preferred Share to be purchased by such Buyer at the
Closing.

(d) Purchase and Sale of Preferred Shares. On the Closing Date, against payment
therefor in accordance with Section 1(e) hereof, the Company shall deliver to
each Buyer the Preferred Shares in such denominations as is set forth opposite
such Buyer’s name in column (3) on the Schedule of Buyers, each duly executed on
behalf of the Company and registered in the name of such Buyer or its designees.

 

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(e) Deposit of Purchase Price. As soon as practicable, but in any event, within
two Business Days after written notice of (i) the satisfaction (or waiver) of
the conditions to the Closing set forth in Section 6 below, or (ii) such earlier
date as is mutually agreed to by the Company and a Majority of Holders that is
not more than five Business Days prior to the expected Closing Date, each Buyer
shall deposit, or cause to be deposited, into an account established at ABA #
065000090, Federal Reserve Bank of New Orleans, n/o Capital One NO/Trust, Acct.
# 38500 20002515, f/f/c KBW Escrow Acct #75N028024, 265 Broadhollow Road,
Melville, New York 11747, or such other escrow account as may be designated in
such notice by the Company’s financial advisor, Keefe, Bruyette & Woods, Inc.,
pursuant to wire transfer instructions set forth in such notice, cash in the
amount necessary for the payment of its portion of the Purchase Price as set
forth on the Schedule of Buyers. If the Closing has not occurred within ten
Business Days after such funds are so deposited, the funds so deposited by each
Buyer will be promptly refunded to such Buyer upon request.

2. BUYER’S REPRESENTATIONS AND WARRANTIES. Each Buyer represents and warrants
with respect to itself only that:

(a) Organization; Authority; Legal Capacity.

(i) If such Buyer is a legal entity, such Buyer is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with, subject to the receipt of any required Bank Regulatory
Approvals, the requisite power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents (as defined below) to
which it is a party and otherwise to carry out its obligations hereunder and
thereunder.

(ii) If such Buyer is a natural Person, such Buyer has the legal capacity and,
subject to the receipt of any required Bank Regulatory Approvals, the right to
execute, deliver, enter into, consummate and perform the transactions
contemplated by the Transaction Documents to which it is a party and otherwise
to carry out its obligations hereunder and thereunder.

(b) Validity; Enforcement. This Agreement and the other Transaction Documents to
which such Buyer is or will be a party have been duly and validly authorized on
behalf of such Buyer. This Agreement has been duly executed and delivered by
such Buyer, and each other Transaction Document to which such Buyer is a party,
when executed and delivered as contemplated herein, will have been duly executed
and delivered by such Buyer, and, subject to the receipt of any required Bank
Regulatory Approvals, this Agreement constitutes, and each other Transaction
Document to which such Buyer is a party upon execution and delivery thereof by
such Buyer will constitute, the legal, valid and binding obligation of such
Buyer, enforceable against such Buyer in accordance with its respective terms,
except as such enforceability may be limited by general principles of equity or
to applicable bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies or as
indemnification or contribution pursuant to the Registration Rights Agreement or
the Restated Charter may be limited by the federal securities or banking laws or
any public policy relating thereto.

 

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(c) No Conflicts. The execution, delivery and performance by such Buyer of this
Agreement and the other Transaction Documents to which such Buyer is a party and
the consummation by such Buyer of the Transactions will not (i) if Buyer is a
Business Entity, result in a violation of the Organizational Documents of such
Buyer or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which such Buyer is a party, or
(iii) subject to receipt of any Bank Regulatory Approvals, result in a violation
of any Requirement of Law applicable to such Buyer, except in the case of
clauses (ii) and (iii) above, for such for such defaults, terminations,
amendments, accelerations, cancellations, or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the Transactions or the authority or ability of such Buyer to
perform its obligations under the Transaction Documents.

(d) No Public Sale or Distribution. Such Buyer is (i) acquiring the Preferred
Shares and (ii) upon conversion of the Preferred Shares will acquire the
Conversion Shares, in each case, for its own account and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempt from registration under
the 1933 Act. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person to resell or distribute any of the
Securities. Such Buyer is not a broker-dealer (registered or otherwise) or an
Affiliate of a broker-dealer.

(e) Accredited Investor Status. Such Buyer is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D (which definition includes any
director or executive officer of the Company) on the basis set forth on the
signature page hereto executed by such Buyer. Such Buyer has such knowledge and
experience in financial and business matters that Such Buyer is capable of
evaluating the merits and risks of its investment in the Securities.

(f) No General Solicitation. Such Buyer has not received nor is it aware of any
general solicitation or general advertising of the Securities, including,
without limitation, (i) any communication published in any newspaper or magazine
or broadcast or disseminated over television, radio or the internet, or (ii) any
seminar or meeting to which people were invited by means of a general
solicitation or general advertising.

(g) Reliance on Exemptions. Such Buyer understands that the Securities are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire the
Securities.

 

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(h) Information. Such Buyer has been furnished with materials relating to the
business, finances and operations of the Company, including information
concerning the Bank, and materials relating to the offer and sale of the
Securities that have been requested by such Buyer. Such Buyer has been afforded
the opportunity to ask questions of the Company, and has reviewed and considered
carefully all information it deems relevant in making an informed decision to
purchase the Securities. Such Buyer has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment decision
with respect to its acquisition of the Securities. Such Buyer understands that
its investment in the Securities involves a high degree of risk.

(i) No Governmental Review. Such Buyer understands that no Governmental
Authority has passed on or made any recommendation or endorsement of the
Securities or the fairness or suitability of the investment in the Securities
nor has any such Governmental Authority passed upon or endorsed the merits of
the offering of the Securities, which are not deposits and are not insured by
the Federal Deposit Insurance Corporation (“FDIC”).

(j) Transfer or Resale. Such Buyer understands that, except as provided in the
Registration Rights Agreement: (i) the Securities have not been and are not
being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder; or (B) such Buyer shall have delivered to the Company an
opinion of counsel, in a form reasonably acceptable to the Company and its
counsel, to the effect that such Securities to be sold, assigned or transferred
are being sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the 1933 Act (or a successor rule thereto) (collectively,
“Rule 144”), or any other exemption from such registration; (ii) any sale of the
Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the
Securities under circumstances in which the seller (or the Person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other Person is under any obligation to register the Securities
under the 1933 Act or any state securities laws.

(k) Legends.

(i) Such Buyer understands that the certificates or other instruments
representing the Preferred Shares and the stock certificates representing the
Conversion Shares, except as set forth below, shall bear the following legend
(and a stop transfer order consistent therewith may be placed against transfer
of such share certificates):

[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN][THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR

 

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APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY AND ITS COUNSEL, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped or issue to such holder by electronic delivery at the applicable balance
account at The Depository Trust Company (“DTC”), if, unless otherwise required
by state securities laws, (A) such Securities are sold pursuant to an effective
registration statement under the 1933 Act in accordance with the plan of
distribution contained therein, or (B) in connection with a sale, assignment or
other transfer, such holder provides the Company with an opinion of counsel, in
a form reasonably acceptable to the Company and its counsel, to the effect that
(I) such sale, assignment or transfer of such Securities has been made under the
applicable requirements of Rule 144, or (II) such holder is not an Affiliate of
the Company and that for purposes of any sale by such holder of such Securities,
the applicable conditions of Rule 144 have been satisfied as set forth in
paragraph (b)(1)(i) thereof and with the requirement for compliance with
paragraph (c)(i) thereof.

(ii) Such Buyer further understands that until the Stockholder Approval Date,
the certificates or other instruments representing the Preferred Shares shall
bear the following additional legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONVERTED UNTIL THE
STOCKHOLDER APPROVAL DATE (AS DEFINED IN THE SECURITIES PURCHASE AGREEMENT,
DATED AUGUST [    ], 2008, BY AND AMONG THE COMPANY AND THE BUYERS PARTY
THERETO).

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of such Securities upon request at
any time following the Stockholder Approval Date.

(l) Residency. Such Buyer is a resident of that jurisdiction set forth opposite
such Buyer’s name in column (2) on the Schedule of Buyers.

(m) Certain Trading Activities. Such Buyer has not directly or indirectly, nor
to such Buyer’s knowledge has any Person who is subject to the direction or
control of such Buyer and who is acting on behalf of or pursuant to any
understanding with such Buyer, (i) engaged in any Short Sales (as defined below)
involving the Company’s securities) since the date that such Buyer first became
aware of the transactions contemplated hereby, or (ii) traded in securities of
the Company while aware of material non-public information regarding the Company
or its securities. For purposes of this Section, “Short Sales” include, without

 

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limitation, all “short sales” as defined in Rule 200 of Regulation SHO adopted
under the Securities Exchange Act of 1934, as amended (the “1934 Act”), and all
types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker-dealers or
foreign regulated brokers having the effect of hedging the securities of the
Company or the investment contemplated under this Agreement. Such Buyer
covenants that neither it, nor any person who is subject to the direction or
control of such Buyer and who is acting on its behalf or pursuant to any
understanding with it, will (i) engage in any Short Sales prior to the filing of
the 8-K Filing (as defined below), or (ii) trade in securities of the Company
while aware of material non-public information regarding the Company or its
securities. Notwithstanding the foregoing to the contrary, any Short Sales or
trades in securities of the Company occurring in any ETF or index fund, or
effected by an investment adviser, investment company or pooled investment
vehicle, or other Person that is not effected at the direction of such Buyer
shall not be deemed a breach of any provision of this subsection (m).

(n) No Other Agreements. Other than as contemplated by the Transaction
Documents, such Buyer has not, directly or indirectly, entered into any contract
or agreement with any other Buyer, any executive officer of the Company, any
member of the Board, or to the knowledge of such Buyer, any Affiliate of any
such persons, with respect to, or otherwise in connection with, the
Transactions.

(o) Bank Regulatory Approvals. Such Buyer knows of no reason why such Buyer
should not be able to obtain such consents or approvals, if any, required to be
obtained by Buyer from the Federal Reserve Board, the FDIC, or the Illinois
Department of Financial and Professional Regulation (the “DFPR”, together with
the Federal Reserve Board and the FDIC, the “Bank Regulatory Authorities”) with
respect to the transactions contemplated by this Agreement, and such Buyer has
not been rejected as an applicant for control, either individually or as part of
any control application or notice, nor has such Buyer been asked by any Bank
Regulatory Authority to withdraw any such control application or notice.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to each of the Buyers as set forth below, except (i) to the extent set
forth in the disclosure schedules hereto delivered to each of the Buyers prior
to the execution of this Agreement, and (ii) other than with respect to Sections
3(a), (b), (c), (d), (e) and (z) of this Agreement, to the extent disclosed in a
Company SEC Report filed by the Company with, or furnished by the Company to,
the SEC after December 31, 2007 and at least two Business Days prior to the date
of this Agreement, and publicly available as of the date of this Agreement
(excluding any cautionary, predictive or forward-looking statements set forth in
any section of such Company SEC Reports, including “Risk Factors” and
“Cautionary Note Regarding Forward-Looking Statements”) (the “Available Company
SEC Documents”). Each exception set forth in a disclosure schedule is identified
by reference to, or has been grouped under a heading referring to, a specific
individual section or subsection of this Agreement and relates only to such
section or subsection; provided, however, that the inclusion of any item

 

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referenced in one section or subsection shall be deemed to refer to any other
section or subsection, whether or not an explicit cross-reference appears, to
the extent that the applicability of such item to the other section is readily
apparent.

(a) Organization and Qualification. Except as set forth on Schedule (3)(a), the
Company and each of the Subsidiaries (i) have been duly incorporated or
organized and are validly existing in good standing under the laws of their
respective jurisdictions of incorporation or organization, and (ii) are duly
qualified to conduct business and are in good standing as foreign corporations
or organizations in each jurisdiction in which their respective ownership or
lease of property or the nature of their respective businesses requires such
qualification, except where the failure to be so qualified would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect. True and correct copies of the Organizational Documents of the Company
and each of the Subsidiaries, as amended and currently in effect, have been made
available by the Company to the Buyers. The Company and each of the Subsidiaries
has all requisite power and authority to carry on the businesses in which it is
engaged (as described in the Available Company SEC Documents) and to own or
lease its properties.

(b) Bank Holding Company; State Banking Corporation Status. The Company is duly
registered as a bank holding company under the Bank Holding Company Act of 1956,
as amended, and meets in all material respects the applicable requirements for
qualification as such. The Bank holds the requisite authority from the DFPR to
conduct business as a state-chartered banking corporation under the laws of the
State of Illinois.

(c) Authorized Capital Stock.

(i) The authorized capital stock of the Company consists of: (A) 18,000,000
shares of Common Stock, and (B) 5,000,000 shares of preferred stock, none of
which are issued and outstanding. As of the date of this Agreement, of the
shares of Common Stock currently authorized: (x) 11,011,184 shares are
outstanding, (y) 2,773,243 shares are reserved for issuance pursuant to the
Taylor Capital Group, Inc. 2002 Incentive Compensation Plan, and (z) no shares
were reserved for issuance pursuant to securities (other than the Preferred
Shares and the Designated Preferred) exercisable or exchangeable for, or
convertible into, shares of Common Stock.

(ii) In the event the Preferred Shares are issued at the Closing, upon filing
the Restated Charter the authorized capital stock of the Company shall consist
of: (A) 45,000,000 shares of Common Stock, and (B) 10,000,000 shares of
preferred stock, 2,400,000 of which shall be designated as the Preferred Shares.
In the event the Preferred Shares are issued upon mandatory exchange for the
Designated Preferred, upon filing the Restated Charter the authorized capital
stock of the Company shall consist of: (A) 45,000,000 shares of Common Stock,
and (B) 10,000,000 shares of preferred stock, 2,400,000 of which shall be
designated as Preferred Shares and 2,400,000 of which shall be designated as the
Designated Preferred.

(iii) If a Potential Delay occurs and the Designated Preferred is issued at the
Closing, upon filing of the Designated Preferred Certificate of Designation, the
authorized

 

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capital stock of the Company shall consist of: (A) 18,000,000 shares of Common
Stock, and (B) 5,000,000 shares of preferred stock, 2,400,000 of which shall be
designated as the Designated Preferred.

(iv) Except as disclosed on Schedule 3(c)(iv), there are no (A) outstanding
Convertible Securities or options, warrants or other rights exercisable for the
purchase of any shares of Capital Stock or Convertible Securities (“Stock
Purchase Rights”), (B) stock appreciation rights, performance stock awards or
other employee incentive awards the value of which is determined by reference to
the value of the Common Stock or (C) other agreements or commitments obligating
the Company or any of its Subsidiaries to issue, sell, repurchase, redeem or
otherwise acquire any shares of Capital Stock, Convertible Securities, Stock
Purchase Rights or any securities of any Subsidiary. The issuance of the
Preferred Shares and Conversion Shares as contemplated herein will not cause the
number of shares of Common Stock issuable pursuant to any outstanding
Convertible Securities or Stock Purchase Rights to increase as a result of any
anti-dilution provisions relating thereto. There are no authorized or
outstanding bonds, debentures, notes or other obligations of the Company the
holders of which have the right to vote with the holders of Common Stock on any
matter.

(v) All outstanding shares of Capital Stock (including any outstanding
restricted stock) have been duly authorized and validly issued and are
fully-paid and nonassessable and have been offered and issued without violation
of any preemptive rights of any Person or any applicable registration
requirements of applicable securities laws. All outstanding Stock Purchase
Rights have been issued in compliance, in all material respects, with any
applicable registration requirements of applicable securities laws, and all
shares of Common Stock issued upon exercise thereof will have been, upon such
issuance, duly authorized and validly issued without violation of any preemptive
rights of any Person and will be fully-paid and nonassessable.

(vi) Except for Exhibits 9.1, 9.2 and 9.3 to the Company’s most recent Form 10-K
included in the Available Company SEC Documents, and the Voting Agreement
contemplated hereby, there are no voting trusts, proxies or other agreements to
which the Company or, to the Knowledge of the Company any of its executive
officers or directors, is a party or by which it is bound with respect to the
voting of any shares of Capital Stock affecting the voting of any shares of
Capital Stock.

(vii) Except for Exhibit 4.16 to the Company’s most recent Form 10-K included in
the Available Company SEC Documents, and the Registration Rights Agreement
contemplated hereby, there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act.

(viii) There are no outstanding securities or instruments of the Company or any
of its Subsidiaries which contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem any security
of the Company or any equity security, or security convertible into or
exercisable for, any equity security of any of its Subsidiaries.

 

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(d) Authorization; Enforcement; Validity. Subject to receipt of the Stockholder
Approval (prior to the issuance of the Preferred Shares) and any required Bank
Regulatory Approvals, and the filing with the Secretary of State of Delaware of
the Restated Charter (prior to the issuance of the Preferred Shares) and the
Designated Preferred Certificate of Designation (if the Designated Preferred is
issued hereunder), the Company has the requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement, the
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions (as
defined below), the Voting Agreement, the Management Services Agreement, the FIC
Warrant, the Restated Charter, the Designated Preferred Certificate of
Designation (if the Designated Preferred is issued hereunder) and each of the
other agreements entered into by the Company in connection with the transactions
contemplated by this Agreement (collectively, the “Transaction Documents”) and
to consummate the Transactions. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
Transactions including, without limitation, the issuance of the Preferred Shares
(whether at the Closing or upon mandatory exchange of the Designated Preferred),
the issuance of the Designated Preferred (if any), and the reservation for
issuance and the issuance of the Conversion Shares issuable upon conversion of
the Preferred Shares and the Designated Preferred (if issued hereunder), have
been duly authorized by the Board and, other than as described at the beginning
of this Section 3(d), no further corporate action on the part of the Company is
required in connection therewith. Except as disclosed on Schedule 3(d) or as
otherwise specified in this Section 3(d), no filing, consent, or authorization
is required by the Company, the Board or its stockholders with respect to the
Transactions. Subject to the receipt of any required Bank Regulatory Approvals
and the receipt of the Stockholder Approval (prior to the issuance of the
Preferred Shares), this Agreement and the Voting Agreement have been duly
executed and delivered by the Company and constitute, and, upon execution and
delivery thereof by the Company as contemplated herein, each of the other
Transaction Documents to which the Company is a party will constitute, legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity, applicable bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies or as indemnification or contribution may be limited by the
securities laws and public policy relating thereto.

(e) Issuance of Securities. Upon issuance to the Buyers, the Preferred Shares
(whether issued at the Closing or upon mandatory exchange of the Designated
Preferred) and the Designated Preferred (if issued hereunder) will have been
duly authorized and validly issued without violation of the preemptive rights of
any Person and will be fully-paid and nonassessable, free and clear of any
Liens, taxes or charges with respect to the use thereof and shall be entitled to
the rights and preferences set forth in the Restated Charter and the Designated
Preferred Certificate of Designation, respectively. As of the Closing, a number
of shares of Common Stock shall have been duly authorized and reserved for
issuance as Conversion Shares which equals at least the maximum number of shares
of Common Stock then issuable upon conversion of the Preferred Shares purchased
by the Buyers pursuant to this Agreement. Upon issuance or conversion in
accordance with the Restated Charter or the Designated Preferred

 

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Certificate of Designation, the Conversion Shares will be validly issued, fully
paid and nonassessable and free from all preemptive (except as set forth in the
Restated Charter) or similar rights, taxes, Liens or charges with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock. Subject to the accuracy of the representations and
warranties of the Buyers in this Agreement, the offer, sale and issuance of the
Securities hereunder is exempt from registration under the 1933 Act (pursuant to
the exemption provided by Section 4(2) thereof) and all applicable state
securities laws.

(f) No Defaults or Consents.

(i) Subject to receipt of the Stockholder Approval (prior to the issuance of the
Preferred Shares) and any required Bank Regulatory Approvals, and the filing
with the Secretary of State of the State of Delaware of the Restated Charter
(prior to the issuance of the Preferred Shares), neither the execution, delivery
or performance of this Agreement or any of the other Transaction Documents by
the Company nor the consummation of any of the Transactions will (A) conflict
with or violate any provision of the Second Amended and Restated Certificate of
Incorporation of the Company or the Second Amended and Restated Bylaws of the
Company (the “Bylaws”) or any Organizational Document of any of the
Subsidiaries, (B) except as set forth on Schedule 3(f)(i)(B), result in a breach
of, constitute (with or without due notice or lapse of time or both) a default
under, violate, result in the acceleration of, create in any party any right to
accelerate, terminate, modify or cancel, or require any notice, consent,
approval or waiver under, any material Contractual Obligation or any Requirement
of Law material to the operation of the Company or any of the Subsidiaries or
any of their respective properties and assets; (C) result in the imposition of
any Lien upon any material properties or assets of the Company or any of the
Subsidiaries, which Lien would materially detract from the value or materially
interfere with the use of such properties or assets, (D) result in the Company
or any Subsidiary being required to redeem, repurchase or otherwise acquire any
outstanding equity or debt interests, securities or obligations in the Company
or any of the Subsidiaries or any options or other rights exercisable for any of
same, or (E) except as set forth on Schedule 3(f)(i)(E), cause the accelerated
vesting of any employee stock options or restricted stock awards.

(ii) Neither the Company nor any of the Subsidiaries is required to obtain any
consent, authorization or approval of, or make any filing, notification or
registration with, any Governmental Authority or any self-regulatory
organization in order for the Company to execute, deliver and perform this
Agreement and each of the other Transaction Documents and to consummate the
Transactions (“Company Approvals”).

(iii) Except as disclosed on Schedule 3(f)(iii), no Contractual Consents are
required to be obtained under any Contractual Obligation applicable to the
Company or any Subsidiary, delivery or performance of this Agreement or the
other Transaction Documents or the consummation of any of the Transactions which
if not obtained would reasonably be expected, individually or in the aggregate
to have a Material Adverse Effect (“Company Contractual Consents”).

(g) Deposit Accounts. Depending on their nature and size, the deposit accounts
of the Bank are insured up to the regulatory maximum amount provided by the FDIC
and no proceedings for the modification, termination or revocation of any such
insurance are pending or, to the knowledge of the Company, threatened or
contemplated.

 

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(h) Governmental and Regulatory Proceedings. There is no Action or Proceeding to
which the Company or any of the Subsidiaries is a party pending or, to the
Knowledge of the Company, threatened or contemplated, before any Governmental
Authority, Regulatory Agency or self-regulatory organization (i) that challenges
the validity or propriety of any of the Transactions or (ii) if determined
adversely to the Company or any Subsidiary would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. To the
Knowledge of the Company, no executive officer, director or employee of the
Company or any of the Subsidiaries is the subject of any Action or Proceeding
involving a claim of material breach of fiduciary duty relating to the Company
or any of the Subsidiaries or is or may be permanently or temporarily enjoined
by any order, judgment or decree of any Governmental Authority or
self-regulatory organization from engaging in or continuing to conduct any of
the businesses of the Company or any Subsidiary. Since January 1, 2006, the
Company has not received a stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the 1934
Act or the 1933 Act and, to the Knowledge of the Company, the SEC has not issued
any such order since such date. No order, judgment or decree of any Governmental
Authority, Regulatory Agency or self-regulatory organization has been issued in
any Action or Proceeding to which the Company or any of the Subsidiaries is or
was a party that would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.

(i) No Restrictions. Except as set forth on Schedule 3(i), neither the Company
nor any of the Subsidiaries is currently prohibited, directly or indirectly,
under any order of the Federal Reserve Board (other than orders, regulations or
policy statements applicable to bank holding companies and their subsidiaries
generally), or any agreement or other instrument to which it is a party or is
subject, from paying any dividends, from making any other distribution on its
capital stock, from repaying any loans or advances or from transferring any of
its properties or assets.

(j) Absence of Certain Changes or Events. Since December 31, 2007, (i) there has
not been any Material Adverse Effect or any event, condition, change or
development, or worsening of any existing event, condition, change or
development that would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, (ii) the Company and the Subsidiaries have
conducted their respective businesses only in the ordinary course consistent
with past practices, and (iii) neither the Company nor any of its Subsidiaries
has revalued any material assets of the Company or any Subsidiary resulting in a
material impairment charge. Since December 31, 2007, neither the Company nor any
of the Company Subsidiaries has (i) made or declared any distribution in cash or
in kind to its stockholders, (ii) sold or otherwise disposed of any material
asset outside of the ordinary course of business, or (iii) except as disclosed
in Schedule 3(j)(iii), made or committed to make capital expenditures in excess
of $1,000,000 with respect to any individual expenditure or in excess of
$6,000,000 million for all capital expenditures in the aggregate. Neither the
Company nor any of the Subsidiaries has taken any steps to seek protection
pursuant to any bankruptcy law nor does the

 

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Company have any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings or any actual knowledge of any fact
which would reasonably lead a creditor to do so. The Company and the
Subsidiaries, individually and on a consolidated basis, are not as of the date
hereof, and after giving effect to the transactions contemplated hereby to occur
at the Closing will not be, Insolvent.

(k) Governmental Permits, Etc.

(i) The Company and the Subsidiaries hold all Company Permits that are required
for the conduct of the businesses of the Company and the Subsidiaries as
currently being conducted, each as amended through the date hereof, other than
such Miscellaneous Permits the absence of which would not reasonably be
expected, individually or in the aggregate to have a Material Adverse Effect.

(ii) The Regulatory Permits are in full force and effect and have not been
pledged or otherwise encumbered, assigned, suspended, modified, conditioned, or
restricted in any material respect, canceled or revoked, and the Company and
each of the Subsidiaries and, to the Knowledge of the Company, each of their
respective executive officers and directors, have operated at all times in the
past five (5) years, and are operating, in compliance in all material respects
with all terms thereof or any renewals thereof applicable to them. To the
Knowledge of the Company, no event has occurred, nor has any notice been
received, with respect to any of the Regulatory Permits which allows or results
in, or after notice or lapse of time or both would reasonably be expected to
result in, revocation, suspension, or termination, modification, or the
imposition of any condition or restriction, thereof or would reasonably be
expected to result in any other material impairment of the rights of the holder
of any such Regulatory Permit.

(iii) To the Knowledge of the Company, in the past five (5) years, no
Governmental Authority or self-regulatory organization has initiated any
material proceeding or investigation (other than examinations conducted in the
ordinary course) into the business or operations of the Company or any
Subsidiary, or any executive officer or director thereof, or has instituted any
proceeding seeking to revoke, cancel or limit any Company Permit, and neither
the Company or any Subsidiary, nor any executive officer or director thereof has
received any notice of any unresolved material violation by any Governmental
Authority or self-regulatory organization with respect to any report or
statement relating to any examination of the Company or any Subsidiary. Without
limiting the generality of the foregoing, neither the Company nor any Subsidiary
nor, to the Knowledge of the Company, any of their respective executive officers
or directors or Persons performing similar duties has been enjoined, indicted,
convicted or made the subject of a disciplinary proceeding, censure, consent
decree, memorandum of understanding, cease and desist or administrative order on
account of any violation of any Requirement of Law applicable to the Company or
any of the Subsidiaries.

(iv) Neither the Company or any Subsidiary, nor, to the Knowledge of the
Company, any executive officer or director thereof is a party or subject to any
agreement, consent, decree or order or other understanding or arrangement with,
or any directive of any Governmental Authority or self-regulatory organization
which imposes any material restrictions on or otherwise adversely affects in any
material way the conduct of any of the business of the Company and the
Subsidiaries.

 

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(l) Company SEC Reports. The Company has timely filed all forms, reports,
schedules, proxy statements, registration statements and other documents
(including all exhibits thereto) required to be filed with the SEC since
January 1, 2006 pursuant to the federal securities laws and the SEC rules and
regulations thereunder, together with all certifications required pursuant to
the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), (as they have been
amended since the time of their filing, and including the exhibits thereto,
collectively, the “Company SEC Reports”). The Company SEC Reports (including,
without limitation, any financial statements or schedules included or
incorporated by reference therein) at the time they became effective, in the
case of registration statements, or when filed, in the case of any other Company
SEC Report, complied in all material respects with the applicable requirements
of the 1933 Act and the 1934 Act, as the case may be, and the rules and
regulations of the SEC under all of the foregoing. None of the Company SEC
Reports, including any financial statements or schedules included or
incorporated by reference therein, as of their respective dates, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Except as
set forth in Schedule 3(l), none of the Subsidiaries is required to file any
reports, forms or other documents with the SEC. There are no outstanding or
unresolved comments in comment letters received from the SEC staff with respect
to any of the Company SEC Reports.

(m) Financial Statements. The audited consolidated financial statements
(including the related notes) included in the Company SEC Reports and in the
reports filed by the Company with the Federal Reserve Board, as of their
respective dates, complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC and Federal
Reserve Board with respect thereto, present fairly, in all material respects,
the consolidated financial condition and results of operations, changes in
stockholders’ equity and cash flows of the Company and its Subsidiaries, at the
dates and for the periods indicated, and were prepared in conformity with
generally accepted accounting principles in the United States (“GAAP”) applied
on a consistent basis throughout the periods involved. The unaudited
consolidated financial statements (including the related notes) included in the
Company SEC Reports, as of their respective dates, complied in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, present fairly, in all material
respects, the consolidated financial condition and results of operations,
changes in stockholders’ equity and cash flows of the Company and its
Subsidiaries, at the dates and for the periods indicated, and were prepared in
conformity with GAAP applied on a consistent basis, except that such unaudited
consolidated financial statements may omit statements of changes in financial
position and certain footnote disclosures required by GAAP as permitted by Form
10-Q under the 1934 Act and are subject to normal year-end audit adjustments.
Neither the Company nor any Subsidiary has any Liabilities or obligations that
are of a nature (whether known, unknown, accrued, absolute, contingent or
otherwise and whether due or to become due) that would be required to be
reflected or reserved against on a consolidated balance sheet of the Company and
its Subsidiaries prepared in

 

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accordance with GAAP, or in the notes thereto, other than any Liabilities to the
extent (i) reserved against, reflected or disclosed on the most recent
consolidated balance sheet of Company and its Subsidiaries contained in the
Available Company SEC Documents, including the notes to financial statements
contained therein, (ii) incurred in the ordinary course of business consistent
with past practice since the date of the most recent financial statements
included in the Available Company SEC Documents, or (iii) that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect.

(n) Listing Compliance. The Common Stock is listed on the NASDAQ Global Select
Market (the “Nasdaq”) and, to the Knowledge of the Company, there are no
proceedings to revoke or suspend such listing. The Company has taken no action
designed to, or that would reasonably be expected to have the effect of,
terminating the registration of the Common Stock under the 1934 Act or the
listing of the Common Stock on Nasdaq. The Company is in compliance with the
requirements of Nasdaq for continued listing of the Common Stock thereon and any
other Nasdaq listing and maintenance requirements. In the past five (5) years,
trading in the Common Stock has not been suspended by the SEC or Nasdaq (other
than temporary suspensions, in each case during the course of one trading day,
to allow dissemination of material information).

(o) Sarbanes-Oxley; Disclosure and Internal Controls.

(i) The Company is in compliance in all material respects with all of the
provisions of the Sarbanes-Oxley Act that are applicable to it or any of the
Subsidiaries.

(ii) The Company maintains a system of disclosure controls and procedures as
defined in Rule 13a-15 under the 1934 Act that are designed to provide
reasonable assurance that information required to be disclosed by the Company in
reports that the Company is required to file under the 1934 Act is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and that such information is accumulated and communicated
to the Company’s management, including the Company’s Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosures. As of June 30, 2008, to the Knowledge of the Company, such
controls and procedures were effective, in all material respects, to provide
such reasonable assurance.

(iii) The Company and its consolidated Subsidiaries have established and
maintained a system of internal control over financial reporting (within the
meaning of Rule 13a-15 under the 1934 Act) (“Internal Control Over Financial
Reporting”). The Company’s certifying officers have evaluated the effectiveness
of the Company’s Internal Control Over Financial Reporting as of the end of the
period covered by the most recently filed annual report on Form 10-K of the
Company under the 1934 Act (the “Evaluation Date”). The Company presented in
such annual report the conclusions of the certifying officers about the
effectiveness of the Company’s Internal Control Over Financial Reporting based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the Company’s Internal Control Over Financial Reporting
that have materially affected, or are reasonably likely to materially affect,
the Company’s Internal Control Over Financial Reporting. The Company

 

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has devised and maintains a system of internal accounting controls sufficient to
provide reasonable assurances that: (A) transactions are executed in accordance
with management’s general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(p) Integration; Other Issuances of Securities. The Company has not made, nor
will the Company make, any offers or sales of any security, or solicited or will
solicit any offers to buy any security under circumstances that would require
registration under the 1933 Act of the issuance of the Securities to the Buyers.

(q) Tax Matters. Since January 1, 2006, the Company and the Subsidiaries have
made or filed all federal, state and foreign income and all other material Tax
Returns required by any jurisdiction to which they are subject (unless and only
to the extent that the Company or any of the Subsidiaries has set aside on its
books provisions reasonably adequate for the payment of all unpaid and
unreported Taxes) and have paid all Taxes that are material in amount, shown or
determined to be due on such Tax Returns, except those being contested in good
faith and have set aside on their books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. To the Knowledge of the Company, there
are no unpaid Taxes in any material amount claimed to be due by any Taxing
Authority, and to the Knowledge of the Company there is no basis for any such
claim. Neither the Company nor any Subsidiary has executed a waiver with respect
to the statute of limitations relating to the assessment or collection of any
Tax. Except as disclosed in Schedule 3(q), none of the Company’s, or any of the
Subsidiaries’, Tax Returns is presently being audited by any Taxing Authority.

(r) Title to Assets. Except as set forth on Schedule 3(r), the Company and the
Subsidiaries have good and marketable title in and to all property owned by them
and that is material to their businesses, free and clear of all Liens, except
for Liens reflected in the most recent consolidated balance sheet of the Company
included in the Available Company SEC Documents, or that do not 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 them. Any material property and
facilities held under lease by the Company and the Subsidiaries are held under
valid, subsisting and enforceable leases concerning which the Company and the
Subsidiaries are in material compliance.

(s) Employee Benefit Plans; Employees.

(i) Schedule 3(s)(i) sets forth all Employee Benefit Plans in effect as of the
date of this Agreement. Except as disclosed on Schedule 3(s)(i), with respect to
each Employee Benefit Plan, no Liability that either individually or in the
aggregate would be materially adverse to the Company or any Subsidiary, has been
incurred, and there exists no condition or circumstance in connection with which
the Company or any Subsidiary could reasonably be expected to be subject to any
Liability, that either individually or in the

 

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aggregate, would be materially adverse to the Company or any Subsidiary. Except
as disclosed on Schedule 3(s)(i), each Employee Benefit Plan has been operated,
and is in material compliance with the applicable provisions of ERISA, the Code
and all other Requirements of Law. Except as disclosed on Schedule 3(s)(i), as
of the date hereof, there is no material labor dispute, labor union organizing
activity, strike or work stoppage against the Company or any Subsidiary pending
or, to the Knowledge of the Company, threatened which may interfere with the
business activities of the Company or any Subsidiary. Except as disclosed on
Schedule 3(s)(i), there is not pending nor is it anticipated that the
consummation of the Transactions could result in, and to the Knowledge of the
Company there is not threatened, any claim, action or proceeding relating to any
Employee Benefit Plan or the assets thereof (other than ordinary course claims
for benefits).

(ii) Except as disclosed on Schedule 3(s)(ii), no current or former director,
officer, employee or other service provider of the Company or any Subsidiary may
be entitled to any payment (including severance, unemployment compensation,
golden parachute, or otherwise), additional benefits or any acceleration of the
time of payment or vesting of any benefits under any Employee Benefit Plan in
connection with the Transactions (either alone or in conjunction with any other
event including without limitation, a termination of employment). Schedule
3(s)(ii) sets forth all Change in Control Arrangements as of the date hereof
with respect to which the Company, any Subsidiary or any ERISA Affiliate may
have any Liability at any time. All plan documents and agreements concerning all
Change in Control Arrangements have been provided to each Requesting Buyer.

(iii) Except as disclosed on Schedule 3(s)(iii), neither the Company nor any
Subsidiary is a party to, or otherwise obligated, under any Employee Benefit
Plan, to provide for the tax imposed by Section 409A(a)(1)(B) of the Code via
gross-up or otherwise. Neither the Company nor any Subsidiary has any Liability
with respect to, or is a signatory to, any collective bargaining agreement. No
Employee Benefit Plan provides any retiree welfare benefit, including without
limitation, post-employment health, medical, dental, disability, life insurance
or other benefits, other than benefits required pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended. No Employee Benefit Plan
is or has ever been subject to Title IV of ERISA, any multiemployer plan within
the meaning of ERISA Section 3(37) or 4001(a)(3) or Code Section 414(f), or any
“multiple employer welfare plan” or “multiple employer welfare arrangement”
within the meaning of ERISA Section 514(b)(6) or 3(40).

(iv) Each of the Employee Benefit Plans disclosed on Schedule 3(s)(iv) has been
terminated by the Company and neither the Company nor any Subsidiary has any
further material obligations or Liabilities thereunder.

(t) Compliance. The Company and the Subsidiaries are not: (i) in violation of
any of their respective Organizational Documents, (ii) in default under or in
violation of (and, to the Knowledge of the Company, no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in
a default by the Company or the Subsidiaries under), nor has the Company or the
Subsidiaries received notice of a claim that it is in default under or that it
is in violation of, any Company Contract to which it is a

 

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party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (iii) in violation of any order of any
court, arbitrator or Governmental Authority, or (iv) in violation of any
applicable Requirement of Law, and with respect to clauses (ii), (iii) or
(iv) above, other than where such violation or default would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
The Company and each of the Subsidiaries and the conduct and operation of their
respective businesses is and has been in compliance with each Requirement of Law
that affects or relates to this Agreement or any of the other Transaction
Documents or any of the Transactions, other than where the failure to be or to
have been in compliance would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

(u) Transactions with Affiliates. Since January 1, 2006, all transactions
required to be disclosed by Company pursuant to Item 404 of Regulation S-K
promulgated under the 1933 Act have been disclosed in an Available Company SEC
Document. Other than the Transactions, no transactions, or series of related
transactions, is currently proposed, by the Company or any of the Subsidiaries
or, to the Knowledge of the Company, by any other Person, to which the Company
or any of the Subsidiaries would be a participant that would be required to be
disclosed under Item 404 of Regulation S-K promulgated under the 1933 Act if
consummated.

(v) Investment Company. The Company is not, and after giving effect to the
Transactions will not be, an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

(w) No Corrupt Practices. Neither the Company nor any Subsidiary, nor to the
Knowledge of the Company any director, officer, employee, agent or other Person
acting on behalf of the Company or any Subsidiary has, in the course of his or
its actions for, or on behalf of the Company or any of the Subsidiaries (i) used
any corporate funds for any unlawful contribution gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employees from corporate funds; (iii) violated or is in violation of in any
material respect any provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended, or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

(x) No Brokers. Except as disclosed on Schedule 3(x), no broker, investment
banker or other Person is entitled to any broker’s, finder’s or other similar
fee or commission in connection with the execution and delivery of this
Agreement or any of the other Transaction Documents or the consummation of any
of the Transactions based upon arrangements made by or on behalf of the Company,
and the Company shall indemnify and hold the Buyers harmless against any claim
for any such fee or commission based on any such arrangements.

(y) Reports. The Company and each of the Subsidiaries have, filed all reports,
forms, correspondence, registrations and statements, together with any
amendments required to be made with respect thereto (“Reports”), that they were
required to file since

 

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January 1, 2006 with (i) any Bank Regulatory Authority and (ii) any other
federal, state or foreign governmental or regulatory agency or authority (the
agencies and authorities identified in clauses (i) through (ii), are,
collectively, the “Regulatory Agencies”), and all other reports and statements
required to be filed by them since January 1, 2006, including any report or
statement required to be filed pursuant to the laws, rules or regulations of the
United States, any state, or any Regulatory Agency and have paid all fees and
assessments due and payable in connection therewith, except where the failure to
file such report, registration or statement or to pay such fees and assessments
would not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect. Any such Report and any statement regarding the Company
or any Subsidiaries made in any Report filed with or otherwise submitted to any
Regulatory Agency complied in all material respects with relevant legal
requirements, including as to content.

(z) Approvals; Voting Requirements; DGCL 203.

(i) The Board has, at a meeting duly called and held, by a unanimous vote (with
Bruce Taylor, Jeffrey Taylor, Mark Hoppe and M. Hill Hammock abstaining and not
participating in such vote), (A) declared that the Transactions, the Restated
Charter and the Designated Preferred Certificate of Designation are advisable
and in the best interests of the Company, (B) adopted the Transaction Documents,
and (C) approved and resolved to recommend that the Company’s stockholders vote
in favor of each of the Proposals (as defined below).

(ii) The only votes of the Company’s stockholders required to approve and adopt
the Transaction Documents and the Transactions are (A) in the case of the
Company’s issuance of the Preferred Shares, and any other Common Stock,
Convertible Securities or Stock Purchase Rights, including the FIC Warrant, each
as described in the Transaction Documents in accordance with applicable law and
the rules and regulations of the Nasdaq, the affirmative vote of the holders of
a majority of the shares of Common Stock present in person or represented by
proxy at a duly called meeting of the Company’s stockholders at which the
requisite quorum is present, (B) in the case of the Restated Charter, the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock and (C) in the case of the Amended and Restated Bylaws, the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock present in person or represented by proxy at a duly called meeting
of the Company’s stockholders at which the requisite quorum is present (such
proposals are referred to herein collectively as the “Proposals”, and the
receipt of sufficient votes required to approve all such Proposals is referred
to herein as the “Stockholder Approval”).

(iii) The action taken by the Board constitutes approval of the Transactions
under the provisions of Section 203 of the Delaware General Corporation Law, as
amended (“DGCL”), such that Section 203 of the DGCL does not apply to the
Transaction Documents or the Transactions, and such approval has not been
amended, rescinded or modified. No other state takeover, anti-takeover,
moratorium, fair price, interested stockholder, business combination or similar
statute or rule is applicable to the Transactions.

 

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4. COVENANTS.

(a) Stockholders Meeting. The Company shall take all action necessary to duly
call, give notice of, convene and hold a special meeting of stockholders (the
“Stockholders Meeting”) for the purpose of obtaining the Stockholder Approval
(the date such approval is obtained, the “Stockholder Approval Date”) as
promptly as reasonably practicable after the SEC confirms that it has no further
comments on the Proxy Statement (as defined below) or the Company otherwise
determines in good faith that such Proxy Statement will not be reviewed by the
SEC. In the event that the Company does not obtain the Stockholder Approval at
the Stockholders Meeting, the Company agrees that, upon the request of a
Majority of Holders, it will seek to obtain the Stockholder Approval at any
subsequent meeting of stockholders of the Company until the Stockholder Approval
is obtained. Without limiting the generality of the foregoing, the Company will
comply with the terms of Section 4(b) hereof with respect to each such meeting
of stockholders as if it were the Stockholders Meeting.

(b) Proxy Material.

(i) In connection with the Stockholders Meeting, the Company will (A) as
promptly as reasonably practicable after the date of this Agreement prepare and
file with the SEC a proxy statement (as it may be amended or supplemented from
time to time, the “Proxy Statement”) related to the consideration of the
Proposals at the Stockholders Meeting, (B) respond as promptly as reasonably
practicable to any comments received from the SEC with respect to such filings
and provide copies of such comments to those Buyers who have so requested in a
writing delivered to the Company prior to the date hereof to be a Requesting
Buyer for purposes of this Agreement (each such Buyer delivering such request is
listed on Schedule 4(b) hereto and referred to herein as a “Requesting Buyer”)
promptly upon receipt and copies of proposed responses to each Requesting Buyer
a reasonable time prior to filing to allow meaningful comment, (C) as promptly
as reasonably practicable prepare and file any amendments or supplements
necessary to be filed in response to any SEC comments or as otherwise required
by law, (D) mail to its stockholders as promptly as reasonably practicable the
Proxy Statement and all other customary proxy or other materials for meetings
such as the Stockholders Meeting, (E) to the extent required by applicable law,
as promptly as reasonably practicable prepare, file and distribute to the
Company stockholders any supplement or amendment to the Proxy Statement if any
event shall occur which requires such action at any time prior to the
Stockholders Meeting, and (F) otherwise use commercially reasonable efforts to
comply with all requirements of law applicable to any Stockholders Meeting. The
Buyers shall cooperate with the Company in connection with the preparation of
the Proxy Statement and any amendments or supplements thereto, including
promptly furnishing the Company upon request with any and all information as may
be required to be set forth in the Proxy Statement or any amendments or
supplements thereto under applicable law. The Company will provide each
Requesting Buyer a reasonable opportunity to review and comment upon the Proxy
Statement, or any amendments or supplements thereto, and shall give reasonable
consideration to any such comments proposed, prior to mailing the Proxy
Statement to the Company’s stockholders. The Proxy Statement shall include the
recommendation of the Board that stockholders vote in favor of the adoption of
all of the Proposals at the Stockholders Meeting.

 

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(ii) If, at any time prior to the Stockholders Meeting, any information relating
to the Company or Buyers or any of their respective Affiliates should be
discovered by the Company or Buyers which should be set forth in an amendment or
supplement to the Proxy Statement so that the Proxy Statement shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, the party that discovers such information shall promptly notify the
other parties and, to the extent required by applicable law, the Company shall
disseminate an appropriate amendment thereof or supplement thereto describing
such information to the Company’s stockholders.

(iii) The Company agrees that (A) none of the information included or
incorporated by reference in the Proxy Statement or any other document filed
with the SEC in connection with the transactions contemplated by this Agreement
(all such other documents, the “Other Filings”) shall, in the case of the Proxy
Statement, at the date it is first mailed to the Company’s stockholders or at
the time of the Stockholders Meeting or at the time of any amendment or
supplement thereof, or, in the case of any Other Filing, at the date it is first
mailed to the Company’s stockholders or at the date it is first filed with the
SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, except that no covenant is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by the Buyers or any of their Affiliates or representatives in
connection with the preparation of the Proxy Statement or the Other Filings for
inclusion or incorporation by reference therein, and (B) the Proxy Statement and
the Other Filings that are filed by the Company shall comply as to form in all
material respects with the requirements of the 1934 Act.

(iv) Each of the Buyers covenants that none of the information supplied in
writing by or on behalf of such Buyer expressly for inclusion in the Proxy
Statement or the Other Filings will, in the case of the Proxy Statement, at the
date it is first mailed to the Company’s stockholders or at the time of the
Stockholders Meeting or at the time of any amendment or supplement thereof, or,
in the case of any Other Filing, at the date it is first mailed to the Company’s
stockholders or at the date it is first filed with the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.

(c) Potential Delay. If despite the reasonable best efforts of the Company a
Potential Delay (as defined below) occurs, then neither the Stockholder
Approval, nor the adoption of the Restated Charter (including the constitution
of the Executive Committee as provided therein) shall be a condition to Closing
(it being understood and agreed that all other conditions to Closing are not
altered in any respect by this Section 4(c) and that the filing of the
Designated Preferred Certificate of Designation with the Secretary of State of
Delaware shall be an additional closing condition). If a Potential Delay occurs
and Stockholder Approval has not been obtained on or before September 30, 2008,
then, at Closing, and subject to terms and conditions of this Section 4(c), the
Company will deliver certificates with respect to shares of the

 

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Designated Preferred in lieu of the Preferred Shares contemplated in this
Agreement. Furthermore, if a Potential Delay occurs, the Company and the Buyers
will use their respective commercially reasonable efforts to effect the intent
and purposes of the terms and conditions of this Section 4(c). Notwithstanding
anything in this Agreement to the contrary, the Company shall not be obligated
to sell, and no Buyer shall be obligated to purchase, any Designated Preferred
hereunder unless a Potential Delay has occurred, Stockholder Approval has not
been obtained on or before September 30, 2008 and, on or before September 30,
2008, all applicable closing conditions (giving effect to this Section 4(c) but
excluding until the Closing any such condition that by its nature can only be
satisfied at the Closing) shall have been satisfied or waived. For purposes of
this Section 4(c), a “Potential Delay” shall be deemed to have occurred if:
(i) (x) the Proxy Statement has not first been mailed to the Company’s
stockholders on or before September 9, 2008, other than due to the Company’s
failure to fulfill any of its obligations under this Agreement in a timely
manner, and (y) each of the Company and a Majority of Holders otherwise agree
(which agreement shall not unreasonably be withheld) on or after September 10,
2008 that the Stockholders Meeting is not reasonably expected to occur on or
before September 29, 2008, other than due to the Company’s failure to fulfill
any of its obligations under this Agreement in a timely manner, or (ii) the
Company and the Majority of Holders otherwise mutually agree.

(d) Form D and Blue Sky. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy thereof to each
Buyer promptly after such filing. The Company shall, on or before the Closing
Date, take such action, at the Company’s sole expense, as the Company shall
reasonably determine is necessary in order to obtain an exemption for or to
qualify the Securities for sale to the Buyers at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification) and shall
provide evidence of any such action so taken to the Buyers on or prior to the
Closing Date. At the Company’s sole expense, the Company shall make all filings
and reports relating to the offer and sale of the Securities required under
applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date.

(e) Listing. The Company shall promptly secure the listing of all of the
Registrable Securities (as defined in the Registration Rights Agreement, except
that such definition shall be revised for the purpose of this subsection (e) to
exclude the Designated Preferred) on Nasdaq (subject to official notice of
issuance) and shall use its reasonable best efforts to maintain such listing of
all Registrable Securities from time to time issuable under the terms of the
Transaction Documents unless a Majority of Holders otherwise agrees in writing.
Unless a Majority of Holders otherwise agrees in writing, neither the Company
nor any of its Subsidiaries shall take any action that would be reasonably
expected to result in the delisting or suspension of the Common Stock on Nasdaq
and, in the event that the Common Stock is delisted or suspended from trading on
Nasdaq, the Company shall use its reasonable best efforts to cause the Common
Stock to be listed and authorized for trading on a national securities exchange
or automated quotation system.

 

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(f) Disclosure of Transactions and Other Material Information. The Company and
each Requesting Buyer hereunder will consult with each other and will mutually
agree upon any press releases or public announcements pertaining to the
Transactions and shall not issue any such press releases or make any such public
announcements prior to such consultation and agreement, except as may be
required by applicable Law or by obligations pursuant to any listing agreement
with Nasdaq, in which case the party proposing to issue such press release or
make such public announcement shall use its reasonable efforts to consult in
good faith with the other party before issuing any such press releases or making
any such public announcements. Subject to the preceding sentence, it is
contemplated that as soon as reasonably practicable, but in no event later than
the fourth Business Day following the date of this Agreement, the Company shall
issue a press release and file a Current Report on Form 8-K describing the terms
of the transactions contemplated by the Transaction Documents in the form
required by the 1934 Act and attaching the material Transaction Documents
(including, without limitation, this Agreement, the form of Restated Charter,
the Voting Agreement, and the form of the Registration Rights Agreement) as
exhibits to such filing (including all attachments, the “8-K Filing”). For
purposes of this Agreement, “Business Day” means any day other than a Saturday
or Sunday, a legal holiday or any other day on which the SEC is closed.

(g) Reservation of Shares. The Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance as Conversion
Shares, no less than the maximum number of shares of Common Stock then issuable
upon conversion of the outstanding Preferred Shares. The Company shall not issue
any Preferred Shares or Designated Preferred other than in connection with the
consummation of the transactions contemplated by this Agreement.

(h) Conduct of Business. The Company agrees that during the period from the date
of this Agreement to the date the Restated Charter is duly filed with the
Secretary of State of Delaware (unless a Majority of Holders shall have provided
their prior written consent and except as otherwise expressly required or
permitted by this Agreement), the business and operations of the Company and its
Subsidiaries shall be conducted in the ordinary course of business consistent
with past practices, and the Company shall use all commercially reasonable
efforts, with no less diligence and effort than would be applied in the absence
of this Agreement, to (a) preserve intact its current business organizations,
material insurance policies and trade rights and goodwill; (b) preserve its
present relationships with customers, suppliers, officers, employees, lessors,
licensees and other Persons with which it has significant business relations;
and (c) comply in all material respects with all Requirements of Law applicable
to it or any of its properties, assets or business. Without limiting the
generality of the foregoing, unless a Majority of Holders shall have provided
their prior written consent and except as otherwise expressly required or
permitted by this Agreement, or as required by applicable Requirements of Law,
the Company shall not directly or indirectly (i) take any action which would
require majority or unanimous approval of the Executive Committee pursuant to
Article Fifth of the Restated Charter if such charter was then in effect (other
than the dividends to be paid on trust preferred securities in the ordinary
course of business consistent with past practice), (ii) increase the salary,
bonus or other compensation payable or to become payable or the benefits
(including fringe benefits or perquisites) provided to its current or former
directors, officers, other employees or

 

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consultants, except for increases in the ordinary course of business and
consistent with past practice in salaries or wages of employees of the Company
or any Subsidiary who are not directors or officers of the Company or any
Subsidiary, as provided in any existing agreements with current or former
directors, officers, other employees or consultants of the Company or its
Subsidiaries or as required by any collective bargaining agreement or applicable
Requirement of Law; grant or increase any bonus, incentive compensation,
retention payments, severance, change-in-control or termination pay to, or enter
into, amend or modify any Employee Benefit Plan with any current or former
director, officer, other employee or consultant of the Company or of any
Subsidiary, except (X) in the case of any such actions (other than as to any
Change In Control Arrangements) with respect to new or existing employees who
are not directors or officers of the Company or any Subsidiary, in the ordinary
course of business and consistent with past practice or (Y) as required by any
collective bargaining agreement or applicable Requirement of Law; or establish,
adopt, enter into, amend or modify (including any amendment or modification that
increases or accelerates payment or requires any funding), except as required by
any Requirement of Law, any collective bargaining or other Contract with a labor
union; (iii) enter into, amend or modify any contract or arrangement with any
executive officer or director of the Company or any stockholder of the Company
holding five percent or more of the Company’s outstanding Common Stock, or
(iv) change in any significant respect the terms of the Subdebt and Warrant
Transaction from the terms described on Exhibit D hereto.

(i) Access to Information. Upon reasonable notice, the Company shall (and shall
cause each of its Subsidiaries to) afford to officers, employees, counsel,
accountants, consultants and other authorized representatives of Requesting
Buyer (such persons, the “Representatives”), in order to evaluate the
transactions contemplated by this Agreement, reasonable access, during normal
business hours and upon reasonable notice throughout the period prior to the
Closing Date, to its employees, assets, properties, contracts, books and records
so that they may have the opportunity to make such investigations as they shall
reasonably request in connection with the transactions contemplated by this
Agreement; provided, however, that such investigation shall not affect the
representations and warranties made by the Company in this Agreement. During
such period, the Company shall (and shall cause each of its Subsidiaries and
representatives to), to the extent permitted by law, furnish promptly to such
Representatives all information concerning its finances, operations, business,
properties and personnel as may reasonably be requested, and respond to such
inquires as the Representatives shall from time to time reasonably request, and
use commercially reasonable efforts to make available during normal business
hours to such Representatives the appropriate individuals (including management,
personnel, employees, attorneys, accountants and other professionals) for
reasonable inquiries regarding the Company’s and the Subsidiaries’ businesses,
properties and personnel. Without limiting the generality of the foregoing, the
Company shall keep the Buyers apprised on a current and timely basis of the
status of, and any significant issues relating to, the Company’s business,
financial condition, results of operations and prospects. Notwithstanding the
foregoing, nothing herein shall require the Company or any of its Subsidiaries
to disclose any information that would cause a violation of law or any
confidentiality agreement in effect as of the date of this Agreement (in which
case the parties will make appropriate substitute disclosure arrangements, if
such arrangements can be made by the parties using their reasonable best efforts
and, if material to the Company, without such violation).

 

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(j) Reasonable Best Efforts; Cooperation. Each party shall use its reasonable
best efforts to satisfy on the timely basis each of the covenants and conditions
to be satisfied by it as provided in Sections 4 and 6 of this Agreement. Each
party shall refrain from taking any action which would render any representation
or warranty contained in Sections 2 or 3 of this Agreement inaccurate in any
material respect as of the Closing Date. Each party shall promptly notify the
other of (i) any event or matter that would reasonably be expected to cause any
of its representations or warranties to be untrue in any material respect as of
the Closing Date or that would reasonably be expected to cause any of the
conditions to closing provided in Section 6 not to be satisfied in the manner
contemplated herein, or (ii) any action, suit or proceeding that shall be
instituted or threatened against such party to restrain, prohibit or otherwise
challenge the legality of any of the transactions contemplated by this
Agreement. The parties shall cooperate fully with each other and assist each
other in defending any lawsuits or other legal proceedings, whether judicial or
administrative, brought against either party challenging this Agreement or any
of the other Transaction Documents or the consummation of the Transactions,
including seeking to have any stay or temporary restraining order entered by any
court, Bank Regulatory Authority or other Governmental Authority vacated or
reversed. Without limiting the generality of the foregoing, in the event that
there is a Closing with respect to Designated Preferred hereunder, the Company
shall use its best efforts to obtain the Stockholder Approval, file the Restated
Charter including the Preferred Shares with the Secretary of State of the State
of Delaware, and cause all Designated Preferred to be exchanged for Preferred
Shares as expeditiously as reasonably practicable in accordance with the
Certificate of Designation of the Designated Preferred.

(k) Contractual Consents and Regulatory Approvals.

(i) The Company shall act diligently and reasonably in attempting to obtain
before the Closing Date, and the Buyers shall reasonably cooperate with the
Company in such efforts, any Company Contractual Consents, including those
referenced in Schedule 3(f)(iii), in form and substance reasonably satisfactory
to each Requesting Buyer, provided that neither the Company nor the Buyers shall
have any obligation to offer or pay any consideration in order to obtain any
such Company Contractual Consents.

(ii) Each party shall use its reasonable best efforts to take, or cause to be
taken, all commercially reasonable actions necessary or advisable to obtain (and
cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any Governmental Authority which is required
or advisable to be obtained by such party in connection with the Transactions.
The parties shall file any and all required applications and notices (including
any and all required ancillary documents) with the appropriate Bank Regulatory
Authorities in connection with the transactions contemplated by the Transaction
Documents to obtain as promptly as practicable any and all required Bank
Regulatory Approvals. The Company and each Requesting Buyer shall have the right
to review in advance and, to the extent practicable, each will consult the other
on, in each case subject to applicable laws relating to confidentiality or the
exchange of information, all the information relating to the Company or

 

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the Buyers, as the case may be, which appear in any filing made with, or written
materials submitted to, any Bank Regulatory Authority in connection with the
transactions contemplated by this Agreement. The Company and each Requesting
Buyer shall promptly advise each other upon receiving any communication from any
Governmental Authority or third party whose consent or approval is required for
consummation of the transactions contemplated by this Agreement which causes
such party to believe that there is a reasonable likelihood that any required
regulatory approval or other consent or approval will not be obtained or that
the receipt of any such approval will be materially delayed. Each party shall
cooperate in good faith with the other parties hereto in connection with any
applications, notices or other submissions to any Bank Regulatory Authority for
the purpose of obtaining any required Bank Regulatory Approvals, and each party
will keep the others apprised of the status of matters relating to completion of
the Transactions. No party shall knowingly take any action that would materially
impede or delay consummation of the transactions contemplated by the Transaction
Documents or the receipt of any required Bank Regulatory Approvals.
Notwithstanding anything in this Agreement to the contrary, the Buyers shall not
be required to, and the Company may not, without the prior written consent of a
Majority of Holders, become subject to, consent to, or offer or agree to, or
otherwise take any action with respect to, any requirement, condition,
limitation, understanding, agreement or order to (i) sell, license, assign,
transfer, divert, hold separate or otherwise dispose of any assets, business or
portion of business of the Company, its Subsidiaries or any of their respective
Affiliates, (ii) conduct, restrict, operate, invest or otherwise change the
assets, business or portion of business of the Company, its Subsidiaries or any
of their respective Affiliates in any manner, or (iii) impose any restriction,
requirement or limitation on the operation of the business or portion of the
business of the Company, its Subsidiaries or on any of their respective
Affiliates or on the rights of the holders of the Preferred Shares or the
Designated Preferred (if issued hereunder) under the Restated Charter and the
Designated Preferred Certificate of Designation, respectively,.

(l) Certain Actions. Subject to the accuracy of the representations and
warranties of the Buyers in Section 2(n) of this Agreement, the Company shall
not, and shall not permit its Subsidiaries, to take any position that the
execution, delivery or performance by the Company of this Agreement and the
other Transaction Documents to which the Company is a party and the consummation
by the Company of the Transactions will constitute a “Change in Control” or
“Change of Control” or similar definition as applicable under any Change in
Control Arrangement.

(m) Director Designees. The Board shall take all action necessary so that
Harrison I. Steans and Jennifer W. Steans shall have been duly appointed to the
Board with a term commencing immediately following the Closing and ending at the
next Annual Meeting of Stockholders and the Company shall have executed and
delivered an indemnification agreement with each of them in substantially the
form attached hereto as Exhibit H. The Board shall take all action necessary so
that the size of the Board, after the appointment of Harrison I. Steans and
Jennifer W. Steans, shall be thirteen directors. Harrison I. Steans and Jennifer
W. Steans, to the extent that each is not an employee of the Company, shall be
entitled to and shall receive customary cash, equity and other compensation for
board service on the same terms and conditions as other non-employee directors
of the Company.

 

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(n) Takeover Laws. If any state takeover statute or other similar Requirement of
Law becomes or is deemed to become applicable to this Agreement or any of the
transactions contemplated hereby, the Company shall use its reasonable best
efforts to render such Requirement of Law inapplicable to all of the foregoing.

(o) Use of Proceeds. The net proceeds received by the Company from the issuance
of the Preferred Shares (or, if issued, the Designated Preferred) shall be used
to increase the regulatory capital of the Bank, for debt service and dividends
payable by the Company, and for other corporate purposes. The Company shall
cause at least $15 million of the net proceeds received by the Company from the
issuance of the Preferred Shares (or, if issued, the Designated Preferred) to be
held at the Company (and not transferred to any Subsidiary). If the Designated
Preferred is issued, the Company shall cause all of the net proceeds received by
the Company from the issuance of the Designated Preferred to be held at the
Company (and not transferred to any Subsidiary), except that, and only to the
extent that, and subject to the limitation described in the preceding sentence
(i) any such transfer to the Bank is required in order for the Bank to remain
“well-capitalized” under applicable capital guidelines for banks as of
September 30, 2008, and (ii) such transfer has been consented to by the Majority
of Holders (which consent shall not unreasonably be withheld).

(p) Noncircumvention. The Company shall not, and shall not permit its
Subsidiaries, by amendment of its Certificate of Incorporation, Bylaws or
through any reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Agreement, the Transaction Documents, the Designated Preferred and/or
the Preferred Shares and will at all times in good faith carry out all of the
provisions of this Agreement and the Transaction Documents, including, in the
event that the Designated Preferred is issued, taking all reasonable actions as
may be necessary to cause all Designated Preferred to be exchanged for Preferred
Shares as expeditiously as reasonably practicable in accordance with the
Certificate of Designation of the Designated Preferred. Without limiting the
generality of the foregoing, the Company shall not initiate or support any
action inconsistent with or designed to evade the requirements of Article Fifth
of the Restated Charter.

(q) Registration Rights Agreement. Subject to the terms and conditions hereof,
at or prior to Closing, the parties shall enter into a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit F (the
“Registration Rights Agreement”), pursuant to which the Company agrees to
provide certain registration rights with respect to the Registrable Securities
(as defined in the Registration Rights Agreement), under the 1933 Act and the
rules and regulations promulgated thereunder, and applicable state securities
laws.

(r) Management Services Agreement. Subject to the terms and conditions hereof,
at or prior to Closing, the Company and FIC shall enter into the Management
Services Agreement, substantially in the form attached hereto as Exhibit G (the
“Management Services Agreement”).

 

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(s) Certain Payroll Practices. Unless a Majority of Holders otherwise agrees in
writing, the Company shall take all action necessary to cause all employees
receiving cash compensation from the Company as of the date of this Agreement
and who provide services to the Bank to, beginning not later than January 1,
2009, be paid via the payroll of the Bank (provided that a portion of such
expense may be allocated to the Company to the extent of services provided by
such Person directly to the Company).

(t) Certain Equity Award Recommendations. Harrison I. Steans or, following the
filing of the Restated Charter with the Secretary of State of Delaware, the
Series A Designee (as defined in the Restated Charter) serving on the Executive
Committee shall be entitled to recommend from time to time for good faith
consideration by the Compensation Committee of the Board equity awards with
respect to an aggregate of 300,000 shares of Common Stock under the Company’s
2002 Incentive Compensation Plan (as it may be amended from time to time) or any
successor plan for awards to prospective directors and/or officers and/or key
employees of the Company (who are not Affiliates of such recommending Person).
Such right shall continue until the earlier of (i) such time as 300,000 shares
of Common Stock have been granted in accordance with recommendations pursuant to
this Section 4(t), and (ii) the date on which neither (x) 800,000 shares of
Preferred Shares are issued and outstanding (subject to anti-dilution adjustment
for stock splits, stock dividends and the like) (or, until the Preferred Shares
are issued hereunder upon mandatory exchange of the Designated Preferred,
800,000 shares of Designated Preferred are issued and outstanding (subject to
anti-dilution adjustment for stock splits, stock dividends and the like), nor
(y) the outstanding Preferred Shares represent 10% or more of the total combined
voting power of all outstanding shares of all classes of capital stock which are
then entitled to vote in matters (other than the election of directors)
presented to a vote of the Company’s stockholders generally.

(u) Bylaw Amendment. At or prior to Closing, the Company shall amend and restate
its Bylaws to read substantially in the form attached hereto as Exhibit K (the
“Amended and Restated Bylaws”).

(v) Certain Actions. At or prior to Closing, with respect to any and all Trusts
under the Company Deferred Compensation Plan (collectively “Trusts”), the
Company shall authorize, execute and deliver the amendments and take any other
actions necessary or desirable to expressly and specifically exclude any
requirement to fund the Trusts upon a “Change in Control” or “Change of Control”
or similar definitions as applicable in a Change in Control Arrangement.

(w) Voting Agreement. The Company shall take all actions necessary to enforce
the provisions of the Voting Agreement, including the obligations of each
Stockholder (as defined in the Voting Agreement) and the Proxy (as defined in
the Voting Agreement) to vote the Owned Shares (as defined in the Voting
Agreement) as set forth in Article I of the Voting Agreement, and shall in the
event of any breach thereof vigilantly seek to enforce all of its rights and
remedies (including equitable remedies) thereunder to cause each Stockholder and
the Proxy to comply with the terms of the Voting Agreement.

 

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5. REGISTER; TRANSFER AGENT INSTRUCTIONS.

(a) Register. The Company shall maintain at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to each
holder of Securities), a register for the Preferred Shares in which the Company
shall record the name and address of the Person in whose name the Preferred
Shares have been issued (including the name and address of each transferee), the
number of Preferred Shares held by such Person and the number of Conversion
Shares issuable upon conversion of such Preferred Shares. The Company shall keep
the register open and available at all times during business hours for
inspection of any Buyer or its legal representatives.

(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at DTC,
registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares in such amounts as specified from time to time by each Buyer
to the Company upon conversion of the Preferred Shares (the “Irrevocable
Transfer Agent Instructions”). The Company warrants that no instruction other
than the Irrevocable Transfer Agent Instructions referred to in this
Section 5(b), and stop transfer instructions to give effect to Section 2(k)
hereof, will be given by the Company to its transfer agent with respect to the
Securities, and that the Securities shall otherwise be freely transferable on
the books and records of the Company, as applicable, and to the extent provided
in this Agreement and the other Transaction Documents. If a Buyer effects a
sale, assignment or transfer of the shares of Common Stock in accordance with
Section 2(k), the Company shall permit the transfer and shall promptly instruct
its transfer agent to issue one or more certificates or credit shares to the
applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment. In the
event that such sale, assignment or transfer involves Conversion Shares sold,
assigned or transferred pursuant to, and in accordance with the plan of
distribution set forth in, an effective registration statement, as certified by
the applicable Buyers, or pursuant to Rule 144 as set forth in an opinion
delivered as required by Section 2(k), the transfer agent shall issue such
Securities to the Buyer, assignee or transferee, as the case may be, without any
restrictive legend.

6. CONDITIONS OF SALE AND PURCHASE.

(a) Conditions to the Obligations of Each Party. The respective obligations of
each party to this Agreement is subject to the satisfaction or waiver on or
prior to the Closing Date with respect to the Preferred Shares (or in the event
of a Potential Delay, the Designated Preferred) of each of the following
conditions:

(i) Stockholder Approval. Subject to the terms and conditions of Section 4(c),
each of the Proposals shall have been duly approved by the stockholders of the
Company in accordance with applicable Requirements of Law and the certificate of
incorporation of the Company at the Stockholders Meeting;

(ii) Governmental Filings and Consents. All material governmental consents,
orders and approvals legally required for the consummation of the transactions
contemplated hereby shall have been obtained and be in full force and effect,
including each of the Bank Regulatory Approvals.

 

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(iii) No Injunctions or Restraints. No court or other Governmental Authority
having jurisdiction over the Company or any of the Subsidiaries or any Buyer
shall have instituted, enacted, issued, promulgated, enforced or entered any
Requirement of Law (whether temporary, preliminary or permanent) that is then in
effect and that (x) has the effect of making illegal or otherwise prohibiting or
invalidating consummation of any of the Transactions or any provision of this
Agreement or any of the other Transaction Documents or (y) seeks to restrain,
prohibit or invalidate the consummation of any of the Transactions or to
invalidate any provision of this Agreement or any of the other Transaction
Documents.

(b) Conditions to Obligations of the Company. The obligation of the Company
hereunder to issue and sell the Preferred Shares (or in the event of a Potential
Delay, the Designated Preferred) to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing
each Buyer with prior written notice thereof:

(i) Each Buyer shall have executed each of the Transaction Documents to which it
is a party and delivered the same to the Company.

(ii) Each Buyer shall have delivered to the Company the Purchase Price for the
Preferred Shares being purchased by such Buyer at the Closing by wire transfer
of immediately available funds pursuant to the wire instructions provided by the
Company.

(iii) Each Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Buyer at or prior
to the Closing Date.

(c) Conditions to Obligations of Each Buyer. The obligation of the Buyers
hereunder to purchase the Preferred Shares (or in the event of a Potential
Delay, the Designated Preferred) at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for the Buyers’ sole benefit and may be waived by
Buyers representing the Requisite Vote of Holders in their discretion on behalf
of all Buyers at any time by providing the Company with prior written notice
thereof:

(i) The Company shall have duly executed and delivered (i) each of the
Transaction Documents, and (ii) stock certificates representing the Preferred
Shares (in such number as is set forth across from each Buyer’s name in column
(3) of the Schedule of Buyers) being purchased by each Buyer at the Closing
pursuant to this Agreement.

(ii) Subject to the terms and conditions of Section 4(c), the Restated Charter
including the Series A Certificate of Designation shall have been duly filed
with the Secretary of State of the State of Delaware and shall be in full force
and effect, enforceable against the Company in accordance with its terms and
shall not have been amended, and the Executive Committee shall be duly
constituted in accordance with the Restated Charter.

 

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(iii) The Company shall have performed, satisfied and complied in all material
respects each of its respective covenants and agreements contained in this
Agreement and required to be performed, satisfied or complied at or prior to the
Closing.

(iv) (A) Each of the representations and warranties of the Company contained in
Sections 3(a), (b), (c), (d), (e) and (z) of this Agreement shall be true and
correct in all material respects (except that each of such representations and
warranties that is qualified as to materiality shall be true and correct in all
respects) on and as of the Closing Date as if made on and as of such date, other
than representations and warranties which address matters only as of a certain
date, which shall be true and correct as of such certain date and (B) the other
representations and warranties of the Company shall be true and correct on and
as of the Closing Date as if made on and as of such date, other than
representations and warranties which address matters only as of a certain date,
which shall be true and correct as of such certain date, except for such
failures to be true and correct as individually or in the aggregate, did not,
and would not reasonably be expected to result in, a Material Adverse Effect.
For purposes of determining the satisfaction of clause (B) of this condition,
the representations and warranties of the Company shall be deemed not qualified
by any references therein to materiality generally or to a Material Adverse
Effect (or qualifiers similar to the foregoing).

(v) Harrison I. Steans and Jennifer W. Steans shall have been duly appointed to
the Board with a term commencing immediately following the Closing and ending at
the next Annual Meeting of Stockholders, the Company shall have executed and
delivered an indemnification agreement with each of them substantially in the
form attached hereto as Exhibit H, and the size of the Board, after the
appointment of Harrison I. Steans and Jennifer W. Steans, shall be not larger
than thirteen (13) directors.

(vi) The Company shall have executed and delivered the Management Services
Agreement, and in connection therewith the Company shall have duly granted the
FIC Warrant and paid the $750,000 fee payable to FIC thereunder.

(vii) The Company shall have delivered the opinion of Katten Muchin Rosenman
LLP, the Company’s outside counsel, and of Morris, Nichols, Arsht & Tunnell LLP,
special Delaware counsel to the Company, each dated as of the Closing Date, and
each in substantially the form of Exhibit I attached hereto.

(viii) The Company shall have delivered a certificate, executed by a duly
authorized executive officer of the Company and dated as of the Closing Date,
certifying (i) the resolutions consistent with Section 3(d) and 3(z) as adopted
by the Board in a form reasonably acceptable to such Buyer, (ii) the Bylaws as
in effect at the Closing, (iii) the conditions set forth in Sections 6(c)
(iii) and (iv) have been satisfied, and (iv) all Bank Regulatory Approvals, if
any, required to be obtained by the Company or any Subsidiary prior to
consummation of the Transactions have been obtained.

 

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(ix) The Company shall have delivered executed a fully executed copy of each
Company Contractual Consent.

(x) The proposed Subdebt and Warrant Transaction shall either (a) be consummated
concurrently with the Closing on the Closing Date or (b) the Company shall have
received non-binding commitments or indications of interest with respect to not
less than $30 million with respect to such proposed Subdebt and Warrant
Transaction.

(xi) The Board of Directors of the Company shall have duly adopted the Amended
and Restated By-laws.

(xii) Since the date of this Agreement, there shall not have been a Material
Adverse Change.

7. TERMINATION.

(a) Termination by Mutual Consent. This Agreement may be terminated at any time
prior to the Closing, by mutual written consent of the Company and a Majority of
Holders.

(b) Termination by Either Company or Buyers. This Agreement may be terminated by
either the Company or a Majority of Holders at any time prior to Closing: (i) if
the Closing has not occurred on or before November 15, 2008 (the “Outside
Date”); provided, however, that the right to terminate this Agreement under this
clause will not be available to any party to this Agreement whose failure to
fulfill any of its obligations under this Agreement has been a principal cause
of, or resulted in, the failure of the Closing to have occurred by such date;
and provided, further, that if the Closing has not occurred by the Outside Date
solely due to the fact that the parties have not received all Bank Regulatory
Approvals or the Stockholder Approval by such date, the Outside Date shall be
automatically extended to December 31, 2008; or (ii) the Stockholder Approval is
not obtained at the Stockholders Meeting.

(c) Conditions to Performance Not Met. Subject to the provisions of Section 7(b)
hereof, this Agreement may be terminated:

(i) by the Company upon written notice in the event of a material breach of any
covenant or agreement to be performed or complied with by the Buyers pursuant to
the terms of this Agreement, which breach would result in a condition to Closing
set forth in Section 6(b) hereof becoming incapable of fulfillment or cure
(which condition has not been waived by the Company in writing) prior to the
Outside Date; or

(ii) by a Majority of Holders upon written notice in the event of a material
breach of any covenant or agreement to be performed or complied with by the
Company pursuant to the terms of this Agreement, which breach would result in a
condition to Closing set forth in Section 6(c) hereof becoming incapable of
fulfillment or cure (which condition has not been waived by a Majority of
Holders in writing) prior to the Outside Date.

 

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(d) Effect of Termination. In the event that this Agreement shall be terminated
pursuant to this Section 7, all further obligations of the parties under this
Agreement shall terminate without further liability of any party to another. A
termination under this Section 7 shall not relieve any party of any liability
for a breach of, or for any misrepresentation under this Agreement, or be deemed
to constitute a waiver of any available remedy (including specific performance
if available) for any such breach or misrepresentation. Nothing in this
Section 7(d) shall relieve either party to this Agreement of liability for a
breach of a covenant or obligation under this Agreement prior to the Closing.

(e) Company Fee. In the event that (1) this Agreement is terminated by either
the Company or a Majority of Holders pursuant to Section 7(b) because the
parties have not received all Bank Regulatory Approvals (unless the failure to
receive any such Bank Regulatory Approval was due to the failure of any Bank
Regulatory Authority to approve Harrison I. Steans or Jennifer W. Steans to
effect the transactions contemplated hereby) or the Stockholder Approval by the
Outside Date or pursuant to Section 7(b)(ii), or (2) there is a Closing with
respect to Designated Preferred hereunder and the Company has not obtained the
Stockholder Approval, filed the Restated Charter including the Series A
Preferred with the Secretary of State of the State of Delaware, and all
Designated Preferred has not been exchanged for Preferred Shares on or before
December 31, 2008, then the Company shall pay to FIC (i) $1.5 million (the
“Company Fee”), and (ii) an amount equal to all of the reasonable out-of-pocket
expenses incurred by or on behalf of FIC and its Affiliates as of the date of
termination in connection with the negotiation and documentation of the
Transactions, including reasonable fees and disbursements of counsel. The
amounts payable to FIC under this Section 7(e) shall be paid by the Company by
wire transfer of same day U.S. funds as promptly as reasonably practicable (and,
in any event, within two Business Days following the occurrence of the event
specified in (1) or (2) above). The Company shall not withhold any amount of the
Company Fee or expense reimbursement. The parties acknowledge that the agreement
with respect to the Company Fee and expense reimbursement is an integral part of
the agreements contained herein, and that, without these agreements, Buyers
would not have entered into this Agreement. Accordingly, if the Company fails to
pay promptly any amounts due pursuant to Section 7(e), and, in order to obtain
such payment, FIC commences any Action or Proceeding which results in a judgment
against the Company for the fee or expense reimbursement set forth in
Section 7(e), the Company shall pay to FIC its costs and expenses (including
reasonable attorneys’ fees and expenses) in connection with such Action or
Proceeding, together with interest on the amount due from each date for payment
until the date of the payment at an annual rate equal to the “prime rate” (as
published in the Money Rates Table of the Wall Street Journal) in effect on the
date on which such payment was required to be made plus 5%.

(f) Notwithstanding anything in this Agreement to the contrary, in the event
that a Closing with respect to Designated Preferred is consummated hereunder
prior to obtaining Stockholder Approval, no party hereto shall have the right to
terminate this Agreement for any reason.

 

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8. MISCELLANEOUS.

(a) Action by Requisite Vote of Holders. Subject to the terms of this
Section 8(a), each Buyer hereby agrees that prior to the Closing the affirmative
approval of holders of at least two-thirds in interest of the Buyers as
represented by the number of Preferred Shares for which such Buyers have
subscribed (“Requisite Vote of Holders”) shall have full power and authority to:
(i) waive any of the conditions set forth in Section 6(c) hereof; and (ii) amend
or modify any of the provisions of this Agreement and the other Transaction
Documents; provided, however, that any such amendment or modification pursuant
to this clause (ii) that (A) changes the purchase price, dividend rate, voting
rights, conversion price, conversion rights, or exchange rights of any of the
Securities, or (B) materially and adversely affects any other significant rights
of Buyers under this Agreement or any of the Transaction Documents, shall
require the written consent of each Buyer (it being understood and agreed that
the application of any provision of this Agreement or other Transaction Document
in accordance with its terms, including Section 4(c) hereof, shall not be deemed
an amendment or modification for purposes of this provision). For the avoidance
of doubt, the foregoing sentence does not grant, and shall not be deemed to
grant, any power or authority to Buyers representing the Requisite Vote of
Holders or any other Person to exercise, waive or take other action with respect
to rights provided to any Buyer after the Closing pursuant to and in accordance
with any of the Transaction Documents, including, without limitation, any right
to vote, convert, exercise preemptive rights, exercise certain rights under the
Registration Rights Agreement or otherwise; provided, however, that it is
understood and agreed that nothing in this sentence shall be deemed to limit or
affect in any respect the application of any provision of this Agreement or
other Transaction Document in accordance with its terms, whether before or after
the Closing, including by way of examples the requirement that a Majority of
Holders make any indemnification claims pursuant to Section 8(b) below and the
requirement that not less than one-third of the Series A Registrable Common
Securities (as such term is defined in the Registration Rights Agreement) then
outstanding is required to initiate the exercise of certain demand registration
rights pursuant to Section 1.2 of the Registration Rights Agreement. Each party
hereto acknowledges that this Section 8(a) is intended to promote the efficient
negotiation and handling of matters arising under or in connection with this
Agreement and the Closing pursuant to this Section 8(a). The Company shall be
entitled to rely upon, without independent investigation, any act, notice,
instruction or communication from Buyers representing the Requisite Vote of
Holders on behalf of all Buyers consistent with this Section 8(a) and shall not
be liable in any manner whatsoever for any action taken or not taken in reliance
upon the actions taken or not taken or communications or writings given or
executed by Buyers representing the Requisite Vote of Holders in accordance with
this Section 8(a). Subject to the provisions of this Section 8(a), each Buyer
hereby agrees that Buyers representing the Requisite Vote of Holders will have
full power and authority in such Buyer’s name, place and stead, to execute,
certify, acknowledge, deliver, file and record all agreements, certificates,
instruments and other documents and any amendment thereto, and take any other
action which Buyers representing the Requisite Vote of Holders deem necessary or
appropriate in connection with the power and authority granted under this
Section 8(a). All actions, decisions and instructions of Buyers representing the
Requisite

 

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Vote of Holders in accordance with the power and authority granted under the
terms of this Section 8(a) shall be conclusive and binding upon all Buyers and
shall be deemed authorized, approved, ratified and confirmed by Buyers, having
the same force and effect as if performed pursuant to the direct authorization
of all Buyers. The provisions of this Section 8(a) shall be binding upon the
executors, heirs, legal representatives, personal representatives, successor
trustees, and successors of each Buyer, and any references in this Agreement to
a Buyer shall mean and include the successors to such Buyer’s rights hereunder,
whether pursuant to testamentary disposition, the laws of descent and
distribution or otherwise. No Buyer shall be liable to any other Buyer by reason
of any act, or failure to act, with respect to any matter requiring the approval
of Buyers representing a specified percentage in interest, whether the Requisite
Vote of Holders or a Majority of Holders or otherwise, in connection with this
Agreement or any of the Transaction Documents.

(b) Survival. The respective representations, warranties, covenants and
agreements of the Company and the Buyers set forth in this Agreement or any
other Transaction Document or in any exhibit, schedule, certificate or
instrument attached or delivered pursuant hereto or thereto (except covenants
and agreements which are expressly required to be performed and are performed in
full on or prior to the Closing Date) shall survive the Closing and the
consummation of the Transactions contemplated by this Agreement (i) in the case
of representations and warranties other than pursuant to Sections 3(a), (b),
(c), (d), (e) and (z) of this Agreement (which shall survive indefinitely), for
a period ending on the last to occur of (A) the date six months after
Stockholder Approval is obtained, (B) June 30, 2009, and (C) the date 60 days
after the filing by the Company of its Form 10-K for the year ending
December 31, 2008 including audited financial statements for such fiscal year,
and (ii) in the case of covenants and agreements, for a period ending when no
shares of Designated Preferred or Series A Preferred are outstanding.
Notwithstanding anything to the contrary in the previous sentence, any claim for
indemnification hereunder asserted in writing on or before the applicable
deadline described in the preceding sentence shall survive, and the
representation, warranty, covenant and/or agreement referenced in such claim
shall survive for purposes of such claim, until finally resolved or judicially
determined. Each Buyer agrees that any claim by the Buyers with respect to any
breach of such representations, warranties, covenants and/or agreements of the
Company may only be made by a Majority of Holders on behalf of all Buyers, and
the amount, net of fees and expenses reasonably incurred in connection with the
making, pursuing and resolution of such claim, of any recovery pursuant thereto
shall be shared ratably among all of the Buyers.

(c) Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Delaware, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Delaware. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the State of Delaware for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or

 

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proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

(d) Severability. The provisions of this Agreement are severable and the
invalidity or unenforceability of any provision will not affect the validity or
enforceability of the other provisions of this Agreement. If any provision of
this Agreement, or the application of that provision to any Person or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision will be substituted for that provision in order to carry out, so far
as may be valid and enforceable, the intent and purpose of the invalid or
unenforceable provision, and (ii) the remainder of this Agreement and the
application of that provision to other Persons or circumstances will not be
affected by such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of that provision, or the
application of that provision, in any other jurisdiction.

(e) Entire Agreement; Amendments. This Agreement and the other Transaction
Documents supersede all other prior oral or written agreements (including that
certain letter of intent dated July 25, 2008) between the Buyers, the Company,
their Affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement, the other Transaction Documents and the
instruments referenced herein and therein contain the entire understanding of
the parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor any Buyer
makes any representation, warranty, covenant or undertaking with respect to such
matters; provided, however, (i) the terms of that certain Non-Disclosure
Agreement, dated as of July 22, 2008 and as amended by the amendment thereto
dated September 4, 2008, between the Company and FIC shall survive and remain in
full force and effect, and (ii) the terms of each of the Non-Disclosure
Agreements with the Buyers indicated on Schedule 8(e) shall survive and remain
in full force and effect; provided, however, that notwithstanding any provision
therein to the contrary, the Company and each such Buyers severally agree that
such Buyer shall not be restricted by the terms in the section of such
Non-Disclosure Agreement captioned “Standstill” from purchasing up to that
number of shares of Common Stock equal to the quotient obtained by dividing
(x) the aggregate “Purchase Price” set forth beside such Buyer’s name on the
Schedule of Buyers by (y) twenty (20) (e.g., a Buyer who subscribes for
Preferred Shares with an aggregate Purchase Price of $1,000,000 would have the
ability to purchase up to 50,000 shares of Common Stock without restriction
under the Standstill provision of any such Non-Disclosure Agreement). Except as
provided

 

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in Section 8(a) of this Agreement, no provision of this Agreement may be amended
other than by an instrument in writing signed by the Company and each of the
Buyers, and any amendment to this Agreement made in conformity with the
provisions of this Section 8(e) shall be binding on all Buyers and holders of
Securities, as applicable. Except as provided in Section 8(a) of this Agreement,
no provision hereof may be waived other than by an instrument in writing signed
by the party against whom enforcement is sought and then only to the specific
purpose, extent and instance so provided. No such amendment shall be effective
to the extent that it applies to less than all of the holders of the Preferred
Shares then outstanding.

(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

 

Taylor Capital Group, Inc. 9550 West Higgins Road Rosemont, Illinois 60018
Telephone:   (847) 653-7978 Facsimile:   (847) 653-7890 Attention:   Mr. Bruce
W. Taylor

With a copy (for informational purposes only) to:

 

Katten Muchin Rosenman LLP 525 West Monroe Street Chicago, Illinois 60661
Telephone:   (312) 902-5200 Facsimile:   (312) 902-1061 Attention:   Jeffrey R.
Patt, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with a copy to such Buyer’s counsel as set forth on the
Schedule of Buyers attached hereto, or to such other address and/or facsimile
number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) Business Days
prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or deposit with an overnight courier service in accordance with clause
(i), (ii) or (iii) above, respectively.

 

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(g) Expenses. Except as otherwise specified in this Section 8(g) or in any other
Transaction Document, all costs and expenses incurred in connection with this
Agreement, the Transaction Documents and the Transactions shall be paid by the
party incurring such cost or expense. The Company shall promptly reimburse FIC
upon presentation of appropriate invoices and documentation therefor for all
Reimbursable Expenses incurred by or on behalf of FIC or its Affiliates. For
purposes of this Agreement, “Reimbursable Expenses” shall mean all reasonable
documented out-of-pocket fees and expenses incurred by or on behalf of FIC or
its Affiliates, at any time prior to the earlier of (a) the date the Restated
Charter is filed with the Secretary of State of Delaware or (b) termination of
this Agreement, whether incurred before or after the date hereof or before or
after the Closing Date, in connection with their due diligence investigation of
the Company, the preparation, review, delivery and performance of this Agreement
and the other Transaction Documents, the review of Proxy Statement and related
matters in connection with the Stockholder Approval, and the consummation of the
Transactions and related preparations therefor, including all reasonable
documented fees and expenses of counsel, accountants, experts and consultants to
FIC and its Affiliates. At or prior to the Closing, the Company shall have paid
in accordance with this Section 8(g) all Reimbursable Expenses for which
appropriate invoices and documentation had been submitted prior to such date.
The parties acknowledge that this provision is an integral part of the
agreements contained herein. Accordingly, if the Company fails to pay promptly
any amounts due pursuant to this Section 8(g), and, in order to obtain such
payment, FIC commences any Action or Proceeding which results in a judgment
against the Company for Reimbursable Expenses, the Company shall also pay to FIC
its costs and expenses (including reasonable attorneys’ fees and expenses) in
connection with such Action or Proceeding, together with interest on the amount
due from each date for payment until the date of the payment at an annual rate
equal to the “prime rate” (as published in the Money Rates Table of the Wall
Street Journal) in effect on the date on which such payment was required to be
made plus 5%.

(h) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including any purchasers of the Preferred Shares. The Company shall not assign
this Agreement or any rights or obligations hereunder without the prior written
consent of each of the Buyers. No Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
Company; provided, however, that after the Closing, a Buyer may assign some or
all of its rights hereunder in connection with the transfer of any of its
Preferred Shares in accordance with the terms of Section 2(j) hereof without the
consent of the Company, in which event such assignee shall be deemed to be a
Buyer hereunder with respect to such assigned rights.

(i) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except that the provisions of this Agreement relating to the Company Fee
and expense reimbursement provisions contemplated by Section 7(e) of this
Agreement are intended to benefit, and be fully enforceable against the Company
by, FIC.

 

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(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

(k) Schedules. The schedules shall be construed with and as an integral part of
this Agreement to the same extent as if the same has been set forth verbatim
herein. Any matter disclosed shall not be deemed to be an admission or
representation as to the materiality of the item so disclosed.

(l) Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to specific performance
of the terms and provisions hereof, in addition to any other remedy to which
they are entitled at law or in equity.

(m) No Strict Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

(n) Independent Nature of Buyers’ Obligations and Rights. The obligations of
each Buyer under any Transaction Document are several and not joint with the
obligations of any other Buyer, and no Buyer shall be responsible in any way for
the performance of the obligations of any other Buyer under any Transaction
Document. The decision of each Buyer to enter into to this Agreement has been
made by such Buyer independently of any other Buyer. Nothing contained herein or
in any other Transaction Document, and no action taken by any Buyer pursuant
hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Buyers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents and the Company acknowledges that the Buyers are not acting in concert
or as a group, and the Company will not assert any such claim, with respect to
such obligations or the transactions contemplated by the Transaction Documents.
Each Buyer confirms that it has independently participated in the negotiation of
the transaction contemplated hereby with the advice of its own counsel and
advisors, and has not relied upon or consulted any legal, financial or other
advisors to the Company. Such Buyer hereby acknowledges and agrees that Keefe,
Bruyette & Woods, Inc. has acted as financial advisor to the Company (and not as
an underwriter or placement agent for the Securities) and has not acted as an
advisor to, and does not represent, such Buyer. Each Buyer hereby acknowledges
and agrees that counsel to FIC, Harrison I. Steans and Jennifer W. Steans
represents only such Persons and does not represent such Buyer. The Company has
elected to provide all Buyers with the same terms and Agreement for the
convenience of the Company and not because it was required or requested to do so
by the Buyers. Each Buyer shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of any other Transaction Documents in accordance with the terms
and conditions hereof and thereof.

 

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(o) Construction; Interpretation; Certain Terms. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Section, schedule, exhibit, recital
and party references are to this Agreement unless otherwise stated. The words
“hereof,” “herein,” “hereunder” and words of similar import shall refer to this
Agreement as a whole and not to any particular section or provision of this
Agreement, and reference to a particular section of this Agreement shall include
all subsections thereof. No party, nor its counsel, shall be deemed the drafter
of this Agreement for purposes of construing the provisions of this Agreement.
The term “including” as used in this Agreement shall mean including, without
limitation, and shall not be deemed to indicate an exhaustive enumeration of the
items at issue. All terms and words used in this Agreement, regardless of the
number or gender in which they are used, shall be deemed to include any other
number and any other gender as the context may require.

(p) Counterparts; Effectiveness. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to each other party. In the event that any signature to this
Agreement or any amendment hereto is delivered by facsimile transmission or by
e-mail delivery of a “.pdf” format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof. No party hereto shall raise the
use of a facsimile machine or e-mail delivery of a “.pdf” format data file to
deliver a signature to this Agreement or any amendment hereto or the fact that
such signature was transmitted or communicated through the use of a facsimile
machine or e-mail delivery of a “.pdf” format data file as a defense to the
formation or enforceability of a contract and each party hereto forever waives
any such defense.

[Signature Page Follows]

 

- 40 -

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

IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.

 

COMPANY: TAYLOR CAPITAL GROUP, INC. By:  

/s/ Bruce W. Taylor

Name:   Bruce W. Taylor Title:   Chief Executive Officer

[Signature Page to Securities Purchase Agreement - Taylor Capital]

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

TAYLOR CAPITAL GROUP, INC.

STOCK PURCHASE AGREEMENT

Buyer Certification and Signature Page for Individual and Joint Accounts

The undersigned understands (i) that no offer of any securities has been made to
the undersigned and (ii) that no offer of securities will be made to the
undersigned unless the undersigned is an “accredited investor” as that term is
defined in Rule 501 under the Securities Act of 1933, as amended. The
undersigned certifies that (check all that are applicable):

 

                         (1)   I am an “accredited investor” because I had an
individual income of more than $200,000 or my spouse and I had a joint income of
more than $300,000 in each of past two calendar years and I reasonably expect to
have an individual income in excess of $200,000 or my spouse and I reasonably
expect to have a joint income in excess of $300,000 in the current calendar
year.                          (2)   I am an “accredited investor” because I
have an individual net worth, or my spouse and I have a joint net worth, in
excess of $1,000,000. For purposes of this certification, “net worth” (except as
otherwise specifically defined) means the excess of total assets at fair market
value, including home and personal property, over total liabilities, including
mortgage.

    NAME OF BUYER(S): please print

 

    1.  

 

          Joint Tenant/Tenant in Common     Signature:  

 

    (if applicable):     Date:  

 

    2.  

 

            Signature:  

 

    ADDRESS:     Date:  

 

    Mailing:  

 

    PHONE, FAX AND EMAIL:  

 

        Phone:  

 

 

 

        Fax:  

 

 

 

        Email:  

 

 

    UNITED STATES SOCIAL SECURITY

    NUMBER (IF APPLICABLE):

     

    SSN 1.

 

 

     

    SSN 2.

 

 

   

 

  Joint Tenants with Right of Survivorship

 

    TYPE OF OWNERSHIP:

   

 

 

Community Property

(check only if a resident of a Community Property State)

 

 

  Individual        

 

  Tenants In Common      

[Signature Page and Buyer Certification to Securities Purchase Agreement -

Individual and Joint Accounts]

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

TAYLOR CAPITAL GROUP, INC.

STOCK PURCHASE AGREEMENT

Buyer Certification and Signature Page for Individual Retirement Accounts (IRA)

The undersigned understands (i) that no offer of any securities has been made to
the undersigned and (ii) that no offer of securities will be made to the
undersigned unless the undersigned is an “accredited investor” as that term is
defined in Rule 501 under the Securities Act of 1933, as amended. The
undersigned certifies that (check all that are applicable):

 

                          (1)      I am an “accredited investor” because I had
an individual income of more than $200,000 or my spouse and I had a joint income
of more than $300,000 in each of past two calendar years and I reasonably expect
to have an individual income in excess of $200,000 or my spouse and I reasonably
expect to have a joint income in excess of $300,000 in the current calendar
year.                           (2)      I am an “accredited investor” because I
have an individual net worth, or my spouse and I have a joint net worth, in
excess of $1,000,000. For purposes of this certification, “net worth” (except as
otherwise specifically defined) means the excess of total assets at fair market
value, including home and personal property, over total liabilities, including
mortgage.

    NAME OF INDIVIDUAL: please print

 

    1.  

 

    Signature:  

 

    Date:  

 

 

    CUSTODIAN INFORMATION:

    Registration

 

    Name:

 

 

 

 

    Address:

 

 

 

 

 

    U. S. Tax ID

 

    (if applicable):

 

 

    Phone:

 

 

    Fax:

 

 

    Email:

 

 

 

    CUSTODIAN’S SIGNATURE:    

 

    INDIVIDUAL’S ADDRESS:     PHONE, FAX AND EMAIL:  

 

        Phone:  

 

 

 

        Fax:  

 

 

 

        Email:  

 

[Signature Page and Buyer Certification to Securities Purchase Agreement - IRAs]

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

TAYLOR CAPITAL GROUP, INC.

STOCK PURCHASE AGREEMENT

Buyer Certification and Signature Page for Entities

The undersigned understands (i) that no offer of any securities has been made to
the undersigned and (ii) that no offer of securities will be made to the
undersigned unless the undersigned is an “accredited investor” as that term is
defined in Rule 501 under the Securities Act of 1933, as amended (the “Act”).
The undersigned certifies that (check all that are applicable):

 

                     (1)   It is a trust with total assets in excess of
$5,000,000 and was not formed for the specific purpose of acquiring the
securities offered.                      (2)   Each equity owner of the
undersigned is an accredited investor.                      (3)   It is either:
(a) a bank as defined in Section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity, or a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; (b) an
insurance company as defined in Section 2(13) of the Act; (c) an investment
company registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; (d) a Small
Business Investment Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Act of 1958; or (e) an
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, which plan fiduciary is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000, or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors; or                      (4)  
It is a private business development company as defined in Section 202(a)(22) of
the Investment Advisors Act of 1940.                      (5)   It is an
organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Illinois or similar business trust, or partnership, with total
assets in excess of $5,000,000 and was not formed for the specific purpose of
acquiring the securities offered.

[Signature Page and Buyer Certification to Securities Purchase Agreement -
Entities]

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

    Form of Organization (check one):

 

 

  Partnership  

 

  Corporation  

 

  Limited Liability Company  

 

  Trust  

 

  Bank

 

    Full Name of Buyer:  

 

     

    Tax ID:                                           

 

    Address:  

 

  

 

 

    

 

  

    Phone:  

 

       Fax:  

 

       Email:  

 

  

 

The undersigned warrants that he/she/it has full power and authority to execute
this Agreement on behalf of the above entity, and an investment in the Company
is not prohibited by the governing documents of the entity or by any law
applicable to such entity.

 

Entity Name:  

 

By:  

 

  (Signature)   (Signer’s Printed Name) Its:  

 

Date:  

 

[Signature Page and Buyer Certification to Securities Purchase Agreement -
Entities]

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

SCHEDULE OF BUYERS

 

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

SIMC CT, LLC

   280,000

Harrison I. Steans,

    Trustee of the Harrison I. Steans Self Declaration of Revocable Trust

   270,000

Prairie Capital IV, L.P.

   190,000

Prairie Capital IV QP, L.P.

   190,000

KBW Capital Partners I, L.P.

   136,000

Thomas B. Hunter, III,

    Trustee of the Thomas B. Hunter III Self-Declaration of Revocable Trust

   128,000

USAmeribancorp, Inc.

   120,000

George P. Bauer Revocable Trust

   100,000

Foursquare Investments LLC

     68,000

Helen H. Morrison,

    Trustee of the Helen H. Morrison 2002 Trust

     50,000

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

Michael Sharkey and Susan L. Sharkey,

    as Joint Tenants with Right of Survivorship

   48,000

Mark A. Hoppe and Mary C. Hoppe,

    as Joint Tenants with Right of Survivorship

   40,000

Maxine M. Hunter Charitable Lead Annuity Trust

   40,000

Heather A. Steans,

    Trustee of the Heather A. Steans 2001 Trust

   40,000

Ernsteen of Boynton Beach, L.P.

   40,000

Lanigan Holdings, LLC

   40,000

Jeffrey Taylor and Susan D. Taylor,

    as Tenants in Common

   40,000

PCB, LP

   33,720

Jennifer W. Steans,

    Trustee of the Jennifer W. Steans 2000 Trust

   30,000

Margot M. Brinley,

    Trustee of the Margot M. Morrison 1999 Trust

   26,000

Jeremiah J. Kelliher

   24,000

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

Michael H. Moskow

    Trust dated 3/23/00

   20,000

M. Hill Hammock Jr. Living Trust

   20,000

Thomas B. Hunter IV,

    Trustee of the Thomas B. Hunter IV Revocable Trust

   20,000

Harold M. Morrison Trust,

    Harold M. Morrison, Trustee

   20,000

Lois L. Morrison,

    Trustee of the Lois L. Morrison 1999 Trust

   20,000

Robin M. Steans,

    Trustee of the Robin M. Steans Revocable Trust

   20,000

Leonard A. Gail,

    Trustee of the Leonard A. Gail Revocable Trust

   20,000

Bruce W. Taylor Revocable Trust

    under agreement dated 4/10/1984

   20,000

Cindy Robinson

   20,000

Lawrence Ryan

   20,000

Amy M. Heinrich,

    Trustee of the Amy M. Heinrich 2000 Trust

   16,000

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

Patrick Stoltz and Megan Stoltz

   13,000

Willard M. Hunter,

    Trustee of the Willard M. Hunter 2002 Revocable Trust

   12,000

Thomas W. Ryan and Mary E. Ryan,

    as Joint Tenant with Right of Survivorship

   12,000

John Kolbus and Michelle Kolbus,

    as Joint Tenants with Right of Survivorship

   12,000

SIP of Illinois Limited Partnership

   10,000

James P. Kastenholz,

    Trustee of the James P. Kastenholz 2000 Trust

   10,000

Michael D. Smith and Margaret W. Smith,

    as Tenants in Common

   10,000

Michael J. Morton

     9,000

Redfish Retreat LLC

     8,000

Alan L. Clark and Nancy Dusevic Clark,

    as Joint Tenants with Right of Survivorship

     8,000

Stieven Financial Offshore Investors, Ltd.

     8,000

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

Allan S. Martin

   8,000

Thomas C. Wallace

   7,200

Joseph V. & Patricia A. Chillura

   6,000

Michael Hara Revocable Trust,

    Michael Hara Trustee

   6,000

Elowe Survivorship Insurance Trust,

    Michael Elowe Trustee

   6,000

Siena Capital Partners I, L.P.

   6,000

Avy Stein

   4,000

Steven E. Fansler

   4,000

Suzanne M.K. Moskow

    Marital Trust dated 3/8/08

   4,000

Mary Cunningham and Thomas Watson,

    as Joint Tenants

   4,000

John R. Willis and Mary S. Willis,

    as Joint Tenants with Right of Survivorship

   4,000

William J. Friend Trust

   4,000

Leisure Investments, LLC

   4,000

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

John F. Timmer and Barbara J. Timmer,

    as Joint Tenants with Right of Survivorship

   4,000

Kevin A. Hughes

   4,000

Howard Bernick

   4,000

Robin VanCastle as trustee

    for the Robin VanCastle Revocable Trust

   4,000

Barbara A. Serbus and Allan L. Serbus,

    as Joint Tenants with Right of Survivorship

   4,000

Mark R. Ptacek and Patricia G. Ptacek,

    as Tenants in Common

   4,000

John O’Sullivan and Kathrine O’Sullivan Living Trust

   3,000

Richard A. Simons

   2,400

Ronald M. Golden and Sheri L. Golden,

    as Joint Tenants with Right of Survivorship

   2,000

Curtis Hurst and Anna Hurst,

    as Joint Tenants with Right of Survivorship

   2,000

Marion Zehner

   2,000

Julie K. Boyer

   2,000

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

David M. Gervase

   2,000

Frank Reppenhagen

   2,000

Kimberly A. Parks

   2,000

Ian G. Ross

   2,000

Patricia A. Fosmoe

   2,000

Kenneth D. Hooten

   2,000

Raymond Rusnak

   2,000

Jennifer W. Steans 1999 Descendants Trust

   2,000

Robin M. Steans 1999 Descendants Trust

   2,000

Robert F. Barnett,

    Trustee of the Robert F. Barnett, III 1997 Trust

   2,000

Michaels Family Thrush, L.P.

   2,000

John C. Kosik

   2,000

Richard M. Rieser Jr.

   2,000

Heather A. Steans 1999 Descendants Trust

   2,000

Jeffrey A. Jones and Sonja Jones,

    as Joint Tenants with Right of Survivorship

   1,400

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

  (1)  

   (2)

Buyer

   Aggregate Number of
Preferred Shares

Linda Weber and Richard Weber,

    as Joint Tenants with Right of Survivorship

   1,280

Nicholas Sayers

   1,000

Maria Tabrizi or her successors in trust,

    as trustee of the Maria Tabrizi 2006 Declaration of Trust dated 11/22/06

   1,000

Nancy Karasek

   1,000

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

EXHIBITS

 

Exhibit A   Defined Terms Exhibit B   Form of Third Amended and Restated
Certificate of Incorporation Exhibit C   Form of Voting Agreement Exhibit D  
Terms of Subdebt and Warrant Transaction Exhibit E   Form of Designated
Preferred Exhibit F   Form of Registration Rights Agreement Exhibit G  
Management Services Agreement Exhibit H   Form of Indemnification Agreement
Exhibit I   Form of Company Counsel Opinion Exhibit J   Form of FIC Warrant
Exhibit K   Form of Amended and Restated Bylaws

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

EXHIBIT A

DEFINED TERMS

“8-K Filing” has the meaning set forth in Section 4(f).

“1933 Act” has the meaning set forth in the recitals.

“1934 Act” has the meaning set forth in Section 2(m).

“Action or Proceeding” means any suit, action, proceeding (including any
compliance, enforcement or disciplinary proceeding), arbitration, formal or
informal inquiry, audit, inspection, investigation or formal order of
investigation of complaint.

“Affiliate” has the meaning set forth in Rule 12b-2 under the 1934 Act as in
effect as on the date hereof.

“Agreement” has the meaning set forth in the introductory paragraph.

“Amended and Restated Bylaws” has the meaning set forth in Section 4(u).

“Available Company SEC Documents” has the meaning set forth in the preamble to
Section 3.

“Bank” has the meaning set forth in the recitals.

“Bank Regulatory Approvals” means the approvals and consents of each of the Bank
Regulatory Authorities which are required to be obtained by any party hereto
prior to consummation of the Transactions.

“Bank Regulatory Authorities” has the meaning set forth in Section 2(o).

“Board” has the meaning set forth in the recitals.

“Business Day” has the meaning set forth in Section 4(f).

“Business Entity” means any corporation, partnership, limited liability company,
joint venture, association, partnership, business trust or other business
entity.

“Buyer” and “Buyers” has the meaning set forth in the introductory paragraph.

“Bylaws” has the meaning set forth in Section 3(f)(i).

“Capital Stock” means the Common Stock and the Preferred Stock.

“Change in Control Arrangement” means any plan, agreement, program, policy,
arrangement, trust, or instrument that provides for a benefit or a payment or
vesting in any benefit or payment, to or for the benefit of any person as a
result of any event, simultaneous events, or series of events over time, at
least one of which would include a corporate transaction of any kind (including
by way of example only and not limitation, any reorganization, merger,
consolidation, liquidation, dissolution, sale or other disposition of any
securities or assets, or a “going private” transaction within the meaning of
Section 13(e) of the 1934 Act), any addition to or change in the composition of
the board of directors or other governing body of the Company or any
Subsidiaries or other affiliates, any change in the beneficial ownership of the
Company or any Subsidiaries or other affiliates, or any other similar
transactions.

“Closing” has the meaning set forth in Section 1(b).

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

“Closing Date” has the meaning set forth in Section 1(b).

“Common Stock” has the meaning set forth in the recitals.

“Company” has the meaning set forth in the introductory paragraph.

“Company Approvals” has the meaning set forth in Section 3(f)(ii).

“Company Contractual Consents” has the meaning set forth in Section 3(f)(iii).

“Company Permits” means all Regulatory Permits and all Miscellaneous Permits.

“Company SEC Reports” has the meaning set forth in Section 3(l).

“Company Fee” has the meaning set forth in Section 7(e).

“Contractual Consent” applicable to a specified Person in respect of a specified
matter means any consent required to be obtained by such Person from any other
Person party to any Contractual Obligation to which such first Person is a party
or by which it is bound in order for such matter to occur or exist without
resulting in, in any material respect, the occurrence of a default or event of
default or termination, the creation of any lien, the triggering of any decrease
in the rights of such first Person, any increase in the obligations of such
first Person or any other consequence adverse to the interests of such first
Person, under any provision of such Contractual Obligation.

“Contractual Obligation” means, as to any Person, any obligation arising out of
any indenture, mortgage, deed of trust, contract, agreement, insurance policy,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound (including, without limitation, any debt
security issued by such Person).

“Conversion Shares” has the meaning set forth in the recitals.

“Convertible Securities” means securities or obligations that are convertible
into or exchangeable for shares of Capital Stock.

“Designated Preferred” has the meaning set forth in the recitals.

“Designated Preferred Certificate of Designation” has the meaning set forth in
the recitals.

“DFPR” has the meaning set forth in Section 2(n).

“DGCL” has the meaning set forth in Section 3(y)(iii).

“DTC” has the meaning set forth in Section 2(k)(i).

“Employee Benefit Plan” means any of the following plans, policies, programs,
agreements, trusts, instruments, or arrangements, whether written or unwritten,
as set forth in clause (A), (B) or (C) below that the Company or any Subsidiary,
with respect to its or their current and/or former employees, directors,
officers, retirees, independent contractors, and/or other service providers, is
party to, sponsors or has sponsored, maintains or has maintained, or contributes
to or has contributed to, or with respect to which the Company or any Subsidiary
together with any ERISA Affiliate had, has or may have any Liability: (A) an
executive compensation or employment agreement with any current or former
director, officer, employee or other service provider, (B) a severance,
retention, equity, bonus, incentive, or retirement

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

program or policy, plan, agreement or arrangement relating to its current or
former directors, officers, employees or other service providers, which contains
change in control provisions or any Change in Control Arrangement, or (C) any
“employee benefit plan” as defined in Section 3(3) of ERISA, collective
bargaining agreement, consulting agreement, deferred compensation, retiree
welfare, vacation, health, medical, dental, vision, life, long term disability,
short term disability, supplemental executive retirement, fringe benefit,
perquisite, bonus, incentive compensation, long term incentive, stock ownership,
stock purchase, stock option, stock appreciation, restricted stock, or other
equity or equity-based plan, agreement, program or arrangement, or any other
benefit plan, fund, agreement, trust, program, policy, or arrangement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity (whether or not incorporated) which is or
was, together with the Company, treated as a single employer under
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended
(the “Code”).

“Evaluation Date” has the meaning set forth in Section 3(o)(iii).

“Executive Committee” has the meaning set forth in Section 4(n).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System.

“FDIC” has the meaning set forth in Section 2(i).

“FIC” means Financial Investments Corporation, an Illinois corporation.

“FIC Warrant” means the warrant dated the date hereof, substantially in the form
attached hereto as Exhibit J, to purchase 500,000 shares of Common Stock, at an
exercise price of $20 per share, issued to FIC (or any Affiliate of FIC
specified by FIC prior to issuance) pursuant to the Management Services
Agreement (subject to approval by the stockholders of the Company to the extent
required by Nasdaq Marketplace rules).

“GAAP” has the meaning set forth in Section 3(m).

“Governmental Authority” means any government or political subdivision or
department thereof, any governmental or regulatory body, commission, board,
bureau, agency or instrumentality, or any court or arbitrator or alternative
dispute resolution body, in each case whether federal, state, local, foreign or
supranational.

“Indebtedness” of any Person means, without duplication (i) all items arising
from the borrowing of money that, according to GAAP, would be included in
determining total liabilities as shown on the consolidated balance sheet of such
Person or any Subsidiary of such Person; (ii) all obligations secured by any
Lien in property owned by such Person whether or not such obligations shall have
been assumed; (iii) all guarantees and similar contingent liabilities with
respect to obligations of others; (iv) all monetary obligations under any
leasing or similar arrangement which, in accordance with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease; and
(v) all other obligations (including, without limitation, letters of credit,
surety bonds and other similar instruments) evidencing obligations to others;
provided, however, Indebtedness shall not include trade payables incurred in the
ordinary course of business and, in the case of Cole Taylor Bank, Indebtedness
shall not include deposits or other indebtedness incurred in the ordinary course
of business and in accordance with customary banking practices and applicable
laws and regulations.

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

“Insolvent” means, with respect to any Person (i) the present fair saleable
value of such Person’s assets is less than the amount required to pay such
Person’s total Indebtedness, (ii) such Person is unable to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured or (iii) such Person intends to incur or
believes that it will incur debts that would be beyond its ability to pay as
such debts mature.

“Irrevocable Transfer Agent Instructions” has the meaning set forth in
Section 5(b).

“Internal Control Over Financial Reporting” has the meaning set forth in
Section 3(o)(iii).

“Knowledge” means the actual knowledge of any Person serving on the senior
management team of the Company (including the Chairman and Chief Executive
Officer, President and Chief Financial Officer), after reasonable inquiry.

“Liability” means any direct or indirect Indebtedness, guaranty, endorsement,
claim, loss, damage, deficiency, cost, expense, obligation or responsibility,
fixed or unfixed, known or unknown, asserted or unasserted, absolute or
contingent, liquidated or unliquidated, secured or unsecured.

“Liens” means any security interests, liens, claims, pledges, mortgages,
options, rights of first refusal, agreements, limitations on voting rights,
charges, easements, servitudes, encumbrances and other restrictions of any
nature whatsoever.

“Majority of Holders” means (i) on any date during the period from the date
hereof through the Closing, the holders of at least a majority in interest of
the Buyers as represented by the number of Preferred Shares for which such
Buyers have subscribed, and (ii) on any date during the period from and after
the Closing through the termination of this Agreement, the holders of at least a
majority of the outstanding Preferred Shares or outstanding shares of Designated
Preferred, as the case may be, on such date.

“Management Services Agreement” has the meaning set forth in Section 4(r).

“Material Adverse Change” or “Material Adverse Effect” means any fact, event,
change, effect, condition, factor or circumstance that individually or in the
aggregate with all other facts, changes, events, effects, conditions, factors
and circumstances (i) is or is reasonably likely to be materially adverse to the
business, financial condition, results of operations, assets, or Liabilities of
the Company and its Subsidiaries taken as a whole or (ii) prevents in any
material respect the Company’s ability to perform its obligations under this
Agreement and the other Transaction Documents or to consummate the Transactions
contemplated hereby and thereby; provided that a “Material Adverse Effect” or
“Material Adverse Change” shall not be deemed to include any effects to the
extent relating to or resulting from (A) changes in accounting principles
generally accepted in the United States or regulatory accounting requirements
applicable to banks or their holding companies generally (except in each such
case for any changes which disproportionately affect the business, financial
condition, results of operations, assets, or Liabilities of the Company and its
Subsidiaries, taken as a whole, as compared to other industry participants);
(B) changes in laws, rules or regulations of general applicability or
interpretations thereof (except in each such case for any changes which
disproportionately affect the business, financial condition, results of
operations, assets, or Liabilities of the Company and its Subsidiaries, taken as
a whole, as compared to other industry participants), (C) changes in general
economic or market conditions in the United States, including the credit and
securities markets, (D) changes in general economic or market

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conditions in the regions in which the Company and/or its Subsidiaries operate
or conduct business or in the markets in which the Company and/or its
Subsidiaries conduct lending operations, including the commercial and
residential real estate lending markets in the Chicago area (except in each such
case for any changes which disproportionately affect the business, financial
condition, results of operations, assets, or Liabilities of the Company and its
Subsidiaries, taken as a whole, as compared to other industry participants),
(E) any changes in the market price or trading volume of the Company’s
securities (but not any effect, event, development or change underlying such
decrease to the extent that such effect, event, development or change otherwise
would constitute a Material Adverse Effect), (F) the announcement or disclosure
of the sale of the Securities or other transactions contemplated by this
Agreement, (G) any action taken by the Company that is expressly required by the
terms of this Agreement, (H) the failure of the Bank to remain “well
capitalized” under applicable capital guidelines for banks as of September 30,
2008 prior to giving effect to the sale of Series A Preferred or Designated
Preferred, as applicable; provided, however that this exception (H) shall not
apply in the event that (i) the Company or the Bank has publicly disclosed that
it is not “well-capitalized” prior to the Closing Date or (ii) the Bank would
not be “well capitalized” after giving effect to such Transaction and the
application of the net proceeds therefrom in accordance with Section 4(o) of
this Agreement, or (I) the failure of the Company to remain “well capitalized”
under applicable capital guidelines for bank holding companies as of
September 30, 2008 prior to giving effect to the sale of Series A Preferred or
Designated Preferred, as applicable; provided, however that this exception
(I) shall not apply in the event that (i) the Company or the Bank has publicly
disclosed that it is not “well-capitalized” prior to the Closing Date, or
(ii) the Company would not be “well capitalized” after giving effect to such
Transaction and the application of the net proceeds therefrom in accordance with
Section 4(o) of this Agreement in the case of a Closing with respect to the
Series A Preferred or the Company would not be “adequately capitalized” after
giving effect to such Transaction and the application of the net proceeds
therefrom in accordance with Section 4(o) of this Agreement in the case of a
Closing with respect to the Designated Preferred.

“Miscellaneous Permits” means all licenses, permits, certificates, franchises,
ordinances, registrations, qualifications, and other rights, privileges,
applications or authorizations filed with, granted or issued by any Governmental
Authority other than Regulatory Permits.

“Nasdaq” has the meaning set forth in Section 3(n).

“Organizational Documents” means, as to any Person (other than an individual),
the articles or certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company operating agreement, and all other organizational documents of such
Person, its certificate or articles of incorporation, by-laws and other
organizational documents.

“Other Filings” has the meaning set forth in Section 4(b)(iii).

“Outside Date” has the meaning set forth in Section 7(b).

“Person” means any individual, Business Entity, unincorporated association or
Governmental Authority.

“Potential Delay” has the meaning set forth in Section 4(c).

“Preferred Shares” has the meaning set forth in the recitals.

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“Proposals” has the meaning set forth in Section 3(z)(ii).

“Proxy Statement” has the meaning set forth in Section 4(b)(i).

“Purchase Price” has the meaning set forth in Section 1(c).

“Registration Rights Agreement” has the meaning set forth in Section 4(q).

“Regulation D” has the meaning set forth in the recitals.

“Regulatory Agencies” has the meaning set forth in Section 3(y).

“Regulatory Permits” means all licenses, permits, certificates, franchises,
ordinances, registrations, qualifications, and other rights, privileges,
applications or authorizations filed with, granted or issued by the SEC, any
Bank Regulatory Authority, any state securities or blue sky regulatory authority
in which the Company maintains offices, or any self-regulatory organization.

“Reports” has the meaning set forth in Section 3(y).

“Representatives” has the meaning set forth in Section 4(i).

“Requirement of Law” means any judgment, order (whether temporary, preliminary
or permanent), writ, injunction, decree, statute, rule, regulation, notice, law
or ordinance and shall also include any rules, regulations and interpretations
of any applicable self -regulatory organizations.

“Requisite Vote of Holders” has the meaning set forth in Section 8(a).

“Restated Charter” has the meaning set forth in the recitals.

“Rule 144” has the meaning set forth in Section 2(j).

“Sarbanes-Oxley Act” has the meaning set forth in Section 3(l).

“SEC” has the meaning set forth in the recitals.

“Securities” has the meaning set forth in the recitals.

“Short Sales” has the meaning set forth in Section 2(m).

“Stock Purchase Rights” has the meaning set forth in Section 3(c)(iv).

“Stockholder Approval” has the meaning set forth in Section 3(z)(ii).

“Stockholder Approval Date” has the meaning set forth in Section 4(a).

“Stockholders Meeting” has the meaning set forth in Section 4(a).

“Subdebt and Warrant Transaction” has the meaning set forth in the recitals.

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“Subsidiaries” means the subsidiaries of the Company set forth on Schedule 3(a)
which includes any Business Entity of which the Company (either alone or through
or together with one or more other Subsidiaries) (x) owns, directly or
indirectly, more than 20% of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such Business Entity, (y) is a general partner,
managing member, trustee or other Person performing similar functions or (z) has
control (as defined in Rule 405 under the 1933 Act).

“Tax” means any tax, governmental fee or other like assessment or charge of any
kind whatsoever (including, but not limited to, any tax imposed under Subtitle A
of the Internal Revenue Code of 1986, as amended, and any net income,
alternative or add-on minimum tax, gross income, gross receipts, sale, bulk
sales, use, real property, personal property, ad valorem, value added, transfer,
franchise, profits, license, withholding tax on amounts paid, withholding,
payroll, employment, excise severance, stamp, capital stock, occupation,
property, environmental or windfall profits tax, premium, custom, duty or other
tax or assessment), together with any interest, penalty, addition to tax or
additional amount thereto, imposed by any Governmental Authority.

“Tax Return” means any return, report or similar statement (including the
attached schedules) required to be filed with respect to any Tax, including,
without limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.

“Taxing Authority” means any Governmental Authority (domestic or foreign)
responsible for the imposition of any Tax.

“Transaction Documents” has the meaning set forth in Section 3(d).

“Transactions” means the sale and issuance of the Preferred Shares to the Buyers
(or in the event the Designated Preferred is issued hereunder, the sale and
issuance of the Designated Preferred to the Buyers and the subsequent exchange
of the Designated Preferred for Preferred Shares), the issuance of the
Conversion Shares, and the execution and delivery of the Transaction Documents
and the consummation by the Company of all of the transactions contemplated
therein.

“Voting Agreement” has the meaning set forth in the recitals.

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EXHIBIT B

FORM OF THIRD AMENDED AND RESTATED CERTIFICATE OF

INCORPORATION

THIRD AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

TAYLOR CAPITAL GROUP, INC.

(Original Certificate of Incorporation Filed October 9, 1996;

Amended and Restated Certificate of Incorporation Filed             , 2008)

Taylor Capital Group, Inc., a corporation originally incorporated on October 9,
1996 and organized and existing under, and by virtue of, the General Corporation
Law of the State of Delaware, as amended (“DGCL”), does hereby certify that this
Third Amended and Restated Certificate of Incorporation of the corporation (the
“Certificate of Incorporation”) set forth below has been duly adopted in
accordance with Sections 242 and 245 of the DGCL.

FIRST: The name of the corporation is Taylor Capital Group, Inc.

SECOND: The corporation’s registered office in the State of Delaware is located
at 1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of the corporation’s registered agent at such address is The Corporation Trust
Company.

THIRD: The nature of the business and the objects and purposes to be transacted,
promoted and carried on are to engage in any lawful act or activity for which
corporations may be organized under the DGCL.

FOURTH: The total number of shares of all classes of stock which the corporation
shall have authority to issue is Fifty Five Million (55,000,000), consisting of
(a) Forty Five Million (45,000,000) shares of common stock, par value $0.01 per
share (the “Common Stock”), and (b) Ten Million (10,000,000) shares of Preferred
Stock, par value $0.01 per share (“Preferred Stock”), [Two Million Four Hundred
Thousand (2,400,000)] [Subject to increase in certain circumstances if
Designated Preferred is issued] shares of which shall be designated as 8.0%
Non-Cumulative Convertible Perpetual Preferred Stock, Series A (the “Series A
Preferred”) with the voting powers, preferences, rights and qualifications,
limitations set forth in Section B.2 below.

The designations, powers, preferences and relative participating, optional or
other special rights of the common stock and the preferred stock, and the
qualifications, limitations or restrictions thereof, are as follows:

A. COMMON STOCK

1. Voting. Except as otherwise provided by law, on all matters on which the
holders of Common Stock shall be entitled to vote, each share of Common Stock
shall entitle the holder thereof to one vote per share.

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2. Dividends. Subject to the express terms of any series of the Preferred Stock
outstanding from time to time, such dividend or distribution as may be
determined by the Board of Directors of the corporation may from time to time be
declared and paid or made upon the Common Stock out of any source at the time
lawfully available for the payment of dividends.

3. Liquidation. The holders of Common Stock shall be entitled to share ratably
upon any liquidation, dissolution or winding up of the affairs of the
corporation (voluntary or involuntary), all assets of the corporation which are
legally available for distribution, if any, remaining after payment of all debts
and other liabilities and subject to the prior rights of any holders of
Preferred Stock of the preferential amounts, if any, to which they are entitled.

4. Purchases. Subject to any applicable provisions of this Article FOURTH, the
corporation may at any time or from time to time purchase or otherwise acquire
shares of its Common Stock in any manner now or hereafter permitted by law,
publicly or privately, or pursuant to any agreement.

B. PREFERRED STOCK

1. Subject to the other provisions of this Certificate of Incorporation, the
Board of Directors is expressly authorized to provide for the issue of all or
any of the shares of the Preferred Stock in one or more series, and to fix the
number of shares and to determine or alter for each such series, such voting
rights, designations, powers, preferences and relative, participating, optional
or other rights, and such qualifications, limitations, or restrictions thereof,
as shall be stated and expressed in the resolution or resolutions adopted by the
Board of Directors providing for the issue of such shares as may be permitted by
law. Each series shall be so designated as to distinguish the shares thereof
from the shares of all other series and classes. The authority of the Board of
Directors of the corporation with respect to each series shall include, but not
be limited to, the determination or fixing of the following: (i) the designation
of such series; (ii) the dividend rate of such series, the conditions and dates
upon which such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes of stock or
any other series of any class of stock of the corporation, and whether such
dividends shall be cumulative or non-cumulative; (iii) whether the shares of
such series shall be subject to redemption by the corporation and, if made
subject to such redemption, the times, prices and other terms and conditions of
such redemption; (iv) the terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series; (v) whether or not the
shares of such series shall be convertible into or exchangeable for shares of
any other class or classes of any stock or any other series of any class of
stock of the corporation, and, if provision is made for conversion or exchange,
the times, prices, rates, adjustments, and other terms and conditions of such
conversion or exchange; (vi) the extent, if any, to which the

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holders of shares of such series shall be entitled to vote with respect to the
election of directors or otherwise; (vii) the restrictions, if any, on the issue
or reissue of any additional shares of such series; and (viii) the rights of the
holders of the shares of such series upon the liquidation, dissolution or
distribution of assets of the corporation.

2. In accordance with this Article FOURTH, the Board of Directors has designated
certain shares of preferred stock into a series with the voting powers,
preferences, rights, qualifications, limitations and restrictions with respect
to the Series A Preferred of the corporation as set forth herein in Article
Fourth, paragraph C below.

C. SERIES A PREFERRED STOCK

1. Designation. The designation of the series of preferred stock shall be “8.0%
Non-Cumulative Convertible Perpetual Preferred Stock, Series A”. Each share of
Series A Preferred shall be identical in all respects to every other share of
Series A Preferred. The Series A Preferred will rank senior to Junior Stock with
respect to the payment of dividends and/or the distribution of assets in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company.

2. Number of Shares. The number of authorized shares of Series A Preferred shall
be 2,400,000 [Subject to increase in certain circumstances if Designated
Preferred is issued]. The Company shall have the authority to issue fractional
shares of Series A Preferred.

3. Definitions. As used solely within this paragraph C of this Article FOURTH,
the following terms shall have the meanings set forth below:

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Beneficial Ownership Limitation” shall have the meaning set forth in paragraph
C(7)(b) of this Article FOURTH.

“Business Day” means any weekday that is not a legal holiday in New York, New
York or Chicago, Illinois and is not a day on which banking institutions in New
York, New York or Chicago, Illinois are authorized or required by law or
regulation to be closed.

“Closing Price” of the Common Stock on any date of determination means the
closing sale price or, if no closing sale price is reported, the last reported
sale price at 4:00 p.m., New York City time of the Common Stock on the Nasdaq
Global Select Market on such date. If the Common Stock is not traded on the
Nasdaq Global Select Market on any date of determination, the Closing Price of
the Common Stock on such date of determination means the closing sale

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

price as reported in the composite transactions for the principal U.S. national
or regional securities exchange on which the Common Stock is so listed, or, if
no closing sale price is reported, the last reported sale price on the principal
U.S. national or regional securities exchange on which the Common Stock is so
listed at 4:00 p.m., New York City time, or if the Common Stock is not so listed
on a U.S. national or regional securities exchange, but is quoted on the OTC
Bulletin Board (or any successor thereof), the last quoted bid price thereon at
4:00 p.m., New York City time, or if the Common Stock is not listed on a
national or regional securities exchange or quoted on the OTC Bulletin Board (or
any successor thereof), the last quoted bid price for the Common Stock in the
over-the-counter market as reported by Pink Sheets LLC or similar organization
at 4:00 p.m., New York City time, or, if that bid price is not available, the
market price of the Common Stock on that date as determined by a nationally
recognized investment banking firm (unaffiliated with the corporation) retained
by the corporation for this purpose.

“Common Stock” means the common stock of the corporation, par value $0.01 per
share, or any other shares of the capital stock of the corporation into which
such shares of common stock shall be reclassified or changed.

“Conversion Agent” means the Transfer Agent acting in its capacity as conversion
agent for the shares of the Series A Preferred, and its successors and assigns.

“Conversion at the Option of the Corporation Date” has the meaning set forth in
paragraph C(9)(c) of this Article FOURTH.

“Conversion Date” has the meaning set forth in paragraph C(8)(d) of this Article
FOURTH.

“Conversion Price” is $10.00, as adjusted from time to time as provided in
Section 10.

“Conversion Rate” means, for each share of Series A Preferred, an amount equal
to the quotient of $25.00 (subject to adjustment for stock splits, combinations
or reclassifications of the Series A Preferred), divided by the Conversion Price
in effect at the time of conversion.

“Distribution” shall have the meaning set forth in paragraph C(10)(b) of this
Article FOURTH.

“Dividend Conversion Date” means the earliest to occur of the following:

(i) the first date on which the average of VWAP of the Common Stock has exceeded
200% of the then applicable Conversion Price of the Series A Preferred for at
least 20 Trading Days within any period of 30 consecutive Trading Days occurring
after the second anniversary of the Closing (as defined in the Stock Purchase
Agreement); or

(ii) the first date on which the average of the VWAP of the Common Stock has
exceeded 130% of the then-applicable Conversion Price of the Series A Preferred
for at least 20 Trading Days within any period of 30 consecutive Trading Days
occurring after the third anniversary of the Closing; and

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(iii) the Fifth Anniversary Date.

“Dividend Payment Date” shall have the meaning set forth in paragraph C(4)(a) of
this Article FOURTH.

“Dividend Period” shall have the meaning set forth in paragraph C(4)(a) of this
Article FOURTH.

“Dividend Record Date” shall have the meaning set forth in paragraph C(4)(a) of
this Article FOURTH.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.

“Ex-date” when used with respect to any issuance or distribution, means the
first date on which the shares of Common Stock or other securities trade without
the right to receive an issuance or distribution.

“Fifth Anniversary Date” is             , 2013 [the fifth anniversary of the
issuance of the Series A Preferred].

“Holder” means the Person in whose name shares of the Series A Preferred are
registered, which may be treated by the corporation, Transfer Agent, Registrar,
paying agent and Conversion Agent as the absolute owner of such shares of Series
A Preferred for the purpose of making payment and settling the related
conversions and for all other purposes.

“Junior Stock” means the Common Stock and any other class or series of stock of
the corporation now or hereafter authorized.

“Liens” means any security interests, liens, claims, pledges, mortgages,
options, rights of first refusal, agreements, limitations on voting rights,
charges, easements, servitudes, encumbrances and other restrictions of any
nature whatsoever.

“Limited Holder” shall have the meaning set forth in paragraph C(7)(b) of this
Article FOURTH.

“Liquidation Event” shall have the meaning set forth in paragraph C(5)(a) of
this Article FOURTH.

“Mandatory Conversion Event” means the earlier to occur of the following dates:

(i) the Fifth Anniversary Date; and

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(ii) the first date after a Dividend Conversion Date has occurred on which the
outstanding shares of Series A Preferred represent less than 10% of the Total
Voting Power of Company.

“Market Disruption Event” means any of the following events that has occurred:

(i) any suspension of, or limitation imposed on, trading by any exchange or
quotation system on which the Closing Price is determined pursuant to the
definition of the Trading Day (a “Relevant Exchange”) during the one-hour period
prior to the close of trading for the regular trading session on the Relevant
Exchange (or for purposes of determining the VWAP per share of Common Stock any
period or periods aggregating one hour or longer during the regular trading
session on the relevant day) and whether by reason of movements in price
exceeding limits permitted by the Relevant Exchange, or otherwise relating to
the Common Stock or in futures or options contracts relating to the Common Stock
on the Relevant Exchange;

(ii) any event (other than an event described in clause (iii)) that disrupts or
impairs (as determined by the corporation in its reasonable discretion) the
ability of market participants during the one-hour period prior to the close of
trading for the regular trading session on the Relevant Exchange (or for
purposes of determining the VWAP per share of Common Stock any period or periods
aggregating one hour or longer during the regular trading session on the
relevant day) in general to effect transactions in, or obtain market values for,
the Common Stock on the Relevant Exchange or to effect transactions in, or
obtain market values for, futures or options contracts relating to the Common
Stock on the Relevant Exchange; or

(iii) the failure to open of the Relevant Exchange on which futures or options
contracts relating to the Common Stock are traded or the closure of such
exchange prior to its respective scheduled closing time for the regular trading
session on such day (without regard to after hours or any other trading outside
of the regular trading session hours) unless such earlier closing time is
announced by such exchange at least one hour prior to the earlier of the actual
closing time for the regular trading session on such day and the submission
deadline for orders to be entered into such exchange for execution at the actual
closing time on such day.

“Notice of Conversion at the Option of the Corporation” has the meaning set
forth in paragraph C(9)(c) of this Article FOURTH.

“Officer” means each of the Chief Executive Officer, the Chairman, the Chief
Administrative Officer, any Vice Chairman, the Chief Financial Officer, the
Controller, the Chief Accounting Officer, the Treasurer, the General Counsel and
Corporate Secretary and any Assistant Secretary of the corporation.

“Officers’ Certificate” means a certificate signed (i) by the Chief Executive
Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the
Chief Financial Officer, the Controller or the Chief Accounting Officer of the
corporation, and (ii) by the Treasurer, the General Counsel and Corporate
Secretary or any Assistant Secretary of the corporation, and delivered to the
Conversion Agent.

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“Person” means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, limited liability
company or trust.

“Purchase Rights” shall have the meaning set forth in paragraph C(10)(c) of this
Article FOURTH.

“Registrar” means the Transfer Agent acting in its capacity as registrar for the
Series A Preferred, and its successors and assigns.

“Relevant Exchange” has the meaning set forth above in the definition of Market
Disruption Event.

“Sale Transaction” means any consolidation or merger of the corporation or
similar transaction or any sale, lease or other transfer in one transaction or a
series of transactions of all or substantially all of the property and assets of
the corporation to any Person, in each case pursuant to which the Common Stock
will be converted into cash, securities or other property, other than pursuant
to a transaction in which the Persons that “beneficially owned” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, voting stock of the
corporation immediately prior to such transaction beneficially own, directly or
indirectly, voting stock representing a majority of the total voting power of
all outstanding classes of voting stock of the continuing or surviving Person
immediately after the transaction.

“SEC” means the Securities and Exchange Commission.

“Stock Purchase Agreement” means the Securities Purchase Agreement, dated as of
September 4, 2008, by and among the corporation and each of the investors listed
on the Schedule of Buyers attached thereto.

“Total Voting Power of the Company” means the total combined voting power of all
outstanding shares of all classes of capital stock of the corporation that are
then entitled to vote in matters presented to a vote of the corporation’s
stockholders generally.

“Trading Day” means, for purposes of determining a VWAP or Closing Price per
share of Common Stock or a Closing Price, a Business Day on which the Relevant
Exchange is scheduled to be open for business and on which there has not
occurred or does not exist a Market Disruption Event.

“Transfer Agent” means                                          acting as
Transfer Agent, Registrar, paying agent and Conversion Agent for the Series A
Preferred, and its successors and assigns.

“VWAP” per share of the Common Stock on any Trading Day means the per share
volume-weighted average price as displayed under the heading Bloomberg VWAP on
Bloomberg page C UN <equity> AQR (or its equivalent successor if such page is
not available) in respect of the period from the official open of trading on the
relevant Trading Day until the official close of trading on the relevant Trading
Day (or if such volume-weighted average price is unavailable, the market price
of one share of Common Stock on such Trading Days determined, using a
volume-weighted average method, by a nationally recognized investment banking
firm (unaffiliated with the corporation) retained for this purpose by the
corporation).

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4. Dividends.

(a) Rate. Holders shall be entitled to receive, if, as and when declared by the
corporation’s Board of Directors or any duly authorized committee thereof, but
only out of assets legally available therefor, non-cumulative dividends on the
liquidation preference of $25.00 per share (subject to adjustment for stock
splits, combinations or reclassifications of the Series A Preferred) of Series A
Preferred, and no more, payable quarterly in arrears on each
January 15, April 15, July 15 and October 15, commencing on January 15, 2009;
provided, however, if any such day is not a Business Day, then payment of any
dividend otherwise payable on that date will be made on the next succeeding day
that is a Business Day, unless that next succeeding day falls in the next
calendar year, in which case payment of such dividend will occur on the
immediately preceding Business Day (in either case, without any interest or
other payment in respect of such delay) (each such day on which dividends are
payable a “Dividend Payment Date”). The period from and including the date of
issuance of the Series A Preferred or any Dividend Payment Date to, but
excluding, the next Dividend Payment Date is a “Dividend Period.” Dividends on
each share of Series A Preferred will accrue on the liquidation preference of
$25.00 per share (subject to adjustment for stock splits, combinations or
reclassifications of the Series A Preferred) at a rate per annum equal to 8.0%.
The record date for payment of dividends on the Series A Preferred will be the
30th day of the calendar month immediately preceding the month during which the
Dividend Payment Date falls or such other record date fixed by the corporation’s
Board of Directors or any other duly authorized committee thereof that is not
more than 30 nor less than 10 days prior to such Dividend Payment Date (each, a
“Dividend Record Date”). Any such day that is a Dividend Record Date will be a
Dividend Record Date whether or not such day is a Business Day. The amount of
dividends payable will be computed on the basis of a 360-day year of twelve
30-day months. Dividends shall be payable in cash.

(b) Limitation on Accrual of Dividends. Notwithstanding anything in this
paragraph C(4) of this Article FOURTH to the contrary, from and after a Dividend
Conversion Date, except for any previously declared dividends, Holders shall no
longer be entitled to receive any dividends pursuant to paragraph C(4)(a) of
this Article FOURTH; provided that, in the event that the Board of Directors or
any duly authorized committee thereof shall determine to pay any cash or non
cash dividends or distributions on shares of Common Stock on or after the
Dividend Conversion Date, the Holders shall be entitled to receive cash and non
cash dividends or distributions in an amount and of kind equal to the dividends
or distributions that would have been payable to such Holder if the shares of
Series A Preferred held by such Holder had been converted into Common Stock
immediately prior to the record date for the determination of the holders of
Common Stock entitled to each such dividend or distribution.

(c) Non-Cumulative Dividends. Subject to paragraph C(4)(b) of this Article
FOURTH, if the corporation’s Board of Directors or any duly authorized committee
thereof does not declare a dividend on the Series A Preferred for any Dividend
Period prior to the related Dividend Payment Date, that dividend will not
accrue, and the corporation will have no

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obligation to pay, and Holders shall have no right to receive, a dividend for
that Dividend Period on the related Dividend Payment Date or at any future time,
whether or not dividends on the Series A Preferred or any other series of
preferred stock or common stock are declared for any subsequent Dividend Period
with respect to Series A Preferred, Junior Stock or any other class or series of
authorized preferred stock of the corporation. References herein to the
“accrual” of dividends refer only to the determination of the amount of such
dividend and do not imply that any right to a dividend arises prior to the date
on which a dividend is declared.

(d) Priority of Dividends. So long as any share of Series A Preferred remains
outstanding, unless as to a Dividend Payment Date, full dividends on all
outstanding shares of the Series A Preferred have been declared and paid or
declared and a sum sufficient for the payment of those dividends has been set
aside for the Dividend Period then ending, the corporation will not, and will
cause its subsidiaries not to, during the next succeeding Dividend Period that
commences on such Dividend Payment Date, declare or pay any dividend on, make
any distributions relating to, or redeem, purchase, acquire or make a
liquidation payment relating to, any Junior Stock, or make any guarantee payment
with respect thereto, other than:

(i) purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants of the corporation or any of its subsidiaries;

(ii) purchases of shares of Common Stock pursuant to a contractually binding
requirement to buy stock existing prior to the commencement of the then-current
dividend period, including under a contractually binding stock repurchase plan;
or

(iii) as a result of an exchange or conversion of any class or series of Junior
Stock for any other class or series of Junior Stock.

The foregoing restriction, however, will not apply to any Junior Stock dividends
paid by the corporation where the dividend stock is the same stock as that on
which the dividend is being paid.

Except as provided below, for so long as any share of Series A Preferred remains
outstanding, if dividends are not declared and paid in full upon the shares of
Series A Preferred, all dividends declared upon shares of Series A Preferred
will be declared on a proportional basis so that the amount of dividends
declared per share will bear to each other the same ratio that accrued dividends
for the then-current Dividend Period per share of Series A Preferred bear to
each other.

Subject to the foregoing and paragraph C(4)(b) of this Article FOURTH , and not
otherwise, such dividends payable in cash, stock or otherwise, as may be
determined by the corporation’s Board of Directors or any duly authorized
committee thereof, may be declared and paid on any Junior Stock from time to
time out of any assets legally available for such payment, and Holders will not
be entitled to participate in those dividends.

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(e) Conversion Following A Record Date. If a Conversion Date for any shares of
Series A Preferred is prior to the close of business on a Dividend Record Date
for any declared dividend for the then-current Dividend Period, the Holder of
such shares will not be entitled to any such dividend. If the Conversion Date
for any shares of Series A Preferred is after the close of business on a
Dividend Record Date for any declared dividend for the then-current Dividend
Period, but prior to the corresponding Dividend Payment Date, the Holder of such
shares shall be entitled to receive such dividend, notwithstanding the
conversion of such shares prior to the Dividend Payment Date. However, such
shares, upon surrender for conversion, must be accompanied by funds equal to the
dividend on such shares; provided that no such payment need be made (i) if the
corporation has issued a notice of a Sale Transaction during the then-current
Dividend Period or (ii) if the corporation has issued a notice of conversion at
its option of the Series A Preferred.

5. Liquidation Rights.

(a) Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the corporation (a “Liquidation
Event”), Holders shall be entitled, out of assets legally available therefor,
before any distribution or payment out of the assets of the corporation may be
made to or set aside with respect to any Junior Stock and subject to the rights
of the corporation’s creditors, to receive in full a liquidating distribution in
the amount of the liquidation preference of $25.00 per share (subject to
adjustment for stock splits, combinations or reclassifications of the Series A
Preferred), plus an amount equal to any accrued dividends thereon from the last
Dividend Payment Date to, but excluding, the date of the Liquidation Event if
and to the extent declared. Holders shall not be entitled to any further
payments in the event of any such Liquidation Event other than what is expressly
provided for in this paragraph C(5) of this Article FOURTH.

(b) Partial Payment. If the assets of the corporation are not sufficient to pay
in full the liquidation preference plus any dividends which have been declared
but not yet paid to all Holders, the amounts paid to the Holders shall be pro
rata in accordance with the respective aggregate liquidating distributions to
which they would otherwise be entitled.

(c) Residual Distributions. If the respective aggregate liquidating
distributions to which all Holders are entitled have been paid, the holders of
Junior Stock shall be entitled to receive all remaining assets of the
corporation according to their respective rights and preferences.

6. Sale Transaction.

(a) Liquidation Event. A Sale Transaction shall be deemed to be a Liquidation
Event for purposes of paragraph C(5) of Article FOURTH.

(b) Notices. In case at any time or from time to time:

(i) the corporation shall declare a dividend (or any other distribution) on its
shares of Common Stock; or

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(ii) the corporation shall enter into a binding, definitive agreement with
respect to a Sale Transaction;

then the corporation shall mail to each Holder of shares of Series A Preferred
at such holder’s address as it appears on the transfer books of the corporation,
as promptly as possible but in any event at least 30 days prior to the
applicable date hereinafter specified, a notice stating (A) the date on which a
record is to be taken for the purpose of such dividend, distribution or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record will be entitled to such dividend or distribution or (B) the date on
which such Sale Transaction is expected to become effective.

(c) Notwithstanding anything contained herein to the contrary, (i) each Holder
shall have the right, at such Holder’s option, to convert all or any portion of
such Holder’s Series A Preferred at any time prior to the consummation of a Sale
Transaction into shares of Common Stock as set forth in paragraph C(7) of this
Article FOURTH and subject to the conversion procedures of paragraph C(8) of
this Article FOURTH; and (ii) the corporation will not effect any Sale
Transaction unless proper provision is made to ensure that the Holders of shares
of Series A Preferred outstanding immediately prior to the Sale Transaction
shall be entitled to liquidating distributions as provided in paragraph C(5) of
this Article FOURTH.

7. Right of the Holders to Convert.

(a) General. Each Holder shall have the right, at such Holder’s option, to
convert all or any portion of such Holder’s Series A Preferred at any time into
shares of Common Stock at the Conversion Rate per share of Series A Preferred
(subject to the conversion procedures of paragraph C(8) of this Article FOURTH
and the other provisions hereof), plus cash in lieu of fractional shares.

(b) Beneficial Ownership Limitation. Notwithstanding paragraph C(7)(a) of this
Article FOURTH, the corporation shall not effect any conversion of shares of
Series A Preferred held by a Holder other than member of the Steans Family or
the Taylor Family (each as defined in Article FIFTH of this Third Amended and
Restated Certificate of Incorporation) or any Affiliate of any such member (any
such other Holder, a “Limited Holder”), and a Limited Holder shall not have the
right to convert any shares of Series A Preferred, to the extent that, after
giving effect to the conversion set forth in the applicable Conversion Notice,
such Limited Holder (together with such Limited Holder’s Affiliates, and any
other person or entity acting as a group together with such Limited Holder or
any of such Limited Holder’s Affiliates) would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below); provided, however that the
limitations set forth in this sentence shall not apply to any conversion of the
Series A Preferred (i) at the option of the corporation pursuant to paragraph 9
of this Article FOURTH or (ii) immediately prior to the consummation of a Sale
Transaction (provided that the Limited Holder may submit a Conversion Notice
with respect to such conversion prior thereto and contingent thereon). For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by such Limited Holder and its Affiliates shall include the
number of shares of Common Stock issuable upon conversion of the Series A
Preferred with

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respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which are issuable upon (A) conversion of the
remaining, unconverted shares of Series A Preferred beneficially owned by such
Limited Holder or any of its Affiliates and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the corporation
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by such Limited Holder or any of its
Affiliates. Except as set forth in the preceding sentence, for purposes of this
paragraph C(7)(b) of this Article FOURTH, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. The submission by a Holder of a
Conversion Notice shall be deemed to be a representation by such Holder that
such Holder has determined that all of the shares of Series A Preferred to be
converted as set forth in such Conversion Notice may be converted without
violating the restrictions set forth in this paragraph C(7)(b) of this Article
FOURTH, and the corporation shall have no obligation to verify or confirm the
accuracy of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this paragraph C(7)(b) of this Article FOURTH, in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as stated in the most recent
of the following: (A) the corporation’s most recent quarterly or annual report
filed with Commission, as the case may be, (B) a more recent public announcement
by the corporation or (C) a more recent written notice by the corporation or the
corporation’s transfer agent setting forth the number of shares of Common Stock
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of
the corporation, including the Series A Preferred, by such Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99%
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon the conversion of the
Series A Preferred by the applicable Holder as set forth in the applicable
Conversion Notice. The provisions of this paragraph C(7)(b) of this Article
FOURTH shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this paragraph C(7)(b) of this Article FOURTH to
correct this paragraph C(7)(b) of this Article FOURTH (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitations contained
in this paragraph C(7)(b) of this Article FOURTH shall apply to any successor
Limited Holder of shares of Series A Preferred.

8. Conversion Procedures.

(a) Conversion Date. Effective immediately prior to the close of business on any
applicable Conversion Date, dividends shall no longer be declared on any such
converted shares of Series A Preferred, and such shares of Series A Preferred
shall represent only the right to receive shares of Common Stock issuable upon
conversion of such shares, as set forth in paragraph C(7) of this Article
FOURTH, in each case, subject to the right of Holders to receive any declared
and unpaid dividends on such shares and any other payments to which they are
otherwise entitled pursuant to the terms hereof.

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(b) Rights Prior to Conversion. No allowance or adjustment, except pursuant to
paragraph C(10) of this Article FOURTH, shall be made in respect of dividends
payable to holders of the Common Stock of record as of any date prior to the
close of business on any applicable Conversion Date. Prior to the close of
business on any applicable Conversion Date, shares of Common Stock issuable upon
conversion of, or other securities issuable upon conversion of, any shares of
Series A Preferred shall not be deemed outstanding for any purpose, and Holders
shall have no rights with respect to the Common Stock or other securities
issuable upon conversion (including voting rights, rights to respond to tender
offers for the Common Stock or other securities issuable upon conversion or
rights to receive any dividends or other distributions on the Common Stock or
other securities issuable upon conversion) by virtue of holding shares of Series
A Preferred.

(c) Record Holder as of Conversion Date. The Person or Persons entitled to
receive the Common Stock issuable upon conversion of Series A Preferred shall be
treated for all purposes as the record holder(s) of such shares of Common Stock
as of the close of business on any applicable Conversion Date. In the event that
a Holder shall not by written notice designate the name in which shares of
Common Stock and/or cash, securities or other property (including payments of
cash in lieu of fractional shares) to be issued or paid upon conversion of
shares of Series A Preferred should be registered or paid or the manner in which
such shares should be delivered, the corporation shall be entitled to register
and deliver such shares, and make such payment, in the name of the Holder and in
the manner shown on the records of the corporation.

(d) Conversion Procedure. On the date of any conversion, if a Holder’s interest
is in certificated form, a Holder must do each of the following in order to
convert:

(i) complete and manually sign an irrevocable conversion notice in the form
provided by the Conversion Agent (a “Conversion Notice”), or a facsimile of such
Conversion Notice, and deliver such Conversion Notice to the Conversion Agent;

(ii) surrender the shares of Series A Preferred to the Conversion Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) if required, pay any stock transfer, documentary, stamp or similar taxes
not payable by the corporation pursuant to paragraph C(19)(a) of this Article
FOURTH; and

(v) if required, pay funds equal to any declared and unpaid dividend payable on
the next Dividend Payment Date to which such Holder is entitled.

Notwithstanding the foregoing, a Conversion Notice given by any Holder in
contemplation of a Sale Transaction or a public offering of Common stock may be
revocable and conditional upon the consummation of such Sale Transaction or
public offering, as applicable.

The term “Conversion Date” means the earlier of (x) the Conversion at the Option
of the Corporation Date (as defined in paragraph C(9)(c) of this Article
FOURTH), or (y) the date on

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which a Holder satisfies all of the requirements of this paragraph C(8)(d) of
this Article FOURTH. The Conversion Agent shall, on a Holder’s behalf, convert
the Series A Preferred into shares of Common Stock, in accordance with the terms
of the notice delivered by such Holder described in clause (i) of this paragraph
C(8)(d) of this Article FOURTH above.

9. Conversion at the Option of the Corporation.

(a) Corporation Conversion Right. The corporation shall have the right, at its
option, to cause some or all of the Series A Preferred to be converted into
shares of Common Stock at the then-applicable Conversion Rate at any time after
a Mandatory Conversion Event.

(b) Partial Conversion. If the corporation elects to cause less than all the
shares of the Series A Preferred to be converted under clause (a) above, the
Conversion Agent shall select the Series A Preferred to be converted on a pro
rata basis.

(c) Conversion Procedure. In order to exercise the conversion right described in
this paragraph C(9) of this Article FOURTH, the corporation shall provide notice
of such conversion to each Holder (such notice, a “Notice of Conversion at the
Option of the Corporation”). The Conversion Date shall be a date selected by the
corporation (the “Conversion at the Option of the Corporation Date”) and shall
be no more than 20 days after the date on which the corporation provides such
Notice of Conversion at the Option of the Corporation. In addition to any
information required by applicable law or regulation, the Notice of Conversion
at the Option of the Corporation shall state, as appropriate:

(i) the Conversion at the Option of the Corporation Date;

(ii) the aggregate number of shares of Series A Preferred to be converted; and

(iii) the number of shares of Common Stock to be issued upon conversion of each
share of Series A Preferred and, if fewer than all the shares of Series A
Preferred of a Holder are to be converted, the number of such shares to be
converted.

10. Anti-Dilution Adjustments.

(a) General. If the corporation at any time after the effective date hereof
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
its outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of shares of Common Stock obtainable upon
exercise of the Series A Preferred will be proportionately increased. If the
corporation at any time after the effective date hereof combines (by
combination, reverse stock split or otherwise) its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination will be proportionately increased and the
number of shares of Common Stock obtainable upon exercise of the Series A
Preferred will be proportionately decreased. Any subdivision or combination of
shares of Common Stock, and adjustment of the Conversion Price resulting
therefrom pursuant to this paragraph C(10) of this Article FOURTH, shall be
subject to the prior approval of the Executive Committee in accordance with
Article FIFTH hereof.

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(b) Distribution of Assets. If the corporation shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including
any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement or other
similar transaction but excluding any ordinary cash dividend payable with
respect to the Common Stock consistent with past practice) (a “Distribution”),
at any time after the issuance of the Series A Preferred and prior to a Dividend
Conversion Date, then, in each such case, the Conversion Price in effect
immediately prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive the Distribution
shall be reduced, effective as of the close of business on such record date, to
a price determined by multiplying such Conversion Price by a fraction of which
(A) the numerator shall be the VWAP of the Common Stock on the trading day
immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Board of Directors) applicable to one share of
Common Stock, and (B) the denominator shall be the VWAP of the Common Stock on
the trading day immediately preceding such record date.

(c) Purchase Rights. If at any time the corporation grants, issues or sells any
options to purchase shares of Common Stock, convertible securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of its capital stock (the “Purchase Rights”) prior to a
Dividend Conversion Date, then each Holder will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights that
such Holder could have acquired if such Holder had held the number of shares of
Common Stock acquirable upon complete conversion of such Holder’s shares of
Series A Preferred immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is
taken, the date as of which the record holders of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.

(d) No Fractional Shares. No fractional shares of Common Stock will be issued to
holders of the Series A Preferred upon conversion. In lieu of fractional shares
otherwise issuable, holders will be entitled to receive an amount in cash equal
to the fraction of a share of Common Stock, calculated on an aggregate basis in
respect of the shares of Series A Preferred being converted, multiplied by the
Closing Price of the Common Stock on the Trading Day immediately preceding the
applicable Conversion Date.

11. Voting Rights.

(a) General. The Holders shall not be entitled to vote on any matter except as
set forth in this paragraph C(11) of this Article FOURTH or as required by
Delaware law.

(b) General Voting Rights. Each share of Series A Preferred shall entitle the
Holder thereof to vote on all matters voted on by holders of the capital stock
of the corporation into which such share of Series A Preferred is convertible,
voting together as a single class with the other shares entitled to vote, at all
meetings of stockholders of the corporation, including with

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respect to the election of directors. With respect to any such vote in which the
Holders participate, the shares of Series A Preferred shall entitle the Holder
thereof to cast the number of votes equal to the lesser of (i) the total number
of votes which could be cast in such vote by a holder of the number of shares of
capital stock of the corporation into which such shares of Series A Preferred
are convertible on the record date for such vote (giving effect to paragraph
C(7)(b) of this Article FOURTH) and (ii) the product of the aggregate number of
shares of Series A Preferred held by such Holder, multiplied by 1.961 (subject
to adjustment for stock splits, combinations or reclassifications).

12. Consents. Except as otherwise required by applicable law, the consent of the
Holders of a majority of the number of shares of Series A Preferred at the time
outstanding, given in person or by proxy, either in writing or by vote, at a
special or annual meeting, voting or consenting as a separate class, shall be
necessary to: (i) authorize or issue, or obligate the corporation to issue, any
other capital stock or security or right convertible or exchangeable for capital
stock of the corporation that is senior to or on a parity with the Series A
Preferred as to payment of dividends or rights on liquidation; (ii) issue any
shares of Series A Preferred; (iii) increase the authorized number of shares of
the Series A Preferred; (iv) enter any agreement, contract or understanding or
otherwise incur any obligation which by its terms would violate or be in
conflict in any material respect with the rights or preferences of the Series A
Preferred designated hereunder; (v) amend the Certificate of Incorporation or
By-laws of the corporation, if such amendment would alter or change the powers,
preferences or special rights of the holders of the Series A Preferred so as to
affect them adversely; or (vi) amend or waive any provision of this paragraph C
of this Article FOURTH.

13. Preemptive Rights. For so long as either (x) at least 800,000 shares of
Series A Preferred are issued and outstanding (subject to anti dilution
adjustment for stock splits, stock dividends and the like) or (y) the
outstanding shares of Series A Preferred represent 10% or more of the Total
Voting Power of the Company:

(a) Each Holder shall have the right to purchase, pro rata, a portion of any New
Securities (as hereinafter defined) that the corporation may, from time to time
hereafter, propose to sell and issue. Each such Holder’s pro rata share of New
Securities, for the purposes of this right, is the ratio of the sum of (x) the
number of shares of Common Stock into which the shares of Series A Preferred
have been converted and which are held of record by such Holder at the time the
New Securities are offered and (y) the number of shares of Common Stock into
which the shares of Series A Preferred held by such Holder at the time the New
Securities are offered are then convertible (the “Conversion Shares”) to the
total number of then outstanding shares of Common Stock, including such
Conversion Shares and the Conversion Shares then issuable upon all other then
outstanding shares of Series A Preferred. “New Securities” shall mean any shares
of capital stock or securities or rights convertible, exercisable or
exchangeable for capital stock of the corporation (“Convertible Securities”);
provided, however, that New Securities does not include:

(i) capital stock issued or issuable on conversion or exercise of the Series A
Preferred, options or warrants to purchase Common Stock or other convertible
securities that either are (x) outstanding on the date of the effectiveness of
this paragraph C of this Article FOURTH, (y) warrants to purchase Common Stock
issued on or within 90 days after the date of

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the effectiveness of this paragraph C of this Article FOURTH in connection with
the offering of up to $60,000,000 of subordinated indebtedness by the
corporation’s wholly-owned subsidiary Cole Taylor Bank; or (z) issued after the
date of the effectiveness of this paragraph C of this Article FOURTH, provided
that, in the case of this clause (z) only, the rights established by this
paragraph C(13) of this Article FOURTH applied with respect to the initial
issuance by the corporation of such options, warrants or convertible securities;

(ii) capital stock or Convertible Securities issued by the corporation pursuant
to any public offering;

(iii) Common Stock issued in connection with any stock split, payment of a
dividend or other distribution in respect of its capital stock or
recapitalization of the corporation;

(iv) capital stock or Convertible Securities issued to a third party in
connection with any acquisition of the stock or assets of another Person by the
corporation or any of its subsidiaries by merger, purchase, joint venture or
other reorganization or business combination;

(v) shares of Common Stock, options to purchase Common Stock or other rights
with respect thereto issued to employees, officers, directors or consultants of
the corporation or any of its subsidiaries;

(vi) capital stock or Convertible Securities issued to a third party in
consideration of services provided by such third party;

(vii) capital stock issued to a third party in connection with a debt financing
consummated by the corporation or any of its subsidiaries; and

(vii) trust preferred securities.

(b) If the corporation proposes to undertake an issuance of New Securities, it
shall give each Holder written notice of its intention, describing the type of
New Securities, the price and the general terms and conditions upon which the
corporation proposes to issue the same. Each such Holder shall have 25 calendar
days from the giving of such notice to agree to purchase its pro rata share of
New Securities for the price and upon the terms and conditions specified in the
notice by giving written notice to the corporation and stating therein the
quantity of New Securities to be purchased.

(c) If any of the Holders fail to exercise its right under this paragraph C(13)
of this Article FOURTH to purchase its pro-rata share of the New Securities
within 25 calendar days following the date of the first notice contemplated by
paragraph C(13)(b) of this Article FOURTH, the corporation shall have until the
90th day following such date to enter into a letter of intent or definitive
agreement and a period of 90 days thereafter to sell any of the New Securities
in respect of which such Investor’s rights were not exercised, at a price and
upon terms and conditions no more favorable to the purchasers thereof than
specified in the corporation’s notice to the Holders pursuant to paragraph
C(13)(b) of this Article FOURTH. If the corporation has not entered into such a
letter of intent or agreement or sold such New

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Securities within such period, the corporation shall not thereafter issue or
sell any such New Securities without again first offering such securities to the
Holders in the manner provided in this paragraph C(13) of this Article FOURTH.

14. Unissued or Reacquired Shares. Shares of Series A Preferred that have been
issued and converted, redeemed or otherwise purchased or acquired by the
corporation shall be retired upon their acquisition, shall not be reissued as
shares of Series A Preferred and, upon the taking of any action required by law,
shall be restored to the status of authorized but unissued shares of preferred
stock without designation as to series.

15. No Sinking Fund. Shares of Series A Preferred are not subject to the
operation of a sinking fund.

16. Reservation of Common Stock.

(a) Sufficient Shares. The corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock or shares acquired by
the corporation, solely for issuance upon the conversion of shares of Series A
Preferred as provided in this paragraph C of this Article FOURTH, free from any
preemptive or other similar rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all the shares of
Series A Preferred then outstanding (without giving effect to the paragraph
C(7)(b) of this Article FOURTH). For purposes of this paragraph C(16)(a) of this
Article FOURTH, the number of shares of Common Stock that shall be deliverable
upon the conversion of all outstanding shares of Series A Preferred shall be
computed as if at the time of computation all such outstanding shares were held
by a single Holder (without giving effect to paragraph C(7)(b) of this Article
FOURTH).

(b) Use of Acquired Shares. Notwithstanding the foregoing, the corporation shall
be entitled to deliver upon conversion of shares of Series A Preferred, as
herein provided, shares of Common Stock acquired by the corporation and held as
treasury shares (in lieu of the issuance of authorized and unissued shares of
Common Stock), so long as any such acquired shares are free and clear of all
liens, charges, security interests or encumbrances (other than liens, charges,
security interests and other encumbrances created by the Holders).

(c) Free and Clear Delivery. All shares of Common Stock delivered upon
conversion of the Series A Preferred shall, upon issuance, be duly authorized,
validly issued, fully paid and non-assessable, free and clear of all liens,
claims, security interests and other encumbrances (other than liens, charges,
security interests and other encumbrances created by the Holders).

(d) Compliance with Law. Prior to the delivery of any securities that the
corporation shall be obligated to deliver upon conversion of the Series A
Preferred, the corporation shall use its reasonable best efforts to comply with
any federal and state laws and regulations thereunder requiring the registration
of such securities with, or any approval of or consent to the delivery thereof
by, any governmental authority.

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(e) Listing. The corporation hereby covenants and agrees that, if at any time
the Common Stock shall be traded on the Nasdaq Global Select Market or any other
national securities exchange, the corporation will, if permitted by the rules of
such exchange, list and keep listed, so long as the Common Stock shall be so
listed on such exchange, all the Common Stock issuable upon conversion of the
Series A Preferred; provided, however, that if the rules of such exchange
require the corporation to defer the listing of such Common Stock until the
first conversion of Series A Preferred into Common Stock in accordance with the
provisions hereof, the corporation covenants to list such Common Stock issuable
upon conversion of the Series A Preferred in accordance with the requirements of
such exchange at such time.

17. Transfer Agent, Conversion Agent, Registrar and Paying Agent. The duly
appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the
Series A Preferred shall be [                    ]. The corporation may, in its
sole discretion, remove the Transfer Agent in accordance with the agreement
between the corporation and the Transfer Agent; provided that the corporation
shall appoint a successor transfer agent that shall accept such appointment
prior to the effectiveness of such removal. Upon any such removal or
appointment, the corporation shall send notice thereof by first-class mail,
postage prepaid, to the Holders.

18. Replacement Certificates.

(a) Mutilated, Destroyed, Stolen and Lost Certificates. If physical certificates
are issued, the corporation shall replace any mutilated certificate at the
Holder’s expense upon surrender of that certificate to the Transfer Agent. The
corporation shall replace any certificate that becomes destroyed, stolen or lost
at the Holder’s expense upon delivery to the corporation and the Transfer Agent
of satisfactory evidence that the certificate has been destroyed, stolen or
lost, together with any indemnity and bond that may be required by the Transfer
Agent and the corporation.

(b) Certificates Following Conversion. If physical certificates are issued, the
corporation shall not be required to issue any certificates representing the
Series A Preferred on or after the applicable Conversion Date. In place of the
delivery of a replacement certificate following the applicable Conversion Date,
the Transfer Agent, upon delivery of the evidence and indemnity described in
clause (a) above, shall deliver the shares of Common Stock pursuant to the terms
of the Series A Preferred formerly evidenced by the certificate.

19. Taxes.

(a) Transfer Taxes. The corporation shall pay any and all stock transfer,
documentary, stamp and similar taxes that may be payable in respect of any
issuance or delivery of shares of Series A Preferred or shares of Common Stock
or other securities issued on account of Series A Preferred pursuant hereto or
certificates representing such shares or securities; provided, however, that the
corporation shall not be required to pay any such tax that may be payable in
respect of any transfer involved in the issuance or delivery of shares of Series
A Preferred, shares of Common Stock or other securities in a name other than
that in which the shares of Series A Preferred with respect to which such shares
or other securities are issued or

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delivered were registered, or in respect of any payment to any Person other than
a payment to the registered holder thereof, and shall not be required to make
any such issuance, delivery or payment unless and until the Person otherwise
entitled to such issuance, delivery or payment has paid to the corporation the
amount of any such tax or has established, to the satisfaction of the
corporation, that such tax has been paid or is not payable.

(b) Withholding. All payments and distributions (or deemed distributions) on the
shares of Series A Preferred (and on the shares of Common Stock received upon
their conversion) shall be subject to withholding and backup withholding of tax
to the extent required by law, subject to applicable exemptions, and amounts
withheld, if any, shall be treated as received by the Holders.

20. Notices. All notices referred to in this paragraph C of this Article FOURTH
shall be in writing, and, unless otherwise specified herein, all notices
hereunder shall be deemed to have been given (i) upon receipt, when delivered
personally; (ii) one Business Day after deposit with an overnight courier
service; or (iii) three Business Days after the mailing thereof if sent by
registered or certified mail (unless first class mail shall be specifically
permitted for such notice under the terms of this paragraph C of this Article
FOURTH) with postage prepaid, in each case addressed: (x) if to the corporation,
to its office at 9550 West Higgins Road, Rosemont, Illinois 60018 (Attention:
Corporate Secretary) or to the Transfer Agent at its office at
[                    ] (Attention: Corporate Trust Office), or other agent of
the corporation designated as permitted by this paragraph C of this Article
FOURTH, or (y) if to any Holder, to such Holder at the address of such Holder as
listed in the stock record books of the corporation (which may include the
records of the Transfer Agent) or (z) to such other address as the corporation
or any such Holder, as the case may be, shall have designated by notice
similarly given.

D. ISSUANCE OF STOCK. Subject to any applicable preemptive rights of any series
of Preferred Stock as may then be outstanding, shares of capital stock of the
corporation may be issued by the corporation from time to time, in accordance
with the procedures set forth in the corporation’s By-laws, in such amounts and
proportions and for such consideration (not less than the par value thereof in
the case of capital stock having par value) as may be fixed and determined from
time to time by the Board of Directors and as shall be permitted by law.

FIFTH: For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation and of its directors and stockholders, it is further
provided that:

A. Upon the initial issuance of Series A Preferred by the corporation and
continuing until the earlier of (i)             , 2013 [the 5th anniversary of
Series A closing], and (ii) the date on which neither (x) at least 800,000
shares of Series A Preferred are issued and outstanding (subject to
anti-dilution adjustment for stock splits, stock dividends and the like with
respect to the Series A Preferred), nor (y) the outstanding shares of Series A
Preferred represent 10% or more of the total combined voting power of all
outstanding shares of all classes of capital stock which are then entitled to
vote in matters presented to a vote of the corporation’s stockholders generally:

1. The power and authority conferred upon the Board of Directors by the DGCL
shall be exercised and performed, in accordance with Section 141(a) thereof, by
the Board of Directors of the corporation; provided, however, that pursuant to
Section 141(a) of the DGCL certain of such powers and authority of the Board of
Directors shall also be exercised by and require the further approval of the
Executive Committee as provided in this paragraph A of Article FIFTH.

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2. There is hereby established the Executive Committee, which shall have the
power and authority provided herein. The Executive Committee shall not be a
committee of the Board of Directors as provided in Section 141(c) of the DGCL,
but shall instead be a separate body pursuant to Section 141(a) of the DGCL and
shall consist of three members of the Board of Directors, one of whom shall at
all times be Harrison I. Steans, Jennifer W. Steans, or a director designated
for nomination by Financial Investments Corporation (“FIC”) (the “FIC
Designee”), one of whom shall at all times be a director designated for
nomination by the Taylor Family at all times that such right exists (the “Taylor
Designee”), and one of whom shall be the most senior executive of the
corporation serving on the Board of Directors of the corporation who, other than
through involvement in the corporation, is not an affiliate of either the Steans
Family or the Taylor Family (the “Senior Officer”). The Executive Committee
initially shall be comprised of Harrison I. Steans as Chairman (the initial FIC
Designee), Mark A. Hoppe, President of the corporation (the initial Senior
Officer), and Bruce W. Taylor, Chief Executive Officer of the corporation (the
initial Taylor Designee). Each such person shall be a member of such committee
for so long as such person remains a member of the Board of Directors or until
his earlier death, Permanent Disability (as defined herein) or resignation by
written notice delivered to the Corporate Secretary at the principal executive
office of the corporation (the “Term of Service”). Each of Jennifer W. Steans
and Jeffrey W. Taylor shall have the right to attend and observe Executive
Committee meetings for so long as they serve on the Board of Directors of the
corporation.

Vacancies.

FIC Designee. Upon the conclusion of the Term of Service of Harrison I. Steans
as a member of the Executive Committee, he shall be succeeded as Chairman and a
member of the Executive Committee by Jennifer W. Steans. Upon the conclusion of
the Term of Service of Jennifer W. Steans, the resulting vacancy in such seat on
the Executive Committee, and any subsequent vacancies in such seat of the
Executive Committee, shall be filled by one of the then-serving directors
nominated by FIC within 30 days thereafter by written notice signed by the
then-serving directors nominated by FIC to the Corporate Secretary at the
principal executive offices of the corporation; provided, however, that in the
event such then-serving directors nominated by FIC do not designate such
successor within 30 days or there are no then-serving directors nominated by
FIC, then the successor FIC Designee shall, within 30 days after the end of such
first 30-day period, be filled by the then-serving director who was issued
(directly or to an Affiliate of such person) by the Company, in its initial
issuance of the Series A Preferred, the greatest number of shares of Series A
Preferred (or if such person is unwilling to serve as the FIC Designee, the
then-serving director who was issued (directly or to an Affiliate of such
person) by the Company, in its initial issuance of the Series A Preferred, the
second greatest number of

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shares of Series A Preferred) upon the initial issuance of the Series A
Preferred (in each case other than any director who is a member of the Taylor
Family or nominated by the Taylor Family and other than the Senior Officer)
within 30 days thereafter by written notice delivered by such person to the
Corporate Secretary at the principal executive offices of the corporation;
provided, however, that if no such notice is delivered within such time period,
the successor FIC Designee shall be appointed by a majority of all of the
members of the Board of Directors (excluding any director who is a member of the
Taylor Family or was nominated by the Taylor Family and excluding the Senior
Officer).

Taylor Designee. Upon the conclusion of the Term of Service of Bruce W. Taylor
as a member of the Executive Committee, the resulting vacancy on the Executive
Committee, and any subsequent vacancies in such seat of the Executive Committee,
shall be filled by one of the then-serving directors nominated by the Taylor
Family within 30 days thereafter by written notice signed by the then-serving
directors nominated by the Taylor Family to the Corporate Secretary at the
principal executive offices of the corporation; provided, however, that in the
event such then-serving directors nominated by the Taylor Family do not
designate such successor within 30 days or there are no then-serving directors
nominated by the Taylor Family, then the successor Taylor Designee shall, within
30 days after the end of such first 30-day period, be appointed by a majority of
all of the members of the Board of Directors (excluding any director who is a
member of the Steans Family or nominated by FIC and excluding the Senior
Officer).

Senior Officer. Upon the conclusion of the Term of Service of Mark A. Hoppe as a
member of the Executive Committee, the resulting vacancy on the Executive
Committee, and any subsequent vacancies in such seat of the Executive Committee,
shall be filled by the then-current Senior Officer.

Chairman. The Chairman of the Executive Committee shall provide reasonable
notice of all meetings to each other member of the Executive Committee. Each
member of the Executive Committee shall have the right to propose matters for
consideration by the Executive Committee. Harrison I. Steans shall serve as
Chairman of the Executive Committee for so long as he is a member of such
committee. Jennifer W. Steans shall serve as Chairman of the Executive Committee
for so long as she is a member of such committee. Following the Term of Service
of Jennifer W. Steans, the Chairman of the Executive Committee shall be Bruce W.
Taylor or his successor selected pursuant to the last sentence of the paragraph
above captioned “Taylor Designee” for so long as such person’s Term of Service
on the Executive Committee is continuing). In the event Bruce W. Taylor or his
successor is for any reason unable to succeed Harrison I. Steans or Jennifer W.
Steans (as the case may be) as Chairman of the Executive Committee or if he
succeeds either of them and thereafter ceases to serve as Chairman of the
Executive Committee, the Senior Officer serving on the Executive Committee at
such time shall succeed him as Chairman of the Executive Committee.

Other. A quorum of the Executive Committee shall not be deemed present unless at
least two-thirds of the members of the Executive Committee are present. The
Executive Committee shall have the authority to retain special legal, accounting
or other consultants or experts as necessary or advisable to advise the
Executive Committee. The corporation shall provide appropriate funding for such
matters and for the ordinary administrative expenses of the Executive Committee
that are necessary or appropriate in carrying out its duties.

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3. Matters Requiring Unanimous Executive Committee Approval: Pursuant to Section
141(a) of the DGCL, the corporation and/or the Board of Directors of the
corporation (or any committee thereof) shall not, without the prior approval of
all of the members of the Executive Committee (by affirmative vote at a duly
called meeting or by written consent signed by all three members of the
Executive Committee), directly or indirectly:

(a) authorize, approve, or enter into any agreement with respect to, or
consummate, any merger, consolidation or other business combination by the
corporation or any Controlled Affiliate of the corporation into or with any
other Person, other than any transaction involving only the corporation and/or
one or more directly or indirectly wholly-owned Subsidiaries of the corporation;

(b) authorize, approve, or enter into any agreement with respect to, or
consummate, any acquisition by the corporation or any Controlled Affiliate of
any assets or properties (including stock or other equity interests of a third
party) of any other Person in one transaction or a series of related
transactions, where such transaction has (or considering any contingent
consideration could have) an aggregate purchase price or value in excess of
$1,000,000;

(c) authorize, approve, or issue, or obligate the corporation or any Controlled
Affiliate to issue any equity securities, including securities convertible,
exercisable or exchangeable for any equity security, other than in connection
with: (i) that certain Securities Purchase Agreement dated September 4, 2008,
and any of the securities issued pursuant to, or upon the exercise, conversion
or exchange of securities issued pursuant to, any of the Transactions
contemplated by the Transaction Documents, including the securities issued
pursuant to the Subdebt and Warrant Transaction (as such terms are defined
therein); (ii) the exercise of employee stock options or other compensatory
equity incentives outstanding upon the effectiveness of this Third Amended and
Restated Certificate of Incorporation, and (iii) the grant and exercise of
equity compensation awards to employees, officers, directors or consultants of
the corporation or its subsidiaries; provided, however, that this exception
(iii) shall apply with respect to employees, officers, directors or consultants
of the corporation or its Subsidiaries who are Related Persons only if such
awards are (A) comparable in size and terms to grants being made to similarly
situated Persons who are not Related Persons, (B) approved by the Compensation
Committee of the Board of Directors, the Audit Committee of the Board of
Directors or the full Board of the Directors, or (C) with respect to any Related
Person who is not an employee of the corporation or its Subsidiaries,
compensation for service on the Board of Directors of the corporation or
committees thereof;

(d) authorize, approve, or enter into any agreement with respect to, or
consummate, any (i) disposition by the corporation or any Controlled Affiliate
of any assets or properties (including stock or other equity interests of a
third party) in one transaction or a series of related transactions having an
aggregate value in excess of $1,000,000, or (ii) any liquidation or dissolution
of the corporation or any Controlled Affiliate with assets or properties
(including

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stock or other equity interests of a third party) having an aggregate value in
excess of $1,000,000 (other than, in the case of a Controlled Entity, a
disposition (or liquidation or dissolution where all of the assets and
properties of the liquidated or dissolved Controlled Entity are distributed)
solely to the Company and/or one or more of its wholly-owned Subsidiaries);

(e) authorize, approve, or issue, or obligate the corporation or any Controlled
Affiliate to, directly or indirectly, issue, guarantee or otherwise become
obligated with respect to any Indebtedness other than Permitted Indebtedness;

(f) authorize, approve, or issue, or obligate the corporation or any Controlled
Affiliate to, directly or indirectly, purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness of the corporation or any of its
Controlled Affiliates excluding (i) any inter-company Indebtedness between or
among the corporation and any of its wholly-owned Subsidiaries, or (ii) any
Permitted Indebtedness, except for regularly scheduled or otherwise required
payments;

(g) authorize, approve, or issue, or obligate the corporation or any Controlled
Affiliate to, directly or indirectly, create or permit to exist any Lien on any
of its real or personal properties, assets or rights of whatsoever nature
(whether now owned or hereafter acquired) except (i) for Permitted Liens and
(ii) in connection with real property leases, letters of credit and other
agreements and documentation entered into in connection therewith;

(h) authorize, approve, or issue, or obligate the corporation or any Controlled
Affiliate to, enter into any agreement, contract or arrangement restricting the
ability of any Controlled Affiliate of the corporation to pay or make dividends
or distributions in cash or kind to the corporation, to make loans, advances or
other payments of whatsoever nature to the corporation, or to make transfers or
distributions of all or any part of its assets to the corporation, in each case
other than (i) restrictions on specific assets which assets are the subject of
purchase money security interests or deposit arrangements, (ii) customary
anti-assignment provisions contained in leases and licensing agreements entered
into by the corporation or such Controlled Affiliate in the ordinary course of
its business, (iii) in connection with any Requirement of Law and (iv) in
connection with any agreement for the sale or other disposition of a Controlled
Affiliate that restricts distributions by that Controlled Affiliate pending the
sale or other disposition;

(i) authorize, approve or permit the corporation or any of its Controlled
Affiliates to, directly or indirectly, create or otherwise permit, cause or
suffer to exist or become effective, including without limitation by
authorizing, approving or permitting any election to defer the payment of
interest related to any Indebtedness (including, without limitation, any
subordinated debentures of the corporation or any Controlled Affiliate), any
consensual encumbrance or restriction on the ability of the corporation or any
Controlled Affiliate to (a)(i) pay dividends or make any other distributions on
its capital stock to the corporation or any of its Controlled Affiliates or with
respect to any other interest or participation in, or measured by, its profits
or (ii) pay any Indebtedness owed to the corporation or any of its Controlled
Affiliates, (b) make loans or advances to the corporation or any of its
Controlled Affiliates or (c) sell, lease or transfer any of its properties or
assets to the corporation or any of its Controlled Affiliates,

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except for such encumbrances or restrictions existing under or by reason of
(i) the terms of the Transaction Documents; (ii) the Series A Preferred;
(iii) an applicable Requirement of Law; (iv) customary non-assignment provisions
in contracts and licenses entered into in the ordinary course of business;
(v) any agreement for the sale or other disposition of a Controlled Affiliate
that restricts distributions by that Controlled Affiliate pending the sale or
other disposition; and (vi) Permitted Liens;

(j) authorize, approve, or enter into or modify any transaction, arrangement or
relationship (or any series of similar transactions, arrangements or
relationships) (including any Indebtedness or guarantee of Indebtedness) in
which the corporation (including any of its Controlled Affiliates) was, is or
will be a participant and the amount involved will or may reasonably be expected
to exceed $120,000, and in which any Related Person (as defined below) had, has
or will have a direct or indirect interest, other than (i) transactions subject
to Regulation O (Loans to Executive Officers, Directors and Principal
Shareholders) that have been reviewed and approved by the Loan Committee and the
Board of Directors of the Cole Taylor Bank and the corporation, as required, in
accordance with Cole Taylor Bank’s policy with respect thereto, (ii) with
respect to any Related Party who is an employee of the corporation or any of its
Subsidiaries (but not an executive officer or director of the corporation),
compensation matters to (A) the extent that the total compensation and benefits
being provided to such Related Person is comparable in size and terms as those
being provided to similarly situated persons serving in the same or similar
capacity, or (B) approved by the Compensation Committee of the Board of
Directors, the Audit Committee of the Board of Directors or the full Board of
the Directors, (iii) with respect to any Related Party who is a director or
executive officer of or consultant to the corporation, compensation matters to
the extent approved by the Compensation Committee of the Board of Directors, the
Audit Committee of the Board of Directors or the full Board of the Directors,
(iv) with respect to any Related Person who is not an employee of the
corporation or its Subsidiaries, compensation for service on the Board of
Directors of the corporation or committees thereof; (v) compensatory benefits
provided to all employees of the corporation or its Subsidiaries generally or to
all salaried employees of the corporation or its Subsidiaries generally; or
(vi) transactions in which the interest of the Related Person arises solely from
the ownership of a class of the corporation’s securities and all holders of that
class receive the same benefit on a pro rata basis;

(k) authorize, approve, adopt, amend or repeal (A) any provision of any board
committee charter or other document in a manner that would usurp any power or
authority of the Executive Committee provided for herein, or impair the ability
of the Executive Committee to exercise any such power or authority, (B) any
provision of any Bylaw (as it may be amended from time to time) of the
corporation (other than any such Bylaw actions taken solely by action of
stockholders of the corporation in their capacity as such), or (C) any provision
of this Certificate of Incorporation (as it may be amended from time to time);

(l) change the authorized size of the Board to fewer than 11 members or greater
than 13 members;

(m) authorize any stock split, reorganization, consolidation, recapitalization
or similar action involving the corporation or any Controlled Affiliate;

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(n) authorize or approve the hiring, promotion or termination of any Person who
reports directly to the President or Chief Executive Officer of the corporation;
or

(o) authorize, approve, adopt or enter into any Change in Control Arrangement
with any Person; provided that, if the members of the Executive Committee
approve a form of Change in Control Arrangement for officers at or above a
certain level, the corporation may thereafter enter into such Change in Control
Arrangement with any newly hired or promoted officers at or above such level.

Any purported approval or action with respect to any of the foregoing matters
without such unanimous approval of the Executive Committee shall be void and of
no effect and shall not be an authorized act of the corporation.

4. Matters Requiring Majority Executive Committee Approval: Pursuant to Section
141(a) of the DGCL, the corporation and/or the Board of Directors of the
corporation (or any committee thereof other than the Executive Committee) shall
not, without the approval by a majority of all of the members of the Executive
Committee, directly or indirectly:

(a) authorize or approve the entry by Cole Taylor Bank into any significant new
line of business;

(b) authorize or approve Cole Taylor Bank to open any new branch bank or
otherwise commence conducting business in any material respect within a new
geographic location;

(c) authorize or approve the annual budget of the corporation; or

(d) authorize the declaration or payment of any dividend on any capital stock of
the Corporation or any Controlled Affiliate, or the making of any distribution
to, or any other action with respect to the declaration or payment of dividends
or distributions to, stockholders of the corporation or the equity holders of
any Controlled Affiliate of the corporation (other than to the corporation or a
wholly-owned Subsidiary).

Any action required or permitted to be taken at any meeting of the Executive
Committee may be taken without a meeting if all three members of the Executive
Committee consent thereto in writing or by electronic transmission. Any action
of the Executive Committee effected by written consent hereunder shall be
effective only upon delivery of an executed copy thereof to (i) each member of
the Executive Committee and (ii) to the Corporate Secretary at the principal
executive office of the corporation.

Any purported approval or action with respect to any of the foregoing matters
without such majority approval of the Executive Committee shall be void and of
no effect and shall not be an authorized act of the corporation.

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5. Certain Definitions. Unless the context otherwise requires, the terms defined
in this paragraph shall have, for all purposes of this Article FIFTH, the
meanings herein specified:

“Change in Control Arrangement” means any plan, agreement, program, policy,
arrangement, trust, or instrument that provides for a benefit or a payment or
vesting in any benefit or payment, to or for the benefit of any Person as a
result of any event, simultaneous events, or series of events over time, at
least one of which would include a corporate transaction of any kind (including
by way of example only and not limitation, any reorganization, merger,
consolidation, liquidation, dissolution, sale or other disposition of any
securities or assets, or a “going private” transaction within the meaning of
Section 13(e) of the 1934 Act), any addition to or change in the composition of
the Board of Directors or other governing body of the corporation or any
Subsidiaries or other Controlled Affiliates of the corporation, any change in
the beneficial ownership of the corporation or any Subsidiaries or other
Controlled Affiliates of the corporation, or any other similar transactions.

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto, other than
obligations resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business.

“Control” shall mean the direct or indirect power to direct the management and
policies of any Person, whether through the ownership of voting securities, by
contract, management agreement or otherwise.

“Controlled Affiliate” shall mean, as to any Person, any other Person which is
Controlled by such Person; provided, however, that the corporation shall not be
deemed to be a Controlled Affiliate of any Person or such Person’s Controlled
Affiliates.

“Indebtedness” of any Person means, without duplication (i) all items arising
from the borrowing of money that, according to generally accepted accounting
principles in the United States, would be included in determining total
liabilities as shown on the consolidated balance sheet of such Person or any
Subsidiary of such Person; (ii) all obligations secured by any Lien in property
owned by such Person whether or not such obligations shall have been assumed;
(iii) all guarantees and similar contingent liabilities with respect to
obligations of others; (iv) all monetary obligations under any leasing or
similar arrangement which, in connection with generally accepted accounting
principles in the United States, consistently applied for the periods covered
thereby, are classified as a capital leases; and (v) all other obligations
(including, without limitation, letters of credit, surety bonds and other
similar instruments) evidencing obligations to others; provided, however,
Indebtedness shall not include trade payables incurred in the ordinary course of
business and, in the case of Cole Taylor Bank, Indebtedness shall not include
deposits or other indebtedness incurred in the ordinary course of business and
in accordance with customary banking practices and applicable laws and
regulations.

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“Liens” means any security interests, liens, claims, pledges, mortgages,
options, rights of first refusal, agreements, limitations on voting rights,
charges, easements, servitudes, encumbrances and other restrictions of any
nature whatsoever.

“Permanent Disability” shall mean a mental or physical condition that renders an
Executive Committee member incapable, after reasonable accommodation, of
carrying out such Person’s essential duties with respect to the Executive
Committee, which condition has existed for at least consecutive three months,
and which, in the professional opinion of a physician selected by the Board and
reasonably acceptable to the Executive Committee member or his legal
representative, is permanent or expected to last for an indefinite duration.

“Permitted Indebtedness” means (i) Indebtedness in existence as of the date of
adoption of the Third Amended and Restated Certificate of Incorporation and
reflected in the corporation’s consolidated balance sheet for the fiscal quarter
ended June 30, 2008 as filed by the corporation with the Securities and Exchange
Commission on August 8, 2008, (ii) Contingent Obligations in existence as of the
date of adoption of the Third Amended and Restated Certificate of Incorporation
and reflected in the corporation’s consolidated balance sheet for the fiscal
quarter ended June 30, 2008 as filed by the corporation with the Securities and
Exchange Commission on August 8, 2008, (iii) purchase money Indebtedness
incurred in connection with the acquisition, repair, improvement or construction
of any property, equipment or other asset of the corporation or any of its
Subsidiaries, (iv) any compensation related loans, guarantees or other
arrangements with employees of the corporation or any of its Subsidiaries,
(v) any Indebtedness incurred in the ordinary course of business by the
corporation or any of its Subsidiaries, and (vi) any replacement or refinancing
or any of the Indebtedness described (A) in clauses (i) and (ii) above if the
amount of such replacement or refinancing, whether in a single transaction or in
a series of related transactions, involves less than $1,000,000; or (B) in
clauses (iii) through (v) above.

“Permitted Liens” means (i) Liens securing the Permitted Indebtedness;
(ii) Liens for taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by appropriate
proceedings and for which the corporation maintains adequate reserves;
(iii) Liens to secure payment of workers’ compensation, employment insurance,
old age pensions, social security or other like obligations incurred in the
ordinary course of business; (iv) Liens incurred in connection with the
extension, renewal or refinancing of indebtedness secured by Liens of the type
described in clauses (i) through (iii) above, provided that any extension,
renewal or replacement Lien shall be limited to the property (together with any
accessions thereto and proceeds thereof) encumbered by any such Lien and the
amount of such Permitted Lien does not exceed the amount of the Lien extended,
renewed or refinanced; (v) carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business and
securing obligations that are not due and payable or which are being contested
in good faith for which adequate reserves have been established; (vi) pledges
and deposits made in the ordinary course of business in compliance with
workmen’s compensation, unemployment insurance and other social security laws or

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regulations; and (vii) easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property imposed by law or arising in the
ordinary course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the corporation and the Subsidiaries.

“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization, government or agency or political subdivision thereof, or other
entity, whether acting in an individual, fiduciary or other capacity.

“Related Person” shall mean (i) any person who is, or at any time since the
beginning of the corporation’s last completed fiscal year was, a director or
executive officer of the corporation or a nominee to become a director of the
corporation; (ii) any person who is known to be the beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (“Exchange
Act”)) of more than 5% of any class of the corporation’s voting securities
registered pursuant to Section 12(b) or 12(g) of the Exchange Act; (iii) any
immediate family member of any of the foregoing persons, which means any child,
stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director,
executive officer, nominee or more than 5% beneficial owner, and any person
(other than a tenant or employee) sharing the household of such director,
executive officer, nominee or more than 5% beneficial owner; or (iv) any firm,
corporation or entity in which any of the foregoing persons is employed or is a
general partner or principal or in a similar position, or in which such person,
together with all other Related Persons, have in the aggregate a 10% or greater
beneficial ownership interest.

“Requirement of Law” shall mean any judgment, order (whether temporary,
preliminary or permanent), writ, injunction, decree, statute, rule, regulation,
notice, law or ordinance and shall also include any rules, regulations and
interpretations of any applicable self-regulatory organizations.

“Steans Family” shall mean Harrison I. Steans, Jennifer W. Steans, the spouses,
descendants, or spouses of descendants of any one or more of the foregoing
persons, any estates, trusts (including charitable remainder trusts),
custodianships or guardianships formed or to be formed primarily for the benefit
of any one or more of the foregoing persons, and any proprietorships,
partnerships, limited liability companies, foundations or corporations
controlled directly or indirectly by any one or more of the foregoing persons or
entities.

“Subsidiary” of any Person shall mean (i) a corporation a majority of the
capital stock of which, having voting power under ordinary circumstances to
elect directors, is at the time, directly or indirectly, owned by such Person
and/or one or more Subsidiaries of such Person and (ii) any other Person (other
than a corporation) in which such Person and/or one or more Subsidiaries of such
Person, directly or indirectly, has (x) a majority ownership interest or (y) the
power to elect or direct the election of a majority of the members of the
governing body of such first-named Person.

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“Taylor Family” shall mean Jeffrey W. Taylor, Bruce W. Taylor, Iris Tark Taylor,
Cindy Taylor Robinson, the spouses, descendants, or spouses of descendants of
any one or more of the foregoing persons, any estates, trusts (including
charitable remainder trusts), custodianships or guardianships formed or to be
formed primarily for the benefit of any one or more of the foregoing persons,
and any proprietorships, partnerships, limited liability companies, foundations
or corporations controlled directly or indirectly by any one or more of the
foregoing persons or entities.

6. The members of the Executive Committee shall be fully entitled to all rights
and benefits to the same extent as a director of the corporation, including with
respect to actions and inactions as a member of such Executive Committee, in
respect of indemnification, the advancement of expenses by the corporation, and
related matters as provided in this Third Amended and Restated Certificate of
Incorporation, the By-Laws, the DGCL and any agreements between the corporation
and any such Person. Such rights for indemnification and advancement of expenses
shall each vest at the time a Person first becomes a member of the Executive
Committee, shall remain vested as to a Person who has ceased to be a member of
the Executive Committee, shall inure to the benefit of the heirs, executors and
administrators of such Person, and shall not be decreased or diminished in scope
without such Person’s written consent.

B. 1. From and after the date that is the earlier of (i)                     ,
2013 [the 5th anniversary of Series A closing], and (ii) the first date on which
both (x) fewer than 800,000 shares of Series A Preferred are issued and
outstanding (subject to anti-dilution adjustment for stock splits, stock
dividends and the like with respect to the Series A Preferred), and (y) the
outstanding shares of Series A Preferred represent less than 10% of the total
combined voting power of all outstanding shares of all classes of capital stock
which are then entitled to vote in matters presented to a vote of the
corporation’s stockholders generally, the business and affairs of the
corporation shall be managed by, or under the direction of, the Board of
Directors and no actions of the Board of Directors shall require the separate
approval of the Executive Committee pursuant to Article FIFTH, Paragraph A. 3
and A.4 of this Third Amended and Restated Certificate of Incorporation.

2. Each director shall be elected for a one-year term. At each annual meeting of
the corporation’s stockholders, directors will be elected, by the holders of the
shares entitled to vote generally in the election of directors, to succeed those
directors whose terms are expiring. Except as hereinafter provided, a director
shall hold office until the annual meeting of stockholders of the corporation in
the year in which his or her term expires and until his or her successor shall
be elected and shall qualify, subject, however, to such director’s prior death,
resignation, retirement or removal from office. Subject to the terms of any
series of Preferred Stock then outstanding, one or more directors may be removed
from office, and a new director or directors may be elected to fill the vacancy
or vacancies created by such removal, by a vote of stockholders at a duly called
meeting of stockholders. Except as required by law or the provisions of this
Certificate of Incorporation or the terms of any series of Preferred Stock then
outstanding, all vacancies on the Board of Directors and newly-created
directorships may be filled by the Board of Directors. Any director elected to
fill a vacancy not resulting from an increase in the number of directors shall
have the same remaining term as that of his or her predecessor.

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Notwithstanding the foregoing, whenever the holders of any one or more classes
or series of Preferred Stock issued by the corporation shall have the right,
voting separately by class or series, to elect one or more directors at an
annual or special meeting of stockholders, the election, term of office, filling
of vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation and any resolutions of the Board of
Directors applicable thereto.

SIXTH: Stockholder Action. Any action required or permitted to be taken by the
stockholders of the corporation shall be effected only at a duly called annual
or special meeting of stockholders of the corporation and shall not be effected
by consent in writing by the holders of outstanding stock pursuant to
Section 228 of the DGCL or any other provisions thereof.

Notwithstanding the foregoing, any vote required or permitted to be taken at any
annual or special meeting of stockholders of the corporation that requires a
separate vote of the holders of Series A Preferred voting as a single class, may
be taken by the holders of Series A Preferred without a meeting, without prior
notice and without a vote, if a consent or consents in writing or electronic
transmission, setting forth the action so taken, shall be given by the holders
of Series A Preferred having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares of Series A Preferred entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to the Corporate Secretary of
the corporation at its principal executive offices.

SEVENTH:

A. Amendment of By-Laws. Except as otherwise provided in Article FIFTH and this
Article SEVENTH, the Board of Directors of the corporation is authorized to
adopt, amend or repeal the By-laws of the corporation, subject to applicable
law. The affirmative vote of the holders of a majority of the total outstanding
voting stock of the corporation, present in person or represented by proxy, at
any meeting of stockholders at which a quorum is present shall be required to
amend, alter or repeal, or to adopt any provision inconsistent with, Sections
2.3, 2.6, 2.9, 3.2, 4.4, and 8.1(b) of the By-laws of the corporation, as
amended, and in effect on the date hereof; provided that, so long as either of
the last two paragraphs of Section 2.9 of the By-laws of the corporation, as
amended, and in effect on the date hereof, is and remains operative, then the
affirmative vote of the holders of at least 85% of the total outstanding voting
stock of the corporation, present in person or represented by proxy, at any
meeting of stockholders at which a quorum is present shall be required to amend,
alter or repeal, or to adopt any provision inconsistent with each such
paragraph.

B. Election of Directors. Elections of Directors need not be by written ballot
unless the By-laws of the corporation shall so provide.

C. Meetings of Stockholders. Meetings of stockholders may be held within or
without the State of Delaware, as the By-laws of the corporation may provide.

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D. Books of Corporation. The books of the corporation may be kept at such place
within or without the State of Delaware as the By-laws of the corporation may
provide or as may be designated from time to time by the Board of Directors of
the corporation.

EIGHTH: Whenever a compromise or arrangement is proposed between the corporation
and its creditors or any class of them and/or between the corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or the
stockholders or class of stockholders of the corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the corporation, as the case may be, and also on the
corporation.

NINTH: No Director or Executive Committee member of the corporation shall be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a Director or Executive Committee member,
provided that this Article NINTH shall not eliminate or limit the liability of a
Director or Executive Committee member: (i) for any breach of the Director or
Executive Committee member’s duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under Section 174 of
the DGCL (or the corresponding provision of any successor act or law); or
(iv) for any transaction from which the Director or Executive Committee member
derived an improper personal benefit. No amendment, alteration or repeal of this
Article NINTH shall apply to or have any effect on the rights of any individual
referred to in this Article NINTH or with respect to acts or omissions of such
individual occurring prior to such amendment, alteration or repeal. If the DGCL
is amended after the effective date of this Article to further eliminate or
limit, or to authorize further elimination or limitation of, the personal
liability of directors or Executive Committee members for breach of fiduciary
duty as a director or Executive Committee member, then the personal liability of
a director or Executive Committee member to the corporation or its stockholders
shall be eliminated or limited to the full extent permitted by the DGCL.

TENTH: Subject to paragraph A of Article FIFTH, the corporation reserves the
right to amend or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon a stockholder herein are granted subject to this
reservation; provided, however, that until the earlier of
(i)                     , 2013 [the 5th anniversary of Series A closing], and
(ii) the first date on which both (x) fewer than 800,000 shares of Series A
Preferred are issued and outstanding (subject to anti-dilution adjustment for
stock splits, stock dividends and the like with respect to the Series A
Preferred), and (y) the

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outstanding shares of Series A Preferred represent less than 10% of the total
combined voting power of all outstanding shares of all classes of capital stock
which are then entitled to vote on matters presented to a vote of the
corporation’s stockholders generally, the affirmative vote of the holders of at
least 66- 2/3 % of the total outstanding voting stock of the corporation,
present in person or represented by proxy, at any meeting of stockholders at
which a quorum is present shall be required to amend, alter or repeal, or to
adopt any provision inconsistent with Article FIFTH.

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IN WITNESS WHEREOF, the corporation has caused this Certificate of Incorporation
to be signed by its Chairman of the Board on                     , 2008.

 

TAYLOR CAPITAL GROUP, INC. By:  

 

 

Bruce W. Taylor

Chairman of the Board

c/o Cole Taylor Bank

9550 West Higgins Road

Rosemont, Illinois 60018

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EXHIBIT C

FORM OF VOTING AGREEMENT

[Copy of Voting Agreement attached as Exhibit 10.1 to this Form 8-K]

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EXHIBIT D

SUBORDINATED BANK DEBT AND WARRANT TERM SHEET

Contemplated Terms of Subordinated Bank Notes

 

Issuer:    Cole Taylor Bank (the “Bank”), a wholly-owned subsidiary of Taylor
Capital Group, Inc. (the “Company”). Securities Offered:    8-year subordinated
notes (the “Notes”). Amount Offered:    $60,000,000 aggregate principal amount;
$1,000 face amount. Settlement Date:    Upon the closing of the Company’s
Preferred Stock Offering (the “Closing”). Maturity:    The Notes will mature on
the eighth anniversary of the Closing. Coupon Rate:    The Notes will pay
interest at an annual rate of 10% until maturity, and at an annual rate of 15%
on any accrued interest outstanding on and after the maturity date. Interest
Payments:   

Interest on the Notes will be payable quarterly, in arrears.

 

Interest will be computed on the basis of a 360-day year and twelve 30-day
months.

Redemption Provisions:    The Bank will have the option to redeem the Notes, in
whole or in part, at any time after three years of the Closing (subject to
certain conditions). Transfer restrictions:    The Notes may be assigned or
transferred without the consent of the Bank, subject to compliance with
applicable federal securities laws. Credit Rating:    The Notes will not be
rated. Ranking:    The Notes will be subordinated unsecured obligations of the
Bank and will not be guaranteed by the Company or any subsidiary of the Company
or the Bank. For so long as they are deemed to be Tier 2 capital under
applicable banking regulations, the Notes will be subordinate to all deposits
and general creditors of the Bank. Manner of Sale:    Private placement exempt
from registration pursuant to Rule 506 of Regulation D.

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Contemplated Terms of Warrants

 

Issuer:    The Company Eligible Investors:    Persons who are accredited
investors as defined under Regulation D of the Securities Act of 1933, as
amended. Securities Offered:    For each $1,000 face amount of the Notes
purchased, the Company shall issue one detachable warrant (collectively, the
“Warrants”) to acquire fifteen (15) shares of its common stock, par value $0.01
per share (the “Common Stock”). Manner of Sale:    Private placement pursuant to
Rule 506 of Regulation D. Exercise Price:    The exercise price for the Warrants
will be equal to $10.00 per share (subject to customary adjustment for stock
splits, stock dividends and similar events). Settlement Date:    The settlement
date shall be the date of Closing. Expiration Date:    The Warrants shall expire
on the fifth anniversary of the Closing. Exercise:    On or after the 180th day
following the Closing, the Warrants may be exercised at any time prior to their
expiration date, at the holder’s option, in cash provided for the Exercise Price
thereof.

Company Conversion

Option:

   The Company may require holders of the Warrants to convert each Warrant into
shares of Common Stock, if at any time after (a) the third anniversary of the
Closing, the volume weighted-average per share price of the Common Stock equals
or exceeds 130% of the Exercise Price for at least 20 trading days in a period
of 30 consecutive trading days, or (b) after the second anniversary of the
Closing, the volume weighted-average per share price of the Common Stock equals
or exceeds 200% of the Exercise Price for at least 20 trading days in a period
of 30 consecutive trading days.

Transfer and Lock-Up

Provisions:

  

The Warrants shall be detachable from the Notes and, subject to applicable
limitations, may be transferred separately from the Notes.

 

50% of the Warrants will be transferable on or after the first anniversary of
the Closing, and 100% of the Warrants will be freely transferable on or after
the second anniversary of the Closing.

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EXHIBIT E

FORM OF DESIGNATED PREFERRED

CERTIFICATE OF DESIGNATION

OF

SERIES B CONVERTIBLE PREFERRED STOCK

OF

TAYLOR CAPITAL GROUP, INC.

 

 

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

 

 

Taylor Capital Group, Inc., a Delaware corporation (the “Company”), hereby
certifies that:

1. The Second Amended and Restated Certificate of Incorporation of the Company
(the “Certificate of Incorporation”) fixes the total number of shares of all
classes of capital stock that the Company shall have the authority to issue at
eighteen million (18,000,000) shares of common stock, par value $.01 per share,
and five million (5,000,000) shares of preferred stock, par value $.01 per
share.

2. The Certificate of Incorporation expressly grants to the Board of Directors
of the Company (the “Board of Directors”) authority to provide for the issuance
of the shares of preferred stock in series, and to establish from time to time
the number of shares to be included in each such series and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.

3. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation, the Board of Directors, by action duly taken on
            , 2008, adopted resolutions (i) authorizing the issuance and sale of
up to 2,400,000 shares of the Company’s preferred stock and (ii) approving this
final form of the Certificate of Designation of Series B Convertible Preferred
Stock, establishing the number of shares to be included in the series of
Preferred Stock and fixing the designation, powers, preferences and rights of
the shares of this Series B Preferred Stock and the qualifications, limitations
or restrictions thereof as follows:

Section 1. Designation.

The designation of the series of preferred stock shall be Series B Convertible
Preferred Stock (the “Convertible Preferred Stock”). Each share of Convertible
Preferred Stock shall be identical in all respects to every other share of
Convertible Preferred Stock. The Convertible Preferred Stock will rank senior to
Junior Stock with respect to the payment of dividends and/or the distribution of
assets in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company.

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Section 2. Number of Shares.

The number of authorized shares of Convertible Preferred Stock shall be
2,400,000. The Company shall have the authority to issue fractional shares of
Convertible Preferred Stock.

Section 3. Definitions. As used herein with respect to Convertible Preferred
Stock:

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Affiliated Entity” of a Person means any entity where such Person: (i) is a
partner, executive officer or controlling shareholder or (ii) would be the
beneficial owner of or have a pecuniary interest in the securities issued by the
Company.

“Board of Directors” has the meaning set forth in the recitals above.

“Business Day” means any weekday that is not a legal holiday in New York, New
York or Chicago, Illinois and is not a day on which banking institutions in New
York, New York or Chicago, Illinois are authorized or required by law or
regulation to be closed.

“Cap Allocation Amount” has the meaning set forth in Section 8(b).

“Closing” shall have the meaning set forth in Stock Purchase Agreement.

“Closing Price” of the Common Stock on any date of determination means the
closing sale price or, if no closing sale price is reported, the last reported
sale price at 4:00 p.m., New York City time, of the shares of the Common Stock
on the Nasdaq Global Select Market on such date. If the Common Stock is not
traded on the Nasdaq Global Select Market on any date of determination, the
Closing Price of the Common Stock on such date of determination means the
closing sale price as reported in the composite transactions for the principal
U.S. national or regional securities exchange on which the Common Stock is so
listed, or, if no closing sale price is reported, the last reported sale price
on the principal U.S. national or regional securities exchange on which the
Common Stock is so listed at 4:00 p.m., New York City time, or if the Common
Stock is not so listed on a U.S. national or regional securities exchange, but
is quoted on the OTC Bulletin Board (or any successor thereof), the last quoted
bid price thereon at 4:00 p.m., New York City time, or if the Common Stock is
not listed on a national or regional securities exchange or quoted on the OTC
Bulletin Board (or any successor thereof), the last quoted bid price for the
Common Stock in the over-the-counter market as reported by Pink Sheets LLC or
similar organization at 4:00 p.m., New York City time, or, if that bid price is
not available, the market price of the Common Stock on that date as determined
by a nationally recognized investment banking firm (unaffiliated with the
Company) retained by the Company for this purpose.

 

- 2 -

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“Common Stock” means the common stock of the Company, par value $0.01 per share,
or any other shares of the capital stock of the Company into which such shares
of common stock shall be reclassified or changed.

“Conversion Agent” means the Transfer Agent acting in its capacity as conversion
agent for the Convertible Preferred Stock, and its successors and assigns.

“Conversion Date” shall have the meaning set forth in Section 8(d).

“Conversion Notice” shall have the meaning set forth in Section 8(d).

“Conversion Price” is $10.00 or, in the case of any share of Convertible
Preferred Stock that is issued at the Closing to any officer, director or
employee of, or consultant to, the Company (excluding any Person that becomes a
director of the Company at the Closing) or any of its subsidiaries (or any
Affiliated Entity of any such Person or trust for the benefit of any such
Person), $12.75, in each case as adjusted from time to time as provided in
Section 10.

“Conversion Rate” means, for each share of Convertible Preferred Stock, an
amount equal to the quotient of $25 (subject to adjustment for stock splits,
combinations or reclassifications of the Convertible Preferred Stock), divided
by the Conversion Price in effect at the time of conversion.

“Convertible Preferred Stock” shall have the meaning set forth in Section 1.

“Dividend Payment Date” shall have the meaning set forth in Section 4(a).

“Dividend Period” shall have the meaning set forth in Section 4(a).

“Dividend Record Date” shall have the meaning set forth in Section 4(a).

“Exchange” shall have the meaning set forth in Section 9(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.

“Exchange Cap” shall have the meaning set forth in Section 7(b).

“Exchange Date” shall have the meaning set forth in Section 9(b).

“Ex-date” when used with respect to any issuance or distribution, means the
first date on which the shares of Common Stock or other securities trade without
the right to receive an issuance or distribution.

“Expiration Time” shall have the meaning set forth in Section 10(a)(v).

“Holder” means the Person in whose name the shares of the Convertible Preferred
Stock are registered, which may be treated by the Company, Transfer Agent,
Registrar, paying agent and Conversion Agent as the absolute owner of the shares
of Convertible Preferred Stock for the purpose of making payment and settling
the related conversions and for all other purposes.

 

- 3 -

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“Junior Stock” means the Common Stock and any other class or series of stock of
the Company now or hereafter authorized.

“Liquidation Event” shall have the meaning set forth in Section 5(a).

“Market Disruption Event” means any of the following events that has occurred:

(i) any suspension of, or limitation imposed on, trading by any exchange or
quotation system on which the Closing Price is determined pursuant to the
definition of the Trading Day (a “ Relevant Exchange “) during the one-hour
period prior to the close of trading for the regular trading session on the
Relevant Exchange (or for purposes of determining the VWAP per share of Common
Stock any period or periods aggregating one hour or longer during the regular
trading session on the relevant day) and whether by reason of movements in price
exceeding limits permitted by the Relevant Exchange, or otherwise relating to
Common Stock or in futures or options contracts relating to the Common Stock on
the Relevant Exchange;

(ii) any event (other than an event described in clause (iii)) that disrupts or
impairs (as determined by the Company in its reasonable discretion) the ability
of market participants during the one-hour period prior to the close of trading
for the regular trading session on the Relevant Exchange (or for purposes of
determining the VWAP per share of Common Stock any period or periods aggregating
one hour or longer during the regular trading session on the relevant day) in
general to effect transactions in, or obtain market values for, the Common Stock
on the Relevant Exchange or to effect transactions in, or obtain market values
for, futures or options contracts relating to the Common Stock on the Relevant
Exchange; or

(iii) the failure to open of the Relevant Exchange on which futures or options
contracts relating to the Common Stock are traded or the closure of such
exchange prior to its respective scheduled closing time for the regular trading
session on such day (without regard to after hours or any other trading outside
of the regular trading session hours) unless such earlier closing time is
announced by such exchange at least one hour prior to the earlier of the actual
closing time for the regular trading session on such day and the submission
deadline for orders to be entered into such exchange for execution at the actual
closing time on such day.

“Nonpayment” shall have the meaning set forth in Section 11(e)(i).

“Notice of Exchange” shall have the meaning set forth in Section 9(b).

“Officer” means each of the Chief Executive Officer, the Chairman, the Chief
Administrative Officer, any Vice Chairman, the Chief Financial Officer, the
Controller, the Chief Accounting Officer, the Treasurer, the General Counsel and
Corporate Secretary and any Assistant Secretary of the Company.

“Officers’ Certificate” means a certificate signed (i) by the Chief Executive
Officer, the Chairman, the Chief Administrative Officer, any Vice Chairman, the
Chief Financial Officer, the Controller or the Chief Accounting Officer of the
Company, and (ii) by the Treasurer, the General Counsel and Corporate Secretary
or any Assistant Secretary of the Company, and delivered to the Conversion
Agent.

 

- 4 -

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“Person” means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, limited liability
company or trust.

“Purchased Shares” shall have the meaning set forth in Section 10(a)(v).

“Record Date” shall have the meaning set forth in Section 10(d).

“Registrar” means the Transfer Agent acting in its capacity as registrar for the
Convertible Preferred Stock, and its successors and assigns.

“Relevant Exchange” has the meaning set forth above in the definition of Market
Disruption Event.

“Restated Charter” shall have the meaning set forth in the Stock Purchase
Agreement.

“Sale Transaction” means any consolidation or merger of the Company or similar
transaction or any sale, lease or other transfer in one transaction or a series
of transactions of all or substantially all of the property and assets of the
Company to any Person, in each case pursuant to which the Common Stock will be
converted into cash, securities or other property, other than pursuant to a
transaction in which the Persons that “beneficially owned” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, voting stock of the
Company immediately prior to such transaction beneficially own, directly or
indirectly, voting stock representing a majority of the total voting power of
all outstanding classes of voting stock of the continuing or surviving Person
immediately after the transaction.

“SEC” means the Securities and Exchange Commission.

“Series A Preferred” means the 8.0% Non-Cumulative Convertible Perpetual
Preferred Stock, Series A, to be authorized by the Restated Charter.

“Stock Purchase Agreement” means the Securities Purchase Agreement, dated as of
September 4, 2008, by and among the Company and each of the investors listed on
the Schedule of Buyers attached thereto.

“Trading Day” means, for purposes of determining a VWAP or Closing Price per
share of Common Stock or a Closing Price, a Business Day on which the Relevant
Exchange is scheduled to be open for business and on which there has not
occurred or does not exist a Market Disruption Event.

“Transfer Agent” means                      acting as Transfer Agent, Registrar,
paying agent and Conversion Agent for the Convertible Preferred Stock, and its
successors and assigns.

“VWAP” per share of the Common Stock on any Trading Day means the per share
volume-weighted average price as displayed under the heading Bloomberg VWAP on

 

- 5 -

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Bloomberg page C UN <equity> AQR (or its equivalent successor if such page is
not available) in respect of the period from the official open of trading on the
relevant Trading Day until the official close of trading on the relevant Trading
Day (or if such volume-weighted average price is unavailable, the market price
of one share of Common Stock on such Trading Day determined, using a
volume-weighted average method, by a nationally recognized investment banking
firm (unaffiliated with the Company) retained for this purpose by the Company).

Section 4. Dividends.

(a) Rate. Subject to Section 4(b) below, Holders shall be entitled to receive,
out of assets legally available therefor, cash dividends on the liquidation
preference of $25.00 per share of Convertible Preferred Stock (subject to
adjustment for stock splits, combinations or reclassifications of the
Convertible Preferred Stock), and no more, payable quarterly in arrears on each
January 15, April 15, July 15 and October 15; provided, however, that if any
such day is not a Business Day, then payment of any dividend otherwise payable
on that date will be made on the next succeeding day that is a Business Day,
unless that next succeeding day falls in the next calendar year, in which case
payment of such dividend will occur on the immediately preceding Business Day
(in either case, without any interest or other payment in respect of such delay)
(each such day on which dividends are payable, a “Dividend Payment Date”). The
period from and including the date of any Dividend Payment Date to, but
excluding, the next Dividend Payment Date is a “Dividend Period”; provided that
the first Dividend Period hereunder shall be the period from and including the
date of issuance of the Convertible Preferred Stock to, but excluding
January 15, 2009. Dividends on each share of Convertible Preferred Stock will
accrue on the liquidation preference of $25.00 per share (subject to adjustment
for stock splits, combinations or reclassifications of the Convertible Preferred
Stock) at a rate per annum equal to 16.0% with any unpaid dividends accruing on
a cumulative basis and compounding quarterly. The record date for payment of
dividends on the Convertible Preferred Stock will be the 30th day of the
calendar month immediately preceding the month during which the Dividend Payment
Date falls or such other record date fixed by the Board of Directors or any
other duly authorized committee thereof that is not more than 30 nor less than
10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”).
Any such day that is a Dividend Record Date will be a Dividend Record Date
whether or not such day is a Business Day. The amount of dividends payable will
be computed on the basis of a 360-day year of twelve 30-day months.

(b) Limitation on Accrual of Dividends. Notwithstanding anything in this
Section 4 to the contrary, in the event that the Exchange Date (as defined in
Section 9(b)) shall occur on or before November 15, 2008, then no dividends
shall be deemed to have accrued on the Convertible Preferred Stock (including
for purposes of Section 9(a)).

(c) Priority of Dividends. So long as any share of Convertible Preferred Stock
remains outstanding, unless full cash dividends on all outstanding shares of the
Convertible Preferred Stock have been declared and paid for all Dividend Periods
from the date of issuance of the Convertible Preferred Stock, the Company will
not, and will cause its subsidiaries not to, declare or pay any dividend on,
make any distributions relating to, or redeem, purchase, acquire or make a
liquidation payment relating to, any Junior Stock, or make any guarantee payment
with respect thereto, other than:

(i) purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants of the Company or any of its subsidiaries;

 

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(ii) purchases of shares of Common Stock pursuant to a contractually binding
requirement to buy stock existing prior to the commencement of the then-current
dividend period, including under a contractually binding stock repurchase plan;
or

(iii) as a result of an exchange or conversion of any class or series of Junior
Stock for any other class or series of Junior Stock.

The foregoing restriction, however, will not apply to any Junior Stock dividends
paid by the Company where the dividend stock is the same stock as that on which
the dividend is being paid.

Except as provided below, for so long as any share of Convertible Preferred
Stock remains outstanding, if dividends are not declared and paid in full upon
the shares of Convertible Preferred Stock, all dividends declared upon shares of
Convertible Preferred Stock will be declared on a proportional basis so that the
amount of dividends declared per share will bear to each other the same ratio
that accrued dividends for the then-current Dividend Period per share of
Convertible Preferred Stock bear to each other.

Subject to the foregoing, and not otherwise, such dividends payable in cash,
stock or otherwise, as may be determined by the Board of Directors or any duly
authorized committee thereof, may be declared and paid on any Junior Stock from
time to time out of any assets legally available for such payment, and Holders
will not be entitled to participate in those dividends.

(d) Conversion Following A Record Date. If a Conversion Date for any shares of
Convertible Preferred Stock is prior to the close of business on a Dividend
Record Date for any declared dividend for the then-current Dividend Period, the
Holder of such shares will not be entitled to any such dividend. If the
Conversion Date for any shares of Convertible Preferred Stock is after the close
of business on a Dividend Record Date for any declared dividend for the
then-current Dividend Period, but prior to the corresponding Dividend Payment
Date, the Holder of such shares shall be entitled to receive such dividend,
notwithstanding the conversion of such shares prior to the Dividend Payment
Date. However, such shares, upon surrender for conversion, must be accompanied
by funds equal to the dividend on such shares; provided that no such payment
need be made (i) if the Company has issued a notice of a Sale Transaction during
the then-current Dividend Period or (ii) if the Company has issued a notice of
mandatory exchange of the Convertible Preferred Stock.

Section 5. Liquidation Rights.

(a) Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company (a “Liquidation Event”),
Holders shall be entitled, out of assets legally available therefor, before any
distribution or payment out of the assets of the Company may be made to or set
aside with respect to any Junior Stock and subject to the rights of the
Company’s creditors, to receive in full a liquidating distribution in the amount
of the

 

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liquidation preference of $25.00 per share (subject to adjustment for stock
splits, combinations or reclassifications of the Convertible Preferred Stock),
plus any accrued but unpaid dividends thereon through the date of the
liquidation, dissolution or winding up. Holders shall not be entitled to any
further payments in the event of any such voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company other than what is
expressly provided for in this Section 5.

(b) Partial Payment. If the assets of the Company are not sufficient to pay in
full the liquidation preference plus any dividends which have been declared but
not yet paid to all Holders, the amounts paid to the Holders shall be pro rata
in accordance with the respective aggregate liquidating distributions to which
they would otherwise be entitled.

(c) Residual Distributions. If the respective aggregate liquidating
distributions to which all Holders are entitled have been paid, the holders of
Junior Stock shall be entitled to receive all remaining assets of the Company
according to their respective rights and preferences.

Section 6. Sale Transaction.

(a) Liquidation Event. A Sale Transaction shall be deemed to be a Liquidation
Event for purposes of Section 5.

(b) Notices. In case at any time or from time to time:

(i) the Company shall declare a dividend (or any other distribution) on its
shares of Common Stock; or

(ii) the Company shall enter into a binding, definitive agreement with respect
to a Sale Transaction;

then the Company shall mail to each Holder of shares of Convertible Preferred
Stock at such holder’s address as it appears on the transfer books of the
Company, as promptly as possible but in any event at least 30 days prior to the
applicable date hereinafter specified, a notice stating (A) the date on which a
record is to be taken for the purpose of such dividend, distribution or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record will be entitled to such dividend or distribution or (B) the date on
which such Sale Transaction is expected to become effective.

(c) Notwithstanding anything contained herein to the contrary, (i) each Holder
shall have the right, at such Holder’s option, to convert all or any portion of
such Holder’s Convertible Preferred Stock at any time prior to the consummation
of a Sale Transaction into shares of Common Stock as set forth in Section 7 and
subject to the conversion procedures of Section 8; and (ii) the Company will not
effect any Sale Transaction unless proper provision is made to ensure that the
Holders of shares of Convertible Preferred Stock outstanding immediately prior
to the Sale Transaction shall be entitled to liquidating distributions as
provided in Section 5.

 

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Section 7. Right of the Holders to Convert.

(a) General. Each Holder shall have the right, at such Holder’s option, to
convert all or any portion of such Holder’s Convertible Preferred Stock at any
time into shares of Common Stock at the Conversion Rate per share of Convertible
Preferred Stock (subject to the conversion procedures of Section 8 and the other
provisions hereof), plus cash in lieu of fractional shares.

(b) Exchange Cap. Notwithstanding Section 7(a), no share of Convertible
Preferred Stock shall be convertible into any shares of Common Stock on or prior
to the date of the Stockholders Meeting, and after the date of the Stockholders
Meeting, the Holders may only convert, in the aggregate, up to 1,301,135 shares
of Convertible Preferred Stock (such number of shares, the “Exchange Cap”).
Without limiting the foregoing, no Holder may convert an aggregate number of
shares of Convertible Preferred Stock that would result in the issuance to such
Holder of a number of shares of Common Stock greater than the product of (x) the
Exchange Cap multiplied by (y) a fraction, the numerator of which is the number
of shares of Convertible Preferred Stock purchased by such Holder pursuant to
the Stock Purchase Agreement and the denominator of which is the total number of
shares of Convertible Preferred Stock purchased by all of the Holders pursuant
to the Stock Purchase Agreement (such product being referred to as such Holder’s
“Cap Allocation Amount”). In the event that any Holder shall sell or otherwise
transfer any of such Holder’s shares of Convertible Preferred Stock, the
transferee shall be allocated a pro rata portion of such Holder’s Cap Allocation
Amount.

Section 8. Conversion Procedures.

(a) Conversion Date. Effective immediately prior to the close of business on any
applicable Conversion Date, dividends shall no longer be declared on any such
converted shares of Convertible Preferred Stock, and such shares of Convertible
Preferred Stock shall represent only the right to receive shares of Common Stock
issuable upon conversion of such shares, as set forth in Section 7, in each
case, subject to the right of Holders to receive any declared and unpaid
dividends on such shares and any other payments to which they are otherwise
entitled pursuant to the terms hereof.

(b) Rights Prior to Conversion. No allowance or adjustment, except pursuant to
Section 10, shall be made in respect of dividends payable to holders of the
Common Stock of record as of any date prior to the close of business on any
applicable Conversion Date. Prior to the close of business on any applicable
Conversion Date, shares of Common Stock issuable upon conversion of, or other
securities issuable upon conversion of, any shares of Convertible Preferred
Stock shall not be deemed outstanding for any purpose, and Holders shall have no
rights with respect to the Common Stock or other securities issuable upon
conversion (including voting rights, rights to respond to tender offers for the
Common Stock or other securities issuable upon conversion or rights to receive
any dividends or other distributions on the Common Stock or other securities
issuable upon conversion) by virtue of holding shares of Convertible Preferred
Stock.

(c) Record Holder as of Conversion Date. The Person or Persons entitled to
receive the Common Stock issuable upon conversion of Convertible Preferred Stock
shall be treated for all purposes as the record holder(s) of such shares of
Common Stock as of the close of

 

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business on any applicable Conversion Date. In the event that a Holder shall not
by written notice designate the name in which shares of Common Stock and/or
cash, securities or other property (including payments of cash in lieu of
fractional shares) to be issued or paid upon conversion of shares of Convertible
Preferred Stock should be registered or paid or the manner in which such shares
should be delivered, the Company shall be entitled to register and deliver such
shares, and make such payment, in the name of the Holder and in the manner shown
on the records of the Company.

(d) Conversion Procedure. On the date of any conversion, if a Holder’s interest
is in certificated form, a Holder must do each of the following in order to
convert:

(i) complete and manually sign an irrevocable conversion notice in a form
provided by the Conversion Agent (a “Conversion Notice”), or a facsimile of the
conversion notice, and deliver such Conversion Notice to the Conversion Agent;

(ii) surrender the shares of Convertible Preferred Stock to the Conversion
Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) if required, pay any stock transfer, documentary, stamp or similar taxes
not payable by the Company pursuant to Section 18(a); and

(v) if required, pay funds equal to any declared and unpaid dividend payable on
the next Dividend Payment Date to which such Holder is entitled.

Notwithstanding the foregoing, a Conversion Notice given by any Holder in
contemplation of a Sale Transaction or a public offering of Common Stock may be
revocable and conditional upon the consummation of such Sale Transaction or
public offering, as applicable.

The term “Conversion Date” means the date on which a Holder satisfies all of the
requirements of this Section 8(d). The Conversion Agent shall, on a Holder’s
behalf, convert the Convertible Preferred Stock into shares of Common Stock, in
accordance with the terms of the notice delivered by such Holder described in
clause (i) of this Section 8(d) above.

Section 9. Exchange.

(a) Exchange. Upon the filing of the Restated Charter with the Secretary of
State of Delaware, each share of Convertible Preferred Stock shall be exchanged
(the “Exchange”) automatically into a number of duly authorized, validly issued,
fully paid and non-assessable shares of Series A Preferred equal to the amount
determined by dividing (i) $25.00 plus an amount equal to any accrued but unpaid
dividends up to and including the Exchange Date by (ii) $25.00.

(b) Exchange Procedure. As promptly as practicable after the date on which the
Restated Charter is filed with the Secretary of State of Delaware (the “Exchange
Date”), the Company shall provide notice of the Exchange to each Holder (such
notice, the “Notice of Exchange”). In addition to any information required by
applicable law or regulation, the Notice of Exchange shall state:

(i) the number of shares of Series A Preferred Stock to be issued in exchange
for each share of Convertible Preferred Stock; and

 

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(ii) the method for the Holder to surrender shares of Convertible Preferred
Stock to the Conversion Agent in exchange for shares of Series A Preferred.

Notwithstanding the foregoing, effective on the close of business on the
Exchange Date, the Holders of shares of Convertible Preferred Stock shall cease
to have any rights of holders of such series and shall only be entitled to
receive the shares of Series A Preferred issuable upon exchange of the
Convertible Preferred Stock.

Section 10. Anti-Dilution Adjustments.

(a) General. If the Company at any time after the effective date hereof
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
its outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced and the number of shares of Common Stock obtainable upon
exercise of the Convertible Preferred Stock will be proportionately increased.
If the Company at any time after the effective date hereof combines (by
combination, reverse stock split or otherwise) its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination will be proportionately increased and the
number of shares of Common Stock obtainable upon exercise of the Convertible
Preferred Stock will be proportionately decreased. Any subdivision or
combination of shares of Common Stock, and adjustment of the Conversion Price
resulting therefrom pursuant to this Section 10, shall be subject to the prior
approval of the Executive Committee in accordance with Article FIFTH of the
Certificate of Incorporation.

(b) Distribution of Assets. If the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including any
distribution of cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement or other similar
transaction) (a “Distribution”), at any time after the issuance of the
Convertible Preferred Stock and prior to a Dividend Conversion Date, then, in
each such case, the Conversion Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying such
Conversion Price by a fraction of which (A) the numerator shall be the VWAP of
the Common Stock on the trading day immediately preceding such record date minus
the value of the Distribution (as determined in good faith by the Board of
Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the VWAP of the Common Stock on the trading day immediately preceding
such record date.

(c) Purchase Rights. If at any time the Company grants, issues or sells any
options to purchase shares of Common Stock, convertible securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of its capital stock (the

 

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“Purchase Rights”) prior to a Dividend Conversion Date, then each Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights that such Holder could have acquired if such Holder
had held the number of shares of Common Stock acquirable upon complete
conversion of such Holder’s shares of Convertible Preferred Stock immediately
before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights.

(d) No Fractional Shares. No fractional shares of Common Stock will be issued to
holders of the Convertible Preferred Stock upon conversion. In lieu of
fractional shares otherwise issuable, holders will be entitled to receive an
amount in cash equal to the fraction of a share of Common Stock, calculated on
an aggregate basis in respect of the shares of Convertible Preferred Stock being
converted, multiplied by the Closing Price of the Common Stock on the Trading
Day immediately preceding the applicable Conversion Date.

Section 11. Voting Rights.

(a) General. The Holders shall not be entitled to vote on any matter except as
set forth in this Section 11 or as required by Delaware law.

(b) Special Voting Rights. The Holders shall have the voting rights set forth in
ARTICLE FOURTH, Section B.2(b) of the Certificate of Incorporation.

Section 12. Preemptive Rights.

For so long as at least 800,000 shares of Convertible Preferred Stock are issued
and outstanding (subject to anti-dilution adjustment for stock splits, stock
dividends and the like):

(a) Each Holder shall have the right to purchase, pro rata, a portion of any New
Securities (as hereinafter defined) that the Company may, from time to time
hereafter, propose to sell and issue. Each such Holder’s pro rata share of New
Securities, for the purposes of this right, is the ratio of the sum of (x) the
number of shares of Common Stock into which the shares of Convertible Preferred
Stock have been converted and which are held of record by such Holder at the
time the New Securities are offered and (y) the number of shares of Common Stock
into which the shares of Convertible Preferred Stock held by such Holder at the
time the New Securities are offered are then convertible (the “Conversion
Shares”) to the total number of then outstanding shares of Common Stock,
including such Conversion Shares and the Conversion Shares then issuable upon
all other then outstanding shares of Convertible Preferred Stock. “New
Securities” shall mean any shares of capital stock or securities or rights
convertible, exercisable or exchangeable for capital stock of the Company
(“Convertible Securities”); provided, however, that New Securities does not
include:

(i) capital stock issued or issuable on conversion or exercise of the
Convertible Preferred Stock, options or warrants to purchase Common Stock or
other convertible securities that either are (x) outstanding on the date of
effectiveness of this Certificate of Designation, (y) warrants to purchase
Common Stock issued on or within ninety (90) days after the date of
effectiveness of this Certificate of Designation in connection with the offering
of up to $60,000,000 of subordinated indebtedness by the

 

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Company’s wholly-owned subsidiary, Cole Taylor Bank; or (z) issued after the
date of the effectiveness of the Certificate of Designation provided that, in
the case of this clause (z) only, the rights established by this Section 12
applied with respect to the initial issuance by the Company of such options,
warrants or convertible securities;

(ii) capital stock or Convertible Securities issued by the Company pursuant to
any public offering;

(iii) Common Stock issued in connection with any stock split, payment of a
dividend or other distribution in respect of its capital stock or
recapitalization of the Company;

(iv) capital stock or Convertible Securities issued to a third party in
connection with any acquisition of the stock or assets of another Person by the
Company or any of its subsidiaries by merger, purchase, joint venture or other
reorganization or business combination;

(v) shares of Common Stock, options to purchase Common Stock or other rights
with respect thereto issued to employees, officers, directors or consultants of
the Company or any of its subsidiaries;

(vi) capital stock or Convertible Securities issued to a third party in
consideration of services provided by such third party;

(vii) capital stock issued to a third party in connection with a debt financing
consummated by the Company or any of its subsidiaries; and

(vii) trust preferred securities.

(b) If the Company proposes to undertake an issuance of New Securities, it shall
give each Holder written notice of its intention, describing the type of New
Securities, the price and the general terms and conditions upon which the
Company proposes to issue the same. Each such Holder shall have 25 calendar days
from the giving of such notice to agree to purchase its pro rata share of New
Securities for the price and upon the terms and conditions specified in the
notice by giving written notice to the Company and stating therein the quantity
of New Securities to be purchased.

(c) If any of the Holders fail to exercise its right under this Section 12 to
purchase its pro-rata share of the New Securities within 25 calendar days
following the date of the first notice contemplated by Section 12(b), the
Company shall have until the 90th day following such date to enter into a letter
of intent or definitive agreement and a period of 90 days thereafter to sell any
of the New Securities in respect of which such Investor’s rights were not
exercised, at a price and upon terms and conditions no more favorable to the
purchasers thereof than specified in the Company’s notice to the Holders
pursuant to Section 12(b). If the Company has not entered into such a letter of
intent or agreement or sold such New Securities within such period, the Company
shall not thereafter issue or sell any such New Securities without again first
offering such securities to the Holders in the manner provided in this
Section 12.

 

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Section 13. Unissued or Reacquired Shares.

Shares of Convertible Preferred Stock that have been issued and converted,
redeemed or otherwise purchased or acquired by the Company shall be retired upon
their acquisition, shall not be reissued as shares of Convertible Preferred
Stock and, upon the taking of any action required by law, shall be restored to
the status of authorized but unissued shares of preferred stock without
designation as to series.

Section 14. No Sinking Fund.

Shares of Convertible Preferred Stock are not subject to the operation of a
sinking fund.

Section 15. Reservation of Common Stock.

(a) Sufficient Shares. The Company shall at all times reserve and keep available
out of its authorized and unissued Common Stock or shares acquired by the
Company, solely for issuance upon the conversion of shares of Convertible
Preferred Stock as provided in this Certificate of Designation, free from any
preemptive or other similar rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all the shares of
Convertible Preferred Stock then outstanding). For purposes of this
Section 15(a), the number of shares of Common Stock that shall be deliverable
upon the conversion of all outstanding shares of Convertible Preferred Stock
shall be computed as if at the time of computation all such outstanding shares
were held by a single Holder.

(b) Use of Acquired Shares. Notwithstanding the foregoing, the Company shall be
entitled to deliver upon conversion of shares of Convertible Preferred Stock, as
herein provided, shares of Common Stock acquired by the Company and held as
treasury shares (in lieu of the issuance of authorized and unissued shares of
Common Stock), so long as any such acquired shares are free and clear of all
liens, charges, security interests or encumbrances (other than liens, charges,
security interests and other encumbrances created by the Holders).

(c) Free and Clear Delivery. All shares of Common Stock delivered upon
conversion of the Convertible Preferred Stock shall, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable, free and clear of all
liens, claims, security interests and other encumbrances (other than liens,
charges, security interests and other encumbrances created by the Holders).

(d) Compliance with Law. Prior to the delivery of any securities that the
Company shall be obligated to deliver upon conversion of the Convertible
Preferred Stock, the Company shall use its reasonable best efforts to comply
with any federal and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or consent to the
delivery thereof by, any governmental authority.

(e) Listing. The Company hereby covenants and agrees that, if at any time the
Common Stock shall be traded on the Nasdaq Global Select Market or any other
national securities exchange, the Company will, if permitted by the rules of
such exchange, list and keep listed, so long as the Common Stock shall be so
listed on such exchange, all the Common Stock issuable upon conversion of the
Convertible Preferred Stock; provided, however, that if the rules

 

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of such exchange require the Company to defer the listing of such Common Stock
until the first conversion of Convertible Preferred Stock into Common Stock in
accordance with the provisions hereof, the Company covenants to list such Common
Stock issuable upon conversion of the Convertible Preferred Stock in accordance
with the requirements of such exchange at such time.

Section 16. Transfer Agent, Conversion Agent, Registrar and Paying Agent.

The duly appointed Transfer Agent, Conversion Agent, Registrar and paying agent
for the Convertible Preferred Stock shall be                     . The Company
may, in its sole discretion, remove the Transfer Agent in accordance with the
agreement between the Company and the Transfer Agent; provided that the Company
shall appoint a successor transfer agent that shall accept such appointment
prior to the effectiveness of such removal. Upon any such removal or
appointment, the Company shall send notice thereof by first-class mail, postage
prepaid, to the Holders.

Section 17. Replacement Certificates.

(a) Mutilated, Destroyed, Stolen and Lost Certificates. If physical certificates
are issued, the Company shall replace any mutilated certificate at the Holder’s
expense upon surrender of that certificate to the Transfer Agent. The Company
shall replace any certificate that becomes destroyed, stolen or lost at the
Holder’s expense upon delivery to the Company and the Transfer Agent of
satisfactory evidence that the certificate has been destroyed, stolen or lost,
together with any indemnity and bond that may be required by the Transfer Agent
and the Company.

(b) Certificates Following Conversion. If physical certificates are issued, the
Company shall not be required to issue any certificates representing the
Convertible Preferred Stock on or after the applicable Conversion Date. In place
of the delivery of a replacement certificate following the applicable Conversion
Date, the Transfer Agent, upon delivery of the evidence and indemnity described
in clause (a) above, shall deliver the shares of Common Stock pursuant to the
terms of the Convertible Preferred Stock formerly evidenced by the certificate.

Section 18. Taxes.

(a) Transfer Taxes. The Company shall pay any and all stock transfer,
documentary, stamp and similar taxes that may be payable in respect of any
issuance or delivery of shares of Convertible Preferred Stock or shares of
Common Stock or other securities issued on account of Convertible Preferred
Stock pursuant hereto or certificates representing such shares or securities;
provided, however, that the Company shall not be required to pay any such tax
that may be payable in respect of any transfer involved in the issuance or
delivery of shares of Convertible Preferred Stock, shares of Common Stock or
other securities in a name other than that in which the shares of Convertible
Preferred Stock with respect to which such shares or other securities are issued
or delivered were registered, or in respect of any payment to any Person other
than a payment to the registered holder thereof, and shall not be required to
make any such issuance, delivery or payment unless and until the Person
otherwise entitled to such issuance, delivery or payment has paid to the Company
the amount of any such tax or has established, to the satisfaction of the
Company, that such tax has been paid or is not payable.

 

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(b) Withholding. All payments and distributions (or deemed distributions) on the
shares of Convertible Preferred Stock (and on the shares of Common Stock
received upon their conversion) shall be subject to withholding and backup
withholding of tax to the extent required by law, subject to applicable
exemptions, and amounts withheld, if any, shall be treated as received by the
Holders.

Section 19. Notices.

All notices referred to herein shall be in writing, and, unless otherwise
specified herein, all notices hereunder shall be deemed to have been given
(i) upon receipt, when delivered personally; (ii) one Business Day after deposit
with an overnight courier service; or (iii) three Business Days after the
mailing thereof if sent by registered or certified mail (unless first class mail
shall be specifically permitted for such notice under the terms of this
Certificate of Designation) with postage prepaid, in each case addressed: (x) if
to the Company, to its office at 9550 West Higgins Road, Rosemont, IL 60018
(Attention: Corporate Secretary) or to the Transfer Agent at its office at
                                         (Attention: Corporate Trust Office), or
other agent of the Company designated as permitted by this Certificate of
Designation, or (y) if to any Holder, to such Holder at the address of such
Holder as listed in the stock record books of the Company (which may include the
records of the Transfer Agent) or (z) to such other address as the Company or
any such Holder, as the case may be, shall have designated by notice similarly
given.

IN WITNESS WHEREOF, this Certificate of Designation has been executed on behalf
of the Company by its                                          this     th day
of September, 2008.

 

TAYLOR CAPITAL GROUP, INC. By:  

 

Name:  

 

Title:  

 

 

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EXHIBIT F

FORM OF REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

TAYLOR CAPITAL GROUP, INC.,

THE PERSONS LISTED ON EXHIBIT A

THE PERSONS LISTED ON EXHIBIT B

AND

FINANCIAL INVESTMENTS CORPORATION

 

 

DATED AS OF SEPTEMBER     , 2008

 

 

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TABLE OF CONTENTS

 

              Page

1.

  Registration Rights    2  

1.1

   Definitions    2  

1.2

   Request for Registration    5  

1.3

   Company Registration    7  

1.4

   Form S-3 Registration    8  

1.5

   Request for Registration of Registrable Preferred Securities    8  

1.6

   Obligations of the Company    9  

1.7

   Furnish Information; Limitation of Obligations    13  

1.8

   Expenses of Registrations    13  

1.9

   Indemnification    14  

1.10

   Rule 144 Reporting    17  

1.11

   Assignment of Registration Rights    18  

1.12

   Additional Restrictions    18  

1.13

   Confidential Information    19  

1.14

   Termination of Registration Rights    19

2.

  Appointment of Taylor Representative    19  

2.1

   Appointment    19  

2.2

   Power-of Attorney    20  

2.3

   Successor Representative    20  

2.4

   Authorized Actions    21

3.

  Miscellaneous    21  

3.1

   Successors and Assigns    21  

3.2

   Governing Law    21  

3.3

   Counterparts    21  

3.4

   Notices    22  

3.5

   Attorneys’ Fees    22  

3.6

   Amendments and Waivers    22  

3.7

   Other Agreements    22  

3.8

   Specific Performance    23  

3.9

   Severability    23  

3.10

   Rules of Construction    23  

3.11

   Independent Nature    24  

3.12

   Entire Agreement    24

 

i

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Exhibits

Exhibit A - Series A Holders

Exhibit B - Taylor Holders

Exhibit C - Series A Holders of Subdebt Transaction Warrants

 

ii

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of September __, 2008 (the “Effective Date”), by and between Taylor Capital
Group, Inc., a Delaware corporation (the “Company”), each of the Persons set
forth on Exhibit A of this Agreement (such persons or any assignee thereof in
accordance with Section 1.11 hereof being referred to as the “Series A Holders”)
each of the Persons set forth on Exhibit B of this Agreement (such persons or
any assignee thereof in accordance with Section 1.11 hereof being referred to as
the “Taylor Holders”), and Financial Investments Corporation, an Illinois
corporation (such person or any assignee thereof in accordance with Section 1.11
hereof being referred to as “FIC”). Unless otherwise provided herein, all
capitalized terms used herein shall have the meanings ascribed thereto in
Section 1.1.

RECITALS

WHEREAS, the Taylor Holders and the Company entered into that certain
Registration Rights Agreement (the “2005 Taylor Registration Rights Agreement”),
dated as of August 3, 2005, whereby the Taylor Holders was granted certain
registration rights with respect to certain shares of the common stock, par
value $.01 per share, of the Company (the “Common Stock”);

WHEREAS, pursuant to that certain Securities Purchase Agreement dated as of
September 4, 2008, by and among the Company and the Series A Holders (the
“Purchase Agreement”), the Series A Holders [purchased an aggregate of 2,400,000
shares of the Non-Cumulative Convertible Perpetual Preferred Stock, Series A, of
the Company (the “Series A Preferred”)] [purchased an aggregate of 2,400,000
shares of Designated Preferred (as defined in Section 4(c) the Purchase
Agreement) (the “Designated Preferred”), which are mandatorily exchangeable for
2,400,000 shares of the Non-Cumulative Convertible Perpetual Preferred Stock,
Series A, of the Company (the “Series A Preferred”) in accordance with the terms
and conditions set forth in the Purchase Agreement];

[WHEREAS, pursuant to the terms of the Certificate of Designation of the
Designated Preferred, each share of Designated Preferred may be converted into
shares of Common Stock upon the terms and conditions set forth therein;]

WHEREAS, pursuant to the terms of the Certificate of Designation of the Series A
Preferred (the “Certificate of Designation”), each share of Series A Preferred
may be converted into shares of Common Stock upon the terms and conditions set
forth therein;

WHEREAS, pursuant to the Purchase Agreement, the Company granted FIC a warrant
to purchase up to 500,000 shares (subject to adjustment as provided therein) of
Common Stock upon the terms and conditions set forth therein (the “FIC
Warrant”);

WHEREAS, pursuant those certain Subscription Agreements by and among the
Company, Cole Taylor Bank, a wholly-owned subsidiary of the Company, and each of
the Series A Holders listed on Exhibit C hereto, the Company will issue to such
Series A Holders on the

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date hereof warrants to acquire the number of shares of Common Stock set forth
such Series A Holder’s name on Exhibit C hereto (collectively, the “Subdebt
Transaction Warrants”) in connection with the private placement of up to $60
million of subordinated bank notes issued by Cole Taylor Bank and warrants
issued by the Company to acquire Common Stock on the terms and conditions
described therein; and

WHEREAS, in order to induce the Series A Holders and FIC to consummate the
transactions contemplated by the Purchase Agreement, the Company agreed to grant
the Holders (as defined below) the registration rights as set forth herein and
the Company and the Taylor Holders agreed to enter into this Agreement to
supersede and replace the 2005 Taylor Registration Rights Agreement in its
entirety.

NOW, THEREFORE, in consideration of the foregoing, the mutual promises set forth
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:

 

1. Registration Rights.

 

  1.1 Definitions.

For purposes of this Agreement:

(a) “Affiliate” has the meaning set forth in Rule 12b-2 under the Exchange Act
as in effect as on the date hereof.

(b) “Business Day” means any day other than a Saturday or Sunday, a legal
holiday or any other day on which the SEC is closed.

(c) “Conversion Shares” means shares of Common Stock issued or issuable upon
conversion of the Convertible Preferred or the Designated Preferred or upon
exercise of the FIC Warrant or upon exercise of the Subdebt Transaction
Warrants.

(d) “Designated Preferred” has the meaning assigned to such term in Section 4(c)
of the Purchase Agreement.

(e) “Effective Date” has the meaning assigned to such term in the preamble of
this Agreement.

(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(g) “Form S-3” means such form of registration statement under the Securities
Act as in effect on the date hereof or any successor form under the Securities
Act subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.

 

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(h) “Free Writing Prospectus” means any “free writing prospectus,” as defined in
Rule 405 of the Securities Act.

(i) “Holder” means any Series A Holder or Taylor Holder or FIC or any assignee
thereof in accordance with Section 1.11 hereof.

(j) “Immediate Family Member” means with respect to any person, any child,
stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such person,
and any person (other than a tenant or employee) sharing the household of such
person.

(k) “Law” means any statute, law, ordinance, rule or regulation of any
governmental entity.

(l) “Preferred Stock” means the Series A Preferred or, in the event that the
Series A Holders purchase shares of Designated Preferred under the Purchase
Agreement, the Designated Preferred.

(m) “Public Sale” means any sale of Registrable Securities to the public
pursuant to a public offering registered under the Securities Act or to the
public through a broker or market-maker pursuant to the provisions of Rule 144
under the Securities Act.

(n) “Register,” “registered” and “registration” refer to a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.

(o) “Registrable Common Securities” means at any time (i) the shares of Common
Stock then beneficially owned (within the meaning of Section 13(d)(3) of the
Exchange Act) by each Holder set forth on Exhibit A or Exhibit B who is an
executive officer or director of the Company, or the beneficial owner (within
the meaning of Section 13(d)(3) of the Exchange) of capital stock representing
10% or more of the total combined voting power of all outstanding shares of all
classes of capital stock which are then entitled to vote in matters (excluding
the election of directors) presented to a vote of the Company’s stockholders
generally, or by any Affiliate or Immediate Family Member of each such Holder;
(ii) the then outstanding Conversion Shares and the Conversion Shares then
issuable upon exercise of the FIC Warrant by the Holder thereof or upon exercise
of the Subdebt Transaction Warrants by the Holders thereof or upon conversion of
the then outstanding Series A Preferred or Designated Preferred by any of the
Holders, or any assignee thereof in accordance with Section 1.11 hereof, and
(iii) any Company capital stock issued as (or issuable upon the conversion or
exercise of any warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of
the shares referenced in (i) or (ii) above; provided, that Registrable
Securities shall not include shares of Common Stock previously (A) sold in a

 

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Public Sale, or (B) sold in a transaction in which the transferor’s rights
hereunder are not assigned in accordance with Section 1.11. The number of shares
of “Registrable Common Securities then outstanding” shall be the sum of the
number of shares of Common Stock outstanding which are, and the number of
Conversion Shares issuable pursuant to then exercisable or convertible
securities which are, Registrable Common Securities.

(p) “Series A Registrable Common Securities” means at any time (i) the Common
Stock then beneficially owned (within the meaning of Section 13(d)(3) of the
Exchange Act by each Holder set forth on Exhibit A who is an executive officer
or director of the Company, or the beneficial owner (within the meaning of
Section 13(d)(3) of the Exchange Act) of capital stock representing 10% or more
of the total combined voting power of all outstanding shares of all classes of
capital stock which are then entitled to vote in matters (excluding the election
of directors) presented to a vote of the Company’s stockholders generally, or by
any Affiliate or Immediate Family Member of each such Holder; (ii) the then
outstanding Conversion Shares and the Conversion Shares then issuable upon
exercise of the FIC Warrant by the holder thereof or upon conversion of the then
outstanding Series A Preferred or Designated Preferred by any of the Series A
Holders, or any assignee thereof in accordance with Section 1.11 hereof, and
(iii) any Company capital stock issued as (or issuable upon the conversion or
exercise of any warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of
the shares referenced in (i) or (ii) above; provided, that Registrable
Securities shall not include shares of Common Stock previously (A) sold in a
Public Sale, or (B) sold in a transaction in which the transferor’s rights
hereunder are not assigned in accordance with Section 1.11. The number of shares
of “Series A Registrable Common Securities then outstanding” shall be the sum of
the number of shares of Common Stock outstanding which are, and the number of
Conversion Shares issuable pursuant to then exercisable or convertible
securities which are, Series A Registrable Common Securities.

(q) “Registrable Preferred Securities” means the shares of Designated Preferred,
if any, issued to the Series A Holders on the date hereof; provided, that
Registrable Preferred Securities shall not include shares of Designated
Preferred previously (A) sold in a Public Sale, or (B) sold in a transaction in
which the transferor’s rights hereunder are not assigned in accordance with
Section 1.12 hereof.

(r) “Registrable Securities” means the Registrable Common Securities and the
Registrable Preferred Securities.

(s) “Restated Charter” shall have the meaning assigned to such term in the
Purchase Agreement.

(t) “Rule 144” means Rule 144 under the Securities Act (or any successor
thereto).

 

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(u) “SEC” means the Securities and Exchange Commission.

(v) “Securities Act” means the Securities Act of 1933, as amended.

(w) “Series A Holders” has the meaning assigned to such term in the preamble of
this Agreement.

(x) “Subdebt Transaction Warrants” has the meaning assigned to such term in the
recitals to this Agreement.

(y) “Taylor Holders” has the meaning assigned to such term in the preamble of
this Agreement.

(z) “Taylor Representative” has the meaning ascribed to such term in
Section 3.1.

 

  1.2 Request for Registration.

(a) Subject to the limitations and restrictions set forth in this Agreement, at
any time after the one year anniversary of the Effective Date, the Taylor
Representative, on behalf of the Taylor Holders, and Series A Holders of not
less than one-third ( 1/3) of the Series A Registrable Common Securities then
outstanding will each be entitled to request of the Company in writing (such
requesting Holders shall be hereinafter referred to as the “Initiating Holders”
and such written notice shall be hereinafter referred to as the “Demand Notice”)
one registration under the Securities Act in each calendar year of all or part
of the Registrable Common Securities owned by such Holders (each, a “Demand
Registration”). For the avoidance of doubt, the parties acknowledge and agree
that, following the submission of the first Demand Notice in any calendar year
by Series A Holders of not less than one-third ( 1/3) of the Series A
Registrable Common Securities then outstanding, no other Series A Holders will
be entitled or permitted to submit a Demand Notice during such calendar year.
Each Demand Notice shall set forth (i) the identity of each of the Holders that
intend to participate in the Demand Registration, (ii) the number of Registrable
Common Securities such Holders intend to register in such registration, and
(iii) the proposed investment banker(s) or underwriter(s), if any.

(b) Upon receipt of a Demand Notice, the Company shall:

(i) within ten (10) Business Days of the receipt thereof, give written notice of
such request and a copy of the Demand Notice to the Holders not filing such
written request for Demand Registration (which, in the case of the Taylor
Holders, shall be sent to the Taylor Representative); and

(ii) use commercially reasonable efforts to effect the registration under the
Securities Act in accordance herewith of all Registrable Common Securities which
the Demand Notice identifies to be registered and all

 

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other Registrable Common Securities that any Holder, other than the Initiating
Holders, requests in writing to be included in such registration within 10
Business Days after the delivery of the notice pursuant to Section 1.2(b)(i),
subject to the limitations of Section 1.2(d)-(e).

(c) If the Initiating Holders intend to distribute the Registrable Common
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of the Demand Notice made pursuant to
Section 1.2(a) and the Company shall include such information in the written
notice referred to in Section 1.2(b)(i). The selection of the underwriter or
underwriters shall be subject to the Company’s approval which will not be
unreasonably withheld. In such event, the right of any Holder to include
Registrable Common Securities in such registration shall be conditioned upon
such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Common Securities in the underwriting (unless otherwise
agreed by the Initiating Holders) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 1.6(i)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the managing underwriter advises the Company and the Initiating
Holders in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Company shall so advise all Holders of
Registrable Common Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Common Securities that may be
included in the underwriting shall be allocated first among all Holders
participating in the underwriting in proportion (as nearly as practicable) to
the number of shares requested to be underwritten by such Holders; provided,
however, that the number of shares of Registrable Common Securities held by
Holders to be included in such underwriting shall not be reduced unless all
other securities are first entirely excluded from the underwriting. Registrable
Common Securities excluded or withdrawn from such underwriting shall be
withdrawn from the registration.

(d) Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 1.2, a certificate
signed by the Company’s chief executive officer or the chairman of the board of
directors of the Company (the “Board”) stating that in the good faith judgment
of the Board, after consultation with its financial advisors and legal counsel
and as evidenced by a resolution by the Board, it would be seriously detrimental
to the Company and its stockholders for such registration statement to be filed
and it is therefore essential to defer the filing of such registration
statement, the Company shall have the right to defer taking action with respect
to such filing (but not the preparation of such registration statement) for a
period of not more than sixty (60) days after receipt of the request of the
Initiating Holders; provided, that the Company may not utilize this right more
than once in any twelve-month period.

 

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(e) In addition, after delivery of any Demand Notice, the Company shall not be
obligated to effect, or to take any action to effect, any registration pursuant
to this Section 1.2 other than as requested in such Demand Notice (i.e., the
Company shall not effect a registration requested by, and no Person shall be
entitled to deliver, any other Demand Notice) during the period commencing on
the date of delivery of such Demand Notice and ending on (and including) the
last day of the Required Effectiveness Period of the registration requested by
such Demand Notice; provided, however, that the Series A Holders shall be
entitled to request, and upon such request the Company shall be obligated to
effect, one registration in accordance with this Section 1, with respect to a
firm commitment underwritten public offering, during the 365-day period
following a Mandatory Conversion Date, regardless of whether the Series A
Holders would otherwise be entitled or permitted to request such registration
hereunder.

 

  1.3 Company Registration.

(a) If (without any obligation to do so) the Company proposes to register any of
its capital stock under the Securities Act for its own account or the account of
any of its stockholders with registration rights (other than in connection with
a registration effected solely with respect to one or more employee benefit
plans or arrangements or a business combination transaction or any other similar
transaction for which a registration statement on Form S-4 under the Securities
Act or any comparable successor form is applicable), the Company will promptly
give written notice thereof to FIC, the Series A Holders and the Taylor
Representative of its intention to effect such a registration and will include
in such registration all Registrable Common Securities (in accordance with the
priorities set forth in Sections 1.3(b) below) with respect to which the Company
has received a written request from FIC, any of the Series A Holders and/or the
Taylor Representative on behalf of the Taylor Holders (the “Piggyback Notice”)
for inclusion within 10 Business Days after the delivery of the Company’s
notice. Each Piggyback Notice shall set forth (i) the identity of each of the
Holders that intend to participate in the registration, and (ii) the number of
Registrable Common Securities such Holders intend to register in such
registration.

(b) In connection with any offering involving an underwriting of shares of the
Company’s capital stock, the Company shall not be required under this
Section 1.3 to include any of the Holders’ securities in such underwriting
unless they accept the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Company. Regardless of any other provision of
this Section 1.3, if the underwriter advises the Company that marketing factors
require a reduction in the number of shares to be underwritten, then the number
of shares of Registrable Common Securities that may be included in the
underwriting shall be allocated first, to the Company and the Person or Persons
requesting such registration (if other than the Company) shall be entitled to
participate in accordance with the relative priorities, if any, as shall exist
among them; and then

 

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second, all other holders of securities having the right to include such
securities in such registration (including the Holders of the Registrable Common
Securities) who shall be entitled to participate pro rata based on the number of
shares requested to be sold by such Holders. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 1.3
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The registration expenses of
such withdrawn registration shall be borne by the Company in accordance with
Section 1.8 hereof.

 

  1.4 Form S-3 Registration.

If at any time the Company is a registrant entitled to use Form S-3 to register
any Registrable Common Securities pursuant to Section 1.2, then the Company
shall use commercially reasonable efforts to cause such securities to be
registered on Form S-3.

 

  1.5 Request for Registration of Registrable Preferred Securities.

(a) Subject to the limitations and restrictions set forth in this Section 1.5,
in the event that the Restated Charter shall not be filed with the Secretary of
State of Delaware prior to January 1, 2009, Series A Holders of at least a
majority of the Registrable Preferred Securities then outstanding shall have the
right at anytime thereafter until such time as such filing has been made to send
written notice to the Company requesting that the Company register for resale
all of the Registrable Preferred Securities under the Securities Act and use its
reasonable best efforts to cause the listing of the Registrable Preferred
Securities on a national securities exchange (or if the Registrable Preferred
Securities are not eligible for listing on a national securities exchange, to
cause the quotation thereof on an over-the-counter securities market designated
by Series A Holders of at least a majority of the Registrable Preferred
Securities then outstanding) (a “Preferred Registration”).

(b) Upon receipt of a written request for a Preferred Registration under
Section 1.5(a), the Company shall use reasonable best efforts to effect the
registration under the Securities Act of all of the Registrable Preferred
Securities promptly after the Company’s receipt of the written request, and
(ii) cause the listing of the Registrable Preferred Securities on a national
securities exchange (or quotation on the over-the-counter securities market
designated by the Series A Holders requesting the registration pursuant to this
Section 1.5). Following the registration of the Registrable Preferred Securities
pursuant to this Section 1.5, the Company shall use its reasonable best efforts
to create and sustain a market for the sale of Registrable Preferred Securities.
The Company shall use its reasonable best efforts to cause the registration
statement filed pursuant to this Section 1.5 to be continuously effective,
supplemented and amended as necessary to ensure that it is available for resales
by the Holders of the Registrable Preferred Securities and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
related rules and regulations of the SEC announced from time-to-time, until such
time as the Restated Charter has been filed and the Series A Preferred has been
issued in exchange for the Designated Preferred, whereupon all obligations of
the Company under this Section 1.5 shall terminate.

 

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  1.6 Obligations of the Company.

Whenever the Company is required by the provisions of this Agreement to effect
the registration of any Registrable Securities under the Securities Act, the
Company shall, as expeditiously as reasonably possible:

(a) Prepare and file (within 45 days after the end of the period within which
requests for registrations may be given to the Company) with the SEC a
registration statement with respect to such Registrable Securities and use
commercially reasonable efforts to cause such registration statement to become
effective and keep such registration statement effective for period commencing
on the effective date thereof and ending on and including the date that is 120
days thereafter (or, in the case of a registration statement filed pursuant to
Section 1.2, that is effective on a Mandatory Conversion Event (as defined in
the Restated Charter), or, if there is no such registration statement, the first
registration statement filed pursuant to Section 1.2 that is declared effective
after a Mandatory Conversion Event, ending on and including the date that is 365
days after the later of the Mandatory Conversion Event and the effective date of
such registration statement) (such period, the “Required Effectiveness Period”)
or, if earlier, until the distribution contemplated in the registration
statement has been completed.

(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement in accordance with the intended method or methods of
disposition by the sellers thereof specified by the Initiating Holders and set
forth in such Registration Statement; provided that before filing a registration
statement, prospectus, or any amendments or supplements thereto, the Company
will furnish to any one counsel jointly selected by (i) the Series A Holders of
not less than one-third of the Series A Registrable Common Securities then
outstanding if Series A Registrable Common Securities are covered by such
registration statement, (ii) the Taylor Representative if Taylor Holders are
Holders of Registrable Securities covered by such registration statement, and
(iii) FIC if Conversion Shares issued or issuable upon exercise of the FIC
Warrant are covered by such registration statement, to represent all such
Holders in connection therewith (“Designated Legal Counsel”), copies of all
documents proposed to be filed, which documents (other than the documents
incorporated by reference therein) will be subject to the review of such
counsel.

(c) Furnish to the Holders such numbers of copies of such registration
statement, the prospectus included in such registration statement (including
each preliminary prospectus and summary prospectus) and any related Free Writing
Prospectus prepared by or on behalf of the Company, and of each amendment and

 

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supplement thereto (in each case including all exhibits filed therewith, any
documents incorporated by reference), in conformity with the requirements of the
Securities Act, as they may reasonably request in order to facilitate the public
sale or other disposition of Registrable Securities owned by such Holder.

(d) Register and qualify the securities covered by such registration statement
under such other securities or blue sky laws of such U.S. states as shall be
reasonably requested by the Holders of the Registrable Securities (or, in the
case of the Taylor Holders, the Taylor Representative) covered by such
registration statement and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holders to consummate the
disposition in such states of the Registrable Securities owned by such Holder;
provided, that the Company shall not be required in connection therewith or as a
condition thereto (i) to qualify to do business or to file a general consent to
service of process in any such states, (ii) subject itself to taxation in any
such state or (iii) in the case of a registration pursuant to Section 1.3,
register or qualify such Holder’s Registrable Securities in any state where
shares to be sold by the Company or any other Person initiating such
registration are not to be registered or qualified.

(e) Notify each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the Company’s becoming aware that the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and at the request
of any such Holder, prepare, file with the SEC and furnish to such Holder a copy
of an amended or supplemental prospectus (or a document incorporated by
reference therein) as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such amended or supplemental
prospectus shall not include 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 in the light of the circumstances then
existing.

(f) Cause all such Registrable Securities registered pursuant to this Agreement
to be listed on any national securities exchange on which any shares of the
Common Stock are then listed.

(g) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.

(h) In the case of underwritten offering, enter into and perform its obligations
under such customary agreements (including an underwriting agreement in
customary form), which may include indemnification provisions in favor of
underwriters and other persons in addition to, or in substitution for the
provisions of Section 1.9 hereof, and take such other actions, as the
underwriters reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities.

 

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(i) Make available for inspection by any underwriter participating in any
disposition to be effected pursuant to such registration statement (including
any seller of Registrable Securities required to be named as an underwriter in
such registration statement), and by any attorney, accountant or other agent
retained by any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company’s officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement.

(j) Obtain for delivery to any underwriter participation in any disposition to
be effected pursuant to such registration statement (including any seller of
Registrable Securities required to be named as an underwriter in such
registration statement), an opinion or opinions from counsel for the Company in
customary form and in form, substance and scope reasonably satisfactory to such
underwriter and its counsel.

(k) Use commercially reasonable efforts to prevent the issuance of any stop
order suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus relating to such
registration statement, and, if any such order is issued, to obtain the
withdrawal of any such order as soon as reasonably possible.

(l) Respond promptly to any comments received from the SEC and request
acceleration of effectiveness promptly after it learns that the SEC will not
review the registration statement or after it has confirmed that it has resolved
all comments received from the SEC and that the SEC has no further comments on
the registration statement.

(m) Promptly notify the Holders of Registrable Securities to be sold (or, in the
case of the Taylor Holders, the Taylor Representative) and confirm such notice
in writing, (i) when a prospectus or any prospectus supplement or post-effective
amendment has been filed, and, with respect to a registration statement or any
post-effective amendment, when the same has become effective, (ii) of the
receipt of any comments from the SEC, (iii) of any request by the SEC or any
other federal or state governmental authority for amendments or supplements to a
registration statement or related prospectus, (iv) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a registration statement, or of any order preventing or
suspending the use of any preliminary prospectus relating to such registration
statement, or the initiation of any proceedings for such purpose(s), (v) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose,

 

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(vi) of the discovery of any event that makes any statement made in such
registration statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in a registration statement, prospectus
or any such document so that, in the case of the registration statement, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, in the case of the prospectus, it will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and (vii) of the
Company’s reasonable determination that a post-effective amendment to a
registration statement would be appropriate. In the event a registration is
interfered with by any event of the kind described in clauses (iv) through
(vii) of the first sentence of this Section 1.6(m) for more than twenty
(20) days, such registration shall not be deemed effected” for purposes of
Section 1.2(e) hereof.

(n) If requested by the managing underwriter or agent or any Holders of the
Registrable Securities (or, in the case of the Taylor Holders, the Taylor
Representative) covered by the applicable registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or agent or such Holder or such
Representative reasonably requests to be included therein, including with
respect to the number of Registrable Securities being sold by such Holders to
such underwriter or agent, the purchase price being paid therefor by such
underwriter or agent and with respect to any other terms of the underwritten
offering of the Registrable Securities to be sold in such offering; and make all
required filings of such prospectus supplement or post-effective amendment as
soon as reasonably practicable after being notified of the matters incorporated
in such prospectus supplement or post-effective amendment.

(o) Cooperate with the Holders of Registrable Securities covered by the
registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or agent (if any) or the Holders (or
in the case of the Taylor Holders, the Taylor Representative) may request.

(p) Cooperate with each seller of Registrable Securities and each underwriter or
agent participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
Financial Industry Regulatory Authority.

(q) Except at the request of the managing underwriters of an underwritten
offering, not prepare or distribute, or authorize any other Person to prepare or
distribute, any Free Writing Prospectus in connection with any such
registration.

 

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Each Holder shall be deemed to have agreed by acquisition of the Registrable
Securities that, upon receipt of any notice from the Company of the occurrence
of any event of the kind described in clauses (iv) through (vii) of subsection
(m) of this section 1.6, such Holder will forthwith discontinue its disposition
of the Registrable Securities pursuant to the Registration Statement relating
thereto until Holder’s receipt of the copies of the supplemented or amended
prospectus contemplated by subsection (e) of this section 1.6 and, if so
directed by the Company, will deliver to the Company all copies, other than
permanent file copies, then in Holder’s possession of the prospectus relating to
the Registrable Securities current at the time of receipt of such notice.

Notwithstanding anything to the contrary in this Section 1.6, at any time after
the applicable registration statement has been declared effective by the SEC,
the Company may delay the disclosure of material non-public information
concerning the Company the disclosure of which at the time is not otherwise
required by Law if, in the good faith opinion of the Company after consultation
with its financial advisors and legal counsel, the immediate disclosure of such
information would be seriously detrimental to the Company(a “Grace Period”);
provided, that the Company shall promptly (i) notify the Holders in writing of
the existence of material non-public information giving rise to a Grace Period
and the date on which the Grace Period will begin, and (ii) notify the Holders
in writing of the date on which the Grace Period ends; and, provided further,
that (A) no Grace Period shall exceed thirty (30) consecutive days, (B) during
any 365 day period such Grace Periods shall not exceed an aggregate of sixty
(60) days and (C) the first day of any Grace Period must be at least five
(5) days after the last day of any prior Grace Period. For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on
and include the date the Holders receive the notice referred to in clause
(i) and shall end on and include the later of the date the Holders receive the
notice referred to in clause (ii) and the date referred to in such notice. The
provisions of Section 1.6(e) hereof shall not be applicable during the period of
any Grace Period. Upon expiration of the Grace Period, the Company shall again
be bound by the provisions of Section 1.6(e) with respect to the information
giving rise thereto unless such material non-public information is no longer
applicable. The applicable Required Effectiveness Period shall be extended by
the length of any Grace Period occurring prior to the expiration thereof.

 

  1.7 Furnish Information; Limitation of Obligations.

It shall be a condition precedent to the obligations of the Company to take any
action pursuant to this Agreement with respect to the Registrable Securities of
any selling Holder as to which a registration is being effected to furnish, and
such Holder shall furnish, to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be reasonably required to effect the registration of
such Holder’s Registrable Securities.

 

  1.8 Expenses of Registrations.

(a) Except for underwriting discounts and commissions and transfer taxes, all
expenses incurred in connection with any registration pursuant to this Article
1, including all registration, filing and qualification fees, printers’ and
accounting fees, fees and disbursements of counsel for the Company and
reasonable fees and

 

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disbursements of Designated Counsel for the participating Holders (collectively,
“Registration Expenses”), shall be borne by the Company; provided, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 or Section 1.4 as applicable, if the
registration request is withdrawn prior to the effectiveness of the applicable
registration statement at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all participating Holders
shall bear all such expenses incurred), unless, in the case of a registration
requested under Section 1.2, the Holders of a majority of the Registrable
Securities agree to forfeit one Demand Registration pursuant to Section 1.2.

(b) Notwithstanding anything to the contrary in Section 1.8(a), if the Taylor
Representative requests a Demand Registration under Section 1.2, all reasonable
Registration Expenses incident to such Demand Registration will be borne by the
Taylor Holders holding Registrable Securities to be registered thereunder, pro
rata based on the number of Registrable Securities of the Taylor Holders
requested or permitted to be included in such registration pursuant to the terms
of this Agreement, and the Company shall not be obligated to incur any
Registration Expenses in connection with such Demand Registration, provided,
however, for purposes of this Section 1.8(b) all internal expenses (including
all salaries and expenses of its officers and employees performing legal or
accounting duties) and other costs incurred in the normal course of business
(including to costs of the Company’s outside auditors that would have been
incurred absent such registration) shall not be considered Registration Expenses
and shall be paid by the Company. If any securities are included in such
registration statement that are not owned by a Taylor Holder, then the Taylor
Holders shall only pay a pro rata portion of such Registration Expenses, based
on the ratio that the aggregate number of Registrable Securities held by the
Taylor Holders included in such registration statement bears to the total number
of securities included in such registration statement. In no event shall the
Taylor Holders be responsible for Registration Expenses where the Demand
Registration in question is requested by FIC or the Class A Holders.

 

  1.9 Indemnification.

(a) To the fullest extent permitted by law, the Company will indemnify and hold
harmless each Holder, any underwriter (as defined in the Securities Act) for
such Holder, their respective affiliates and controlling persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the partners, officers, directors members, representatives, agents and
employees of each Holder, and each such person (collectively, the “Holder
Indemnified Parties”), against any losses, claims, damages or liabilities (joint
or several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively, a
“Violation”) by the Company: (i) any untrue statement or alleged untrue

 

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statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any Free
Writing Prospectus prepared by or on behalf of the Company in connection
therewith, or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder Indemnified Party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, that the
indemnity agreement contained in this Section 1.9(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the written consent of the Company, nor shall the
Company be liable in any such case to any Holder Indemnified Party for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation which occurs in reliance upon and in conformity with
written information furnished by such Holder Indemnified Party under an
instrument duly executed by or on behalf of such Holder Indemnified Party
expressly for use in connection with such registration; provided further, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Holder Indemnified Party from whom the
person asserting any such losses, claims, damages or liabilities purchased
shares in the offering, 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 Holder Indemnified Party
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 loss, claim, damage or liability. For purposes of the last proviso
to the immediately preceding sentence, the term prospectus” shall not be deemed
to include the documents, if any, incorporated therein by reference, and no
person who participates as an underwriter in the offering or sale of Registrable
Securities or any other person, if any, who controls such underwriter within the
meaning of the Securities Act, shall be obligated to send or give any supplement
or amendment to any document incorporated by reference in any preliminary
prospectus or the final prospectus to any person other than a person to whom
such underwriter had delivered such incorporated document or documents in
response to a written request therefor. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
party and shall survive the transfer of such securities.

(b) To the extent permitted by law, each Holder shall, if shares held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of

 

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its directors, each of its officers who has signed the registration statement,
each person, if any, who controls the Company within the meaning of the
Securities Act, each underwriter and each other stockholder selling securities
under such registration statement against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder under an
instrument duly executed by such Holder expressly for use in connection with
such registration; and each Holder shall reimburse any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
Section 1.9(b), in connection with investigating or defending any such loss,
claim, damage, liability or action if it is judicially determined that there was
such Violation; provided, that the indemnity agreement contained in this
Section 1.9(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
written consent of such Holder, which consent shall not be unreasonably
withheld; provided further, that the liability of each Holder under this
Section 1.9(b) shall be limited to an amount equal to the net proceeds actually
received by such Holder in the registered public offering out of which such
liability arises, unless such liability arises out of or is based on willful
misconduct by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 1.9 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.9, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel selected by the indemnifying party and
reasonably satisfactory to the indemnified party (or parties); provided, that
the indemnified parties shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified parties by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified parties and the indemnifying party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.9 to the extent so
prejudiced, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 1.9.

 

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(d) If the indemnification provided for in this Section 1.9 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, liability, claim, damage or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation that resulted in such loss, liability, claim, damage or expense as
well as any other relevant equitable considerations; provided, however, that
(i) in no event shall any contribution by a Holder that is a selling party under
this Section 1.9(d) exceed the net proceeds from the offering received by such
Holder, and (ii) no Person who is guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) in connection with such
offering shall be entitled to contribution from anyone who was not guilty of
fraudulent misrepresentation in connection with such offering. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with an underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of each indemnified party, consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.

(f) The obligations of the Company and Holders under this Section 1.9 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1 and otherwise.

 

  1.10 Rule 144 Reporting.

With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
which may permit the sale of the Registrable Securities to the public without
registration or pursuant to a registration on Form S-3, so long as any of the
Holders hold any Registrable Securities, the Company agrees to use commercially
reasonable efforts to:

(a) make and keep public information available, as those terms are understood
and defined in SEC Rule 144;

 

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(b) file with the SEC in a timely manner all annual reports on Form 10-K and
quarterly reports on Form 10-Q required of the Company under the Exchange Act;

(c) keep its status as an issuer required to file reports under the Exchange
Act;

(d) maintain its eligibility to register the Registrable Securities on a Form
S-3 registration statement for resale by the Holders; and

(e) so long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon written request: (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and the Exchange Act; and
(ii) a copy of the most recent annual or quarterly report of the Company.

 

  1.11 Assignment of Registration Rights.

A Holder may assign any or all of its rights hereunder (but only with all
related obligations) to any person or entity to whom the Holder may transfer or
assign its Common Stock, Series A Preferred or Designated Preferred; provided,
that: (i) the Company is, within ten (10) Business Days after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (ii) such transferee or assignee agrees in writing to be bound
by and subject to the terms and conditions of this Agreement; and (iii) such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.

 

  1.12 Additional Restrictions.

So long as this Agreement is in effect, each of the Holders of Registrable
Securities agrees that during the 90-day period following the date any
Registration Statement (which such Holder had the opportunity to participate in
under Section 1.2 or 1.3) with respect to an underwritten public offering of
equity securities of the Company becomes effective, such Holder will not request
any other registration or effect any public sale or distribution (including any
short sale or any transaction that would result in any other Person engaging in
any public sale or distribution) of equity securities of the Company or any
other security of the Company convertible, exchangeable or exercisable (directly
or indirectly) for or into equity securities of the Company (other than pursuant
to such Registration Statement) including pursuant to Rule 144 or in a
transaction which would require registration under the Securities Act, unless
the managing underwriter of such public offering otherwise agrees in writing. If
(i) during the period that begins on the date that is 15 calendar days plus
three business days before the last day of the 90-day period referred to in the
immediately preceding sentence and ends on the last day of such 90-day 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 such 90-day
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of such 90-day period, the restrictions
imposed by this preceding sentence shall

 

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continue to apply until the expiration of the date that is 15 calendar days plus
3 business days after the date on which the issuance of the earnings release or
material news or the material event occurs.

 

  1.13 Confidential Information.

Each Holder of Registrable Securities agrees that any information obtained
pursuant to this Agreement which the Company identifies to be proprietary to the
Company or otherwise confidential will not be disclosed without the prior
written consent of the Company. Notwithstanding the foregoing, each Holder of
Registrable Securities may disclose such information, on a need to know basis,
to its employees, accountants or attorneys (so long as each such person to whom
confidential information is disclosed agrees to keep such information
confidential, and such Holder shall be responsible for any breach of the
confidentiality obligation by any such person) or to the extent required by
applicable law, rule, regulation or court order. Each Holder of Registrable
Securities further acknowledges, understands and agrees that any confidential
information will not be utilized in connection with purchases and/or sales of
the Company’s securities except in compliance with applicable state and federal
antifraud statutes.

 

  1.14 Termination of Registration Rights.

No Holder shall be entitled to exercise any right provided for in this Article 1
after such time at which all Registrable Securities held by such Holder (and any
affiliate of the Holder or other person with whom such Holder must aggregate
sales under Rule 144 of the Securities Act) can be sold without restriction
(including volume and manner-of-sale restrictions but excluding any current
public information requirement) on a single day without registration in
compliance with Rule 144 under the Securities Act (or any similar provision then
in effect) and such Holder has received, upon such Holder’s request, an opinion
of counsel to the Company to that effect.

 

2. Appointment of Taylor Representative.

 

  2.1 Appointment.

Each Taylor Holder (i) irrevocably constitutes and appoints [                ]
(the “Taylor Representative”) as such Stockholder’s true and lawful
attorney-in-fact and agent, (ii) agrees that this power of attorney is
irrevocable and coupled with an interest and (iii) authorizes the Taylor
Representative acting for such Taylor Holder and in such Taylor Holder’s name,
place and stead, in any and all capacities to do and perform every act and thing
required or permitted to be done in connection with the transactions
contemplated by this Agreement as fully to all intents and purposes as such
Taylor Holder might or could do in person, including:

(a) deliver all notices required to be delivered by such Taylor Holder under
this Agreement, including any notice of a Demand Registration;

(b) receive all notices required to be delivered to such Taylor Holder under
this Agreement;

 

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(c) select any investment banker(s) or managing underwriter(s) as permitted
under this Agreement;

(d) deliver and receive documents, including any registration statements,
prospectuses or amendments or supplements thereto, required under or in
connection with this Agreement or the transactions contemplated hereby, and to
agree to waivers or modifications of any such documents;

(e) execute and deliver such amendments, modifications, alterations and waivers
to this Agreement from time to time as the Taylor Representative deems necessary
or advisable; and

(f) take any and all action on behalf of such Taylor Holder from time to time as
the Taylor Representative may deem necessary or desirable to resolve and/or
settle claims under this Agreement.

At any time or from time to time, those Taylor Holders who hold a majority of
the then Registrable Securities held by all Taylor Holders may designate, by a
writing delivered to the Company, a successor Taylor Representative to serve in
place of the Taylor Representative previously appointed. Furthermore, each of
the Taylor Holders grants the Taylor Representative the authority to designate a
substitute to act in his stead if, at any time, the Taylor Representative is
not, or will not be, available to act pursuant to the authority granted
hereunder.

 

  2.2 Power-of Attorney.

Each of the Taylor Holders grants unto said attorneys-in-fact and agent full
power and authority to do and perform each and every act and thing necessary or
desirable to be done in connection with the transactions contemplated hereby, as
fully to all intents and purposes as the undersigned Taylor Holder might or
could do in person, hereby ratifying and confirming all that the Taylor
Representative may lawfully do or cause to be done by virtue hereof. Each of the
Taylor Holders acknowledges and agrees that upon execution and delivery by the
Taylor Representative of this Agreement or any amendments, modifications,
alterations or waivers hereof or agreements, certificates and other documents
executed and delivered by the Taylor Representative pursuant to Section 3.1
above, such Taylor Holder shall be bound by such documents as fully as if such
Taylor Holder had executed and delivered such documents.

 

  2.3 Successor Representative.

Upon the death, disability or incapacity of the initial Taylor Representative
appointed pursuant to Section 3.1, the Taylor Holders, or their personal
representatives, holding a majority of the Registrable Securities held by all
Taylor Holders shall appoint a replacement reasonably believed by such person as
capable of carrying out the duties and performing the obligations of such Taylor
Representative hereunder within ten (10) days of such death, disability or
incapacity. The Taylor Holders shall thereafter promptly provide the Company
with written notice of such replacement.

 

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  2.4 Authorized Actions.

Each Taylor Holder agrees that the Company shall be entitled to rely on any
action taken by the Taylor Representative, on behalf of the Taylor Holders,
pursuant to Section 3.1 (each, an “Authorized Action”), and that each Authorized
Action shall be binding on each Taylor Holder as fully as if such Taylor Holder
had taken such Authorized Action. The Taylor Holders jointly and severally agree
to pay, and to indemnify and hold harmless the Company, its directors and
officers and each Person who controls the Company (within the meaning of the
Securities Act), from and against any losses, claims, damages, liabilities and
expenses which they may suffer, sustain, or become subject to, as the result of
any claim by any Person that an Authorized Action is not binding on, or
enforceable against, any of the Taylor Holders. The Taylor Holders shall jointly
and severally indemnify the Taylor Representative and hold the Taylor
Representative harmless against any loss, liability or expense incurred without
gross negligence or bad faith on the part of the Taylor Representative and
arising out of or in connection with the acceptance or administration of the
Taylor Representative’s duties hereunder, including the reasonable fees and
expenses of any legal counsel retained by the Taylor Representative. The Taylor
Holders further agree that the existence of an actual or possible conflict of
interest between the Taylor Representative and the Taylor Holders will not give
rise to any presumption against the Taylor Representative nor will it limit or
impair his right to indemnification hereunder, absent further evidence of his
gross negligence or bad faith.

 

3. Miscellaneous.

 

  3.1 Successors and Assigns.

This Agreement will be binding upon and will inure to the benefit of the
signatories hereto and their respective successors and permitted assigns
(including transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.

 

  3.2 Governing Law.

This Agreement will be governed by and construed in accordance with the internal
Laws of the State of Illinois applicable to contracts made and wholly performed
within such state, without regard to any applicable conflict of laws principles.

 

  3.3 Counterparts.

This Agreement may be executed in two or more counterparts, all of which will be
considered one and the same agreement and will become effective when
counterparts have been signed by each of the parties and delivered to the other
parties (which may be facsimile or other form of electronic transmission), it
being understood that each party need not sign the same counterpart.

 

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  3.4 Notices.

All notices required or permitted pursuant to this Agreement will be in writing
and will be deemed to be properly given when actually received by the Person
entitled to receive the notice, in the case of the members of the Series A
Holders and the Taylor Holders, at the addresses set forth on Exhibits A and B
hereto, and in the case of the Company and FIC, at the following addresses:

Taylor Capital Group, Inc.

9550 West Higgins Road

Rosemont, Illinois 60018

Attention: Chief Financial Officer

Financial Investments Corporation

50 East Washington Street

Suite 400

Chicago, Illinois 60602

Attention: President

Any party may provide a different address for purposes of this Section 3.4 with
prior written notice to the Company.

 

  3.5 Attorneys’ Fees.

If any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorney’s fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

 

  3.6 Amendments and Waivers.

Any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of at least two-thirds of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities and the
Company. Notwithstanding the foregoing, any amendment or waiver that would
affect in any material respect the rights hereunder of any Holder in a manner
that is not equivalent to the affect on the rights hereunder of the other
Holders of the same type(s) of Registrable Securities as such Holder shall
require the consent of such Holder (it being understood and agreed that the
application of any provision of this Agreement (other than this Section 3.6) in
accordance with its terms shall not be deemed an amendment or waiver for
purposes of this provision).

 

  3.7 Other Agreements.

Neither the Company nor any of its subsidiaries has entered, as of the date
hereof, nor shall the Company or any of its subsidiaries, on or after the date
of this Agreement, enter into

 

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any agreement with respect to its securities that (a) would have the effect of
impairing the rights granted to the Holders in this Agreement, (b) disadvantages
the Holders with respect to their rights hereunder in connection with future
registrations or (c) otherwise conflicts with the provisions hereof.

 

  3.8 Specific Performance.

The parties hereby acknowledge and agree that the failure of any party to
perform its agreements and covenants hereunder, including its failure to take
all actions as are necessary on its part to the consummation of the
Transactions, will cause irreparable injury to the other parties for which
damages, even if available, will not be an adequate remedy. Accordingly, each
party hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of such party’s obligations and to
the granting by any court of the remedy of specific performance of its
obligations hereunder.

 

  3.9 Severability.

The illegality or partial illegality of any of this Agreement, or any provision
hereof, will not affect the validity of the remainder of this Agreement, or any
provision hereof, and the illegality or partial illegality of this Agreement
will not affect the validity of this Agreement in any jurisdiction in which such
determination of illegality or partial illegality has not been made, except in
either case to the extent such illegality or partial illegality causes this
Agreement to no longer contain all of the material provisions reasonably
expected by the parties to be contained therein.

 

  3.10 Rules of Construction.

(a) When a reference is made in this Agreement to Articles, Sections, Exhibits
or Schedules, such reference will be to an Article or Section or Exhibit or
Schedule to this Agreement unless otherwise indicated. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they will be
deemed to be followed by the words without “limitation.” Unless the context
otherwise requires, (i) or” is disjunctive but not necessarily exclusive,
(ii) words in the singular include the plural and vice versa, and (iii) the use
in this Agreement of a pronoun in reference to a party hereto includes the
masculine, feminine or neuter, as the context may require. This Agreement will
not be interpreted or construed to require any Person to take any action, or
fail to take any action, that would violate any applicable Law.

(b) The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties, and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

 

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3.11 Independent Nature. The decision of each Holder to enter into to this
Agreement has been made by such Holder independently of any other Holder.
Nothing contained herein, and no action taken by any Holder pursuant hereto or
thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert or as a group.
Each Holder confirms that it has independently participated in the review,
negotiation and entry into this Agreement with the advice of its own counsel and
advisors. The Company has elected to provide all Holders with the same terms and
Agreement for the convenience of the Company and not because it was required or
requested to do so by the Holders. Each Holder shall be entitled to
independently protect and enforce its rights arising out of, and subject to the
terms and conditions of, this Agreement.

 

  3.12 Entire Agreement.

This Agreement constitutes the entire agreement and supersedes the 2005 Taylor
Registration Rights Agreement (which is hereby terminated in its entirety) and
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter of this Agreement.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Company and the Holders have caused this Registration
Rights Agreement to be signed by its officer thereunto duly authorized, all as
of the date first written above.

[Signature Page to Registration Rights Agreement]

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EXHIBIT G

MANAGEMENT SERVICES AGREEMENT

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (the “Agreement”) is entered into as of
September         , 2008, by and between Taylor Capital Group, Inc. (the
“Company”) and Financial Investments Corporation (the “Advisor”).

WHEREAS, the Company and certain investors have entered into a Securities
Purchase Agreement, dated as of September 4, 2008 (the “Securities Purchase
Agreement”);

WHEREAS, it is a condition to the closing of the transactions contemplated by
the Securities Purchase Agreement that the Company and Advisor shall have
entered into this Agreement; and

WHEREAS, the Company wishes to retain the Advisor to provide certain management
and advisory services to the Company, and the Advisor is willing to provide such
services on the terms set forth below.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:

1. Services. The Advisor hereby agrees that, during the term of this Agreement
(the “Term”), it will provide to the Company, to the extent requested by the
Company and mutually agreed by the Company and the Advisor, management, advisory
and consulting services (the “Services”) in relation to the affairs of the
Company. The Services shall include, without limitation:

(a) advice in connection with the negotiation and consummation of agreements,
contracts, documents and instruments necessary to provide the Company with
financing on terms and conditions satisfactory to the Company and its
subsidiaries;

(b) advice in connection with acquisition, disposition and change of control
transactions involving the Company or its subsidiaries;

(c) financial, managerial and operational advice in connection with day-to-day
operations of the Company, including, without limitation, advice with respect to
the development and implementation of strategies for improving the operating,
marketing and financial performance of the Company or its subsidiaries; and

(d) such other services (which may include financial and strategic planning and
analysis, consulting services, human resources and executive recruitment
services and other services) as the Advisor and the Company may from time to
time agree in writing.

The Advisor shall provide the Services by and through itself and/or its
affiliates, officers, employees and/or representatives (collectively hereinafter
referred to as the “Advisor

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Designees”), as such Advisor in its reasonable discretion may designate from
time to time. The Advisor and the Advisor Designees will devote such time and
efforts to the performance of the Services contemplated hereby as the Advisor
deems reasonably necessary or appropriate; provided, however, that no minimum
number of hours is required to be devoted by the Advisor or any of the Advisor
Designees on a weekly, monthly, annual or other basis. The Company acknowledges
that each of the Services is not exclusive to the Company or its subsidiaries,
and that the Advisor and the Advisor Designees may render similar services to
other persons and entities, subject to any other contractual or fiduciary
obligations any such person may have to the Company or any of its
subsidiaries. The Advisor acknowledges and agrees that the Company or its
subsidiaries may from time to time engage one or more investment bankers,
financial advisers, consultants or service provides to provide services in
addition to, or in lieu of, the Services provided by the Advisor and the Advisor
Designees under this Agreement. In providing the Services to the Company or its
subsidiaries, the Advisor and Advisor Designees will act as independent
contractors and it is expressly understood and agreed that this Agreement is not
intended to create, and does not create, any partnership, agency, joint venture
or similar relationship and that no party has the right or ability to contract
for or on behalf of any other party or to effect any transaction for the account
of any other party.

2. Compensation.

(a) On the date hereof, in full consideration for the Services, the Company will
pay to the Advisor a fee of $750,000 in cash and will issue to the Advisor or
its designee a warrant to purchase 500,000 shares of the Company’s Common Stock,
in the form attached hereto as Exhibit A. Such compensation shall not be
refundable under any circumstances.

(b) In addition to the compensation to be paid pursuant to Section 2(a), the
Company hereby agrees to pay or reimburse Advisor for all Reimbursable Expenses
(hereinafter defined). For purposes of this Agreement, “Reimbursable Expenses”
shall mean all reasonable and documented disbursements and out-of-pocket
expenses, including, without limitation, (i) costs of travel, that are incurred
by Advisor or its affiliates for the account of the Company or in connection
with the performance by Advisor of the Services contemplated in this Agreement,
in each case, in accordance with the related policies of the Company for
reimbursement of such expenses, and (ii) costs of the Advisor or any Advisor
Designee in enforcing its rights pursuant to this Agreement. The Company shall
pay Advisor within 30 days of receipt by the Company of an invoice including
reasonably detailed descriptions and supporting documentation of any
Reimbursable Expenses.

3. Board of Director Designees. From the date hereof until the first date that
both (a) the Restated Charter (as defined in the Stock Purchase Agreement) has
been filed with the Secretary of State and the Series A Preferred (as defined in
the Stock Purchase Agreement) has been issued and (b) both (x) fewer than
800,000 shares of Series A Preferred are issued and outstanding (subject to
anti-dilution adjustment for stock splits, stock dividends and the like with
respect to Series A Preferred) and (y) the outstanding shares of Series A
Preferred represent less than 10% or more of the Total Voting Power (as defined
in the Stock Purchase Agreement):

A. The Company shall make its best effort to cause two persons designated by
Advisor (such persons, together with their successors as set forth in F. below,
the “Designees”)

 

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to be elected to the Board of Directors of the Company (it being understood that
such Designees shall be considered the director candidates of the Advisor in
accordance with Section 2.9 of the Amended and Restated By-laws (as defined in
the Stock Purchase Agreement));

B. At each meeting of the stockholders of the Company at which directors of the
Company are to be elected and in each proxy statement relating thereto, the
Company shall recommend that the stockholders elect the Designees to the Board
of Directors of the Company;

C. The Company shall cause the Designees to be elected to and maintained as a
member of the Board of Directors of the Bank;

D. Each Designee that is not an employee of the Company and that is elected to
the Board of Directors of the Company shall be entitled to and shall receive
customary cash, equity and other compensation for board service on the same
terms and conditions as other non-employee directors of the Company;

E. The Company shall enter into an indemnification agreement with each Designee
that is elected to the Board of Directors of the Company in the form attached as
Exhibit H to the Stock Purchase Agreement or such other form as such Designee
and the Company mutually agree; and

F. In the event there is any vacancy on the Board of Directors as a result of a
Designee no longer serving as a member of the Board of Directors of the Company
or the Bank for any reason, the Company shall cause such vacancy to be filled by
a person designated by Advisor.

Notwithstanding the foregoing, the rights granted to Advisor pursuant to this
paragraph shall immediately cease upon a Change in Control of Advisor. For this
purpose, a “Change in Control of Advisor” shall occur on the first date on which
a majority of the outstanding voting securities of Advisor are no longer
beneficially owned by the Harrison I. Steans 2004 Multigenerational Trust (the
“Current Registered Holder”) and Permitted Transferees (as defined below). For
purposes of this paragraph, a “Permitted Transferee” shall mean any (a) nominee
of such Current Registered Holder (provided that such Current Registered Holder
continues to have beneficial ownership, as such term is defined under
Section 13(d) of the Securities Exchange Act of 1934, as amended, of such voting
securities of the Advisor), (b) a beneficiary or trustee of such Current
Registered Holder or any child, stepchild, descendant, parent, stepparent,
spouse, widow, widower, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of any such person, and any
person (other than a tenant or employee) sharing the household of such person
(the “Family Members”), (c) any estate of a Family Member, or any trust of which
any Family Member is a trustee or any trust established by or for the benefit of
one or more Family Members, (d) any charitable organizations which qualify as
exempt organizations under Section 501(c) of the Internal Revenue Code of 1986,
as amended, which is established and controlled by one or more Family Members (a
“Family Charitable Organization”); (e) any corporation of which a majority of
the voting power or a majority of the equity interest is held, directly or
indirectly, by or for the benefit of one or more Family Members, estates or
trusts described in clause (c) above, or Family Charitable Organizations; or
(f) any partnership, limited liability company or other entity or arrangement of
which a majority

 

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of the voting interest or a majority of the economic interest is held, directly
or indirectly, by or for the benefit of one or more Family Members, estates or
trusts described in clause (c) above, or Family Charitable Organizations. The
Advisor represents and warrants that the Current Registered Holder is the
registered holder of all of the voting securities of the Advisor as of
                    , 2008. The Advisor covenants and agrees to provide the
Company with written notice of a Change of Control of Advisor within 5 business
days following the effectuation thereof.

The foregoing obligations shall not limit or preclude the Board of Directors of
the Company or the Bank from taking or failing to take any action that the Board
of Directors of the Company or the Bank determines in good faith, consistent
with the legal opinion of its outside legal counsel, that to do otherwise would
violate its fiduciary duties under applicable law.

4. Term. This Agreement will continue in full force and effect until June 30,
2009, unless earlier terminated by the mutual agreement of the parties hereto;
provided that notwithstanding the foregoing, the terms of Sections 2 through 15
hereof shall survive any termination of this Agreement.

5. Indemnification.

(a) Scope of Indemnity. The Company will indemnify, defend and hold harmless the
Advisor and the Advisor Designees and each of their respective affiliates,
stockholders, partners, directors, officers, employees, agents and controlling
persons (collectively, the “Indemnitees”) from and against any and all actual
liabilities, losses, damages, costs and out-of-pocket expenses (including
reasonable attorneys’ fees and expenses) incurred by the Indemnitees or any of
them before or after the date of this Agreement (collectively, the “Indemnified
Liabilities”), arising out of any action, cause of action, suit, arbitration,
investigation or claim arising out of, in connection with or relating to, this
Agreement or the engagement of the Advisor pursuant to, or the performance by
the Advisor of the Services contemplated by, this Agreement.

(b) Notwithstanding the foregoing, the indemnification rights set forth in
Section 5(a) hereof will not be available to the extent that any such
Indemnified Liabilities result from, or arise on account of, an Indemnitee’s
gross negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction to such effect.

(c) To the extent that the provisions of Section 5(b) are determined to apply to
any Indemnitee as to any previously advanced indemnity payments made by the
Company, then such payments will be promptly repaid by such Indemnitee to the
Company.

(d) In and to the extent the obligations of the Company pursuant to Section 5(a)
are determined by a final non-appealable judgment of a court of competent
jurisdiction to be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.

 

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(e) The Company hereby agrees that this Section 5, and Section 6 below, shall be
applicable and enforceable with respect to any of the Services provided by
Advisor or an Advisor Designee prior to the date first written above.

(f) The rights of any Indemnitee to indemnification hereunder will be in
addition to any rights any such person may have under any other agreement or
instrument to which such Indemnitee is or becomes a party or is or otherwise
becomes a beneficiary or under law or regulation.

6. Disclaimer; Standard of Care.

(a) No Advisor or Advisor Designee makes any representations or warranties,
express or implied, in respect of the Services to be provided by the Advisor or
the Advisor Designees hereunder. In no event will the Advisor, the Advisor
Designees or Indemnitees be liable to the Company or any of its affiliates for
any act, alleged act, omission or alleged omission that does not constitute
gross negligence or willful misconduct of the Advisor or the Advisor Designees
as determined by a final determination of a court of competent jurisdiction.

(b) In no event will an Advisor, Advisor Designee or any of their respective
Indemnitees be liable to the Company or any of its stockholders, affiliates,
officers or directors for any indirect, special, incidental or consequential
damages, including, without limitation, lost profits or savings, or for any
third party claims (whether based in contract, tort or otherwise)relating to the
services to be provided by Advisor or an Advisor Designee hereunder.

(c) Subject to any other contractual or fiduciary obligations any such person
may have to the Company or any of its subsidiaries, the Advisor, the Advisor
designee and their respective Indemnitees will have the right: (A) to directly
or indirectly engage in any business (including, without limitation, any
business activities or lines of business that are the same or similar to those
pursued by, or competitive with, the Company and its subsidiaries), (B) to
directly or indirectly do business with the Company, its subsidiaries or their
respective customers and (C) not to present potential transactions, matters or
business opportunities to the Company or any of its subsidiaries, and to pursue,
directly or indirectly, any such opportunity for itself, and to direct any such
opportunity to another Person.

7. Assignment. Except as provided below, none of the parties hereto will have
the right to assign this Agreement without the prior written consent of the
other party.

8. Amendments and Waivers. This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may be given, provided that the same are in writing and signed by the parties
hereto. No waiver on any one occasion will extend to or effect or be construed
as a waiver of any right or remedy on any future occasion. No course of dealing
of any person nor any delay or omission in exercising any right or remedy will
constitute an amendment of this Agreement or a waiver of any right or remedy of
any party hereto.

9. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF. ANY

 

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ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT
MAY BE BROUGHT AND ENFORCED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS
OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFOR) THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS SITTING IN CHICAGO, AND THE
PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF
ANY SUCH ACTION OR PROCEEDING.

10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY.

11. Entire Agreement. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes any prior
communication or agreement with respect thereto.

12. Notice. All notices, demands, and communications required or permitted under
this Agreement will be in writing and will be effective if served upon such
other party and such other party’s copied persons as specified below to the
address set forth for it below (or to such other address as such party will have
specified by notice to each other party) if (i) delivered personally, (ii) sent
and received by facsimile, (iii) sent by electronic mail or (iv) sent by
certified or registered mail or by Federal Express, DHL, UPS or any other
comparably reputable overnight courier service, postage prepaid, to the
appropriate address as follows:

If to the Company, to:

Taylor Capital Group, Inc.

9550 West Higgins Road

Rosemont, Illinois 60018

Facsimile: (847) 653-7890

Attention: Mr. Bruce W. Taylor

with a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661

Facsimile: (312) 902-1061

Attention: Jeffrey R. Patt, Esq.

 

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If to Advisor, to:

Financial Investments Corporation

50 E. Washington Street

Suite 400

Chicago, IL 60602

Facsimile: (312) 494-1494

Attention: Harrison I. Steans

                  Jennifer W. Steans

with a copy (which shall not constitute notice) to:

Sonnenschein Nath & Rosenthal LLP

7800 Sears Tower

Chicago, IL 60606

Facsimile: (312) 876-7934

Attention: Donald G. Lubin, Esq.

Unless otherwise specified herein, such notices or other communications will be
deemed effective, (a) on the date received, if personally delivered or sent by
facsimile or electronic mail during normal business hours, (b) on the business
day after being received if sent by facsimile or electronic mail other than
during normal business hours, (c) one business day after being sent by Federal
Express, DHL or UPS or other comparably reputable delivery service and (d) five
business days after being sent by registered or certified mail. Each of the
parties hereto will be entitled to specify a different address by giving notice
as aforesaid to each of the other parties hereto.

13. Severability. If in any proceedings a court will refuse to enforce any
provision of this Agreement, then such unenforceable provision will be deemed
eliminated from this Agreement for the purpose of such proceedings to the extent
necessary to permit the remaining provisions to be enforced. To the full extent,
however, that the provisions of any applicable law may be waived, they are
hereby waived to the end that this Agreement be deemed to be valid and binding
agreement enforceable in accordance with its terms, and in the event that any
provision hereof will be found to be invalid or unenforceable, such provision
will be construed by limiting it so as to be valid and enforceable to the
maximum extent consistent with and possible under applicable law.

14. Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to specific performance
of the terms and provisions hereof, in addition to any other remedy to which
they are entitled to at law or in equity.

 

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15. Counterparts. This Agreement may be executed in any number of counterparts
and by each of the parties hereto in separate counterparts (which may be
transmitted by facsimile or other electronic transmission), each of which when
so executed will be deemed to be an original and all of which together will
constitute one and the same agreement.

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

COMPANY:

TAYLOR CAPITAL GROUP, INC.

By:  

 

Name:

  Bruce W. Taylor

Title:

  Chief Executive Officer

 

ADVISOR:

FINANCIAL INVESTMENTS

CORPORATION

By:  

 

Name:   Title:  

[Signature Page of Exhibit 10(b)(1) - Management Services Agreement]

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EXHIBIT A

FORM OF WARRANT

[See Form of FIC Warrant

attached as Exhibit J

to the Securities Purchase

Agreement]

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EXHIBIT H

FORM OF INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT

This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this
         day of                     , 2008 (the “Effective Date”) by and between
Taylor Capital Group, Inc., a Delaware corporation (the “Company”), and
                                         (the “Indemnitee”).

WHEREAS, upon the receipt of stockholder approval and the filing with the
Secretary of State of Delaware of the Restated Charter (as defined in that
certain Securities Purchase Agreement dated as of August ___, 2008 between the
Company and each of the investors listed on the Schedule of Buyers attached
thereto), the power and authority conferred upon the Company’s Board of
Directors (the “Board of Directors” or the “Board”) by the DGCL (as defined
herein) will be exercised and performed, in accordance with Section 141(a)
thereof, by the Board of Directors; provided, however, that pursuant to
Section 141(a) of the DGCL certain of such powers and authority of the Board of
Directors shall also be exercised by and require the further approval of the
Executive Committee described in Article Fifth of the Restated Charter (the
“Executive Committee”);

WHEREAS, the Company believes it is essential to retain and attract qualified
directors and Executive Committee members and the Indemnitee is a director
and/or member of the Executive Committee of the Company, and both the Company
and the Indemnitee recognize the increased risk of litigation and other claims
being asserted against directors and governing bodies of public companies;

WHEREAS, the Company’s Amended and Restated By-laws (the “By-laws”) require the
Company to indemnify and advance expenses to its directors and Executive
Committee members to the fullest extent permitted by the DGCL;

WHEREAS, the Company’s Amended and Restated Certificate of Incorporation (the
“Certificate of Incorporation”) as currently in effect provides for exculpation
of director liability to the fullest extent permitted by the DGCL;

WHEREAS, in recognition of the Indemnitee’s need for (i) substantial protection
against personal liability based on the Indemnitee’s reliance on the Certificate
of Incorporation and By-laws, (ii) specific contractual assurance that the
protection promised by the Certificate of Incorporation and By-laws will be
available to the Indemnitee, regardless of, among other things, any amendment to
the Certificate of Incorporation and By-laws, or any change in the composition
of the Board of Directors or the Executive Committee, or any acquisition
transaction relating to the Company, and as an inducement to continue to provide
effective services to the Company as a director and/or Executive Committee
member thereof, the Company wishes to provide for the indemnification of the
Indemnitee and to provide for the advancement of expenses to the Indemnitee to
the fullest extent permitted by law and as set forth in this Agreement, and, to
the extent insurance is maintained by the Company, to provide for the continued
coverage of the Indemnitee under the Company’s directors’ and officers’
liability insurance policies;

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WHEREAS, the Board has determined that contractual indemnification as set forth
herein is reasonable and prudent and promotes the best interests of the Company
and its stockholders;

WHEREAS, this Agreement is a supplement to and in furtherance of the provisions
in the Certificate of Incorporation and By-laws and any resolutions adopted
pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish
or abrogate any rights of Indemnitee thereunder;

WHEREAS, the Company desires and has requested Indemnitee to serve or continue
to serve as a director and/or Executive Committee member of the Company free
from undue concern for unwarranted claims for damages arising out of or related
to such services to the Company, and Indemnitee is willing to serve or continue
to serve the Company on the condition that he is furnished the indemnity
provided for herein.

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein and of the Indemnitee continuing to serve the Company directly or, at its
request, with another enterprise, and intending to be legally bound hereby, the
parties hereto agree as follows:

1. Certain Definitions.

(a) A “Change in Control” shall be deemed to have occurred if or upon:

(i) the stockholders of the Company approve the sale, lease or transfer, in one
or a series of related transactions, of all or substantially all of the
Company’s assets (determined on a consolidated basis) to any person or group (as
such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (“Exchange Act”);

(ii) the stockholders of the Company approve a merger or consolidation of the
Company with any other person, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 60% of the
total voting power represented by the Voting Securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;

(iii) the stockholders of the Company approve the adoption of a plan the
consummation of which would result in the liquidation or dissolution of the
Company;

(iv) the acquisition, directly or indirectly, by any person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) (other than (a) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company; or (b) a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company) of beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) of more than 33 1/3% of the aggregate voting power of the Voting
Securities of the Company; or

(v) during any period of two consecutive years, individuals who at the beginning
of such period composed the Board of Directors (together with any new directors
whose election by such Board of Directors or whose nomination for election by

 

2

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the stockholders of the Company was approved by a vote of 66 2/3% of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office.

(b) “DGCL” shall mean the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended or interpreted; provided, however,
that in the case of any such amendment or interpretation, only to the extent
that such amendment or interpretation permits the Company to provide broader
indemnification rights than were permitted prior thereto.

(c) “Expense” shall mean any expense, liability, or loss, including reasonable
attorneys’ fees, judgments, fines, ERISA excise taxes and penalties, amounts
paid or to be paid in settlement, any interest, assessments, or other charges
imposed thereon, any federal, state, local, or foreign taxes imposed as a result
of the actual or deemed receipt of any payments under this Agreement, and all
other costs and obligations, paid or incurred in connection with investigating,
defending, being a witness in, participating in (including in the case of an
appeal resulting from any Proceeding, the premium, security for, and other costs
relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent), or preparing for any of the foregoing in, any Proceeding relating
to any Indemnifiable Event.

(d) “Indemnifiable Event” shall mean any event or occurrence that takes place
either prior to or after the execution of this Agreement, related to the fact
that the Indemnitee is or was a director and/or Executive Committee member of
the Company, or while a director and/or Executive Committee member is or was
serving at the request of the Company as a director, officer, employee, or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, or by
reason of anything done or not done by the Indemnitee in any such capacity,
whether or not the basis of the Proceeding is alleged action in an official
capacity.

(e) “person” shall mean any individual, corporation, general partnership,
limited partnership, limited liability partnership, joint venture, association,
joint-stock company, trust, limited liability company, unincorporated
organization or government or any agency or political subdivision thereof.

(f) “Proceeding” shall mean any threatened, pending or completed action, suit,
investigation or proceeding, and any appeal thereof, whether civil, criminal,
administrative or investigative and/or or any alternative dispute resolution
mechanism (including an action by or in the right of the Company), and/or any
inquiry or investigation, whether conducted by the Company or any other party,
that the Indemnitee in good faith determines would reasonably be expected to
lead to the institution of any such action, suit, or proceeding, whether civil,
criminal, administrative, investigative, or other.

(g) “Reviewing Party” shall mean, prior to any Change in Control, any
appropriate person or body consisting of a member or members of the Board or any
other person or body appointed by the Board who is not a party to the particular
Proceeding with respect to which Indemnitee is seeking indemnification. After a

 

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Change in Control (other than a Change in Control approved by a majority of the
directors on the Board who were directors immediately prior to such Change in
Control), the special independent counsel referred to in Section 7 below shall
become the Reviewing Party.

(h) “Voting Securities” shall mean any securities of the Company which are
entitled to vote generally in matters (other than the election of directors)
submitted for a vote of the Company’s stockholders.

2. Indemnification.

(a) General Agreement. In the event Indemnitee was, is, or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Proceeding by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and
against any and all Expenses to the fullest extent permitted by law, as the same
exists or may hereafter be amended or interpreted (but in the case of any such
amendment or interpretation, only to the extent that such amendment or
interpretation permits the Company to provide broader indemnification rights
than were permitted prior thereto).

(b) Certain Exceptions. Indemnitee shall not be entitled to indemnification
pursuant to this Agreement:

(i) in connection with any Proceeding initiated by Indemnitee against the
Company or any director or officer of the Company, and not by way of defense,
including without limitation, any affirmative defenses or counterclaims, unless
(x) the Company has joined in or the Board has consented to the initiation of
such Proceeding; or (y) the Proceeding is one to enforce indemnification rights
under Section 6;

(ii) for an accounting of profits made from the purchase and sale (or sale and
purchase) by Indemnitee of securities of the Company within the meaning of
Section 16(b) of the Exchange Act or similar provisions of applicable state law;

(iii) pursuant to Sections 304 of the Sarbanes-Oxley Act of 2002, as amended, or
any rule or regulation promulgated pursuant thereunder; or

(iv) if, and to the extent, that it is ultimately determined by a court of
competent jurisdiction in a final judgment, not subject to appeal, that such
indemnification is prohibited by applicable law.

(c) Mandatory Indemnification. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, Indemnitee
shall be indemnified against all Expenses incurred in connection therewith.

(d) Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of
Expenses, but not, however, for the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled.

 

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3. Indemnification Procedures.

(a) Notice of Indemnifiable Event. Indemnitee shall give the Company notice as
soon as reasonably practicable of any Indemnifiable Event of which Indemnitee
becomes aware, provided that any failure to so notify the Company shall not
relieve the Company of any of its obligations under this Agreement, except if,
and then only to the extent that, the Company establishes that such omission was
materially prejudicial to the Company and such failure increases the liability
of the Company under this Agreement.

(b) Notice to Insurers. If, at the time the Company receives notice of an
Indemnifiable Event, whether pursuant to Section 3(a) above or otherwise, and
the Company has liability insurance in effect which may cover such Indemnifiable
Event, the Company shall give prompt written notice of such Indemnifiable Event
to the insurers in accordance with the procedures set forth in each of the
applicable policies of insurance. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such Indemnifiable Event in
accordance with the terms of such policies; provided that nothing in this
Section 3(b) shall affect the Company’s obligations under this Agreement or the
Company’s obligations to comply with the provisions of this Agreement in a
timely manner as provided.

(c) Selection of Counsel. With respect to any Proceeding for which
indemnification or advances of expenses is requested pursuant to this Agreement,
the Company will be entitled to participate in any Proceeding at its own expense
and, except as otherwise provided below, to the extent that it may wish, the
Company may assume the defense of any Proceeding for which indemnification is
sought hereunder with counsel satisfactory to the Indemnitee (such approval not
to be unreasonably withheld). The Indemnitee will have the right to employ the
Indemnitee’s counsel in any Proceeding, but the fees and expenses of the
Indemnitee’s counsel incurred after the Company assumes the defense of the
Proceeding will be at the expense of the Indemnitee, unless (i) the employment
of counsel by the Indemnitee has been authorized by the Company, (ii) the
Indemnitee has concluded following consultation with counsel that there is a
reasonable likelihood that a conflict of interest exists between the Company and
the Indemnitee in the conduct of the defense of a Proceeding, or (iii) the
Company has not in fact employed counsel to assume the defense of a Proceeding.
In each of the foregoing cases the fees and expenses of the Indemnitee’s counsel
will be at the expense of the Company. Notwithstanding the foregoing, the
Company shall not be entitled to assume the defense of any Proceeding brought by
or in the name or right of the Company or any Proceeding as to which you have
concluded that there may be a conflict of interest between the Company and you.

4. Advancement of Expenses. The Company shall advance any and all Expenses to
Indemnitee in connection with any Proceeding (an “Expense Advance”), and such
advancement shall be made as soon as practicable and in any event within 10
business days after the receipt by the Company of a written notice from
Indemnitee requesting such advances from time to time; provided, however, that
if required by applicable law such Expenses shall be advanced only upon

 

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delivery to the Company of a written undertaking by or on behalf of the
Indemnitee to repay such amount only if, and then only to the extent, it is
ultimately determined by a court of competent jurisdiction in a final judgment,
not subject to appeal, that the Indemnitee is not entitled to be indemnified by
the Company and, provided further that no advancement of Expenses hereunder
shall include any amounts paid or to be paid in settlement by Indemnitee, or the
amount of any judgments or fines against Indemnitee if and to the extent
Delaware law expressly prohibits such payments by reason of any adjudication of
liability of Indemnitee to the Company in a Proceeding by or in the name of the
Company, unless and only to the extent that the Court of Chancery of the State
of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, Indemnitee is entitled to payment for
such Expenses as such court shall deem proper. Advances shall continue until
final disposition, not subject to appeal, of any Proceeding and shall be made
without regard to Indemnitee’s ability to repay the expenses and without regard
to Indemnitee’s ultimate entitlement to indemnification under the other
provisions of this Agreement. This Section 4 shall not apply to any claim made
by Indemnitee (a) for which indemnity is excluded pursuant to Section 2(b).

5. Review Procedure for Indemnification. Notwithstanding the foregoing, the
obligations of the Company under Section 2 above shall be subject to the
condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the special independent counsel referred to in
Section 7 hereof is the Reviewing Party) that the Indemnitee would not be
permitted to be indemnified under applicable law; provided, however, that if the
Indemnitee has commenced legal proceedings in a court of competent jurisdiction
pursuant to Section 6 below to secure a determination that the Indemnitee should
be indemnified under applicable law, any determination made by the Reviewing
Party that the Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and the Indemnitee shall not be required to
reimburse the Company for any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or have lapsed). The Indemnitee’s obligation to
reimburse the Company for Expense Advances pursuant to this Section 5 shall be
unsecured and no interest shall be charged thereon. If there has not been a
Change in Control, the Reviewing Party shall be selected by the Board, and if
there has been such a Change in Control, other than a Change in Control which
has been approved by a majority of the Company’s Board who were directors
immediately prior to such Change in Control, the Reviewing Party shall be the
special independent counsel referred to in Section 7 hereof.

6. Enforcement of Indemnification Rights.

(a) Enforcement Proceedings. If the Reviewing Party determines that the
Indemnitee substantively would not be permitted to be indemnified in whole or in
part under applicable law, or if the Indemnitee has not otherwise been paid in
full pursuant to Sections 2 and 3 above within 10 business days after a written
demand has been received by the Company, the Indemnitee shall have the right to
commence litigation in any court in the State of Delaware having subject matter
jurisdiction thereof and in which venue is proper to recover the unpaid amount
of the demand (an “Enforcement Proceeding”) and, if successful in whole or in
part, the Indemnitee shall be entitled to be paid any and all Expenses in
connection with such Enforcement Proceeding. The Company hereby consents to
service of process for such Enforcement Proceeding and to appear in any such
Enforcement Proceeding. Any determination by the Reviewing Party not challenged
by the Indemnitee shall be binding on the Company and Indemnitee. The remedy
provided for in this Section 6 shall be in addition to any other remedies
available to Indemnitee at law or in equity.

 

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(b) Defense to Indemnification, Burden of Proof, and Presumptions. It shall be a
defense to any action brought by Indemnitee against the Company to enforce this
Agreement (other than an action brought to enforce a claim for Expenses incurred
in defending a Proceeding in advance of its final disposition) that it is not
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed. In connection with any such action or any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proving such a defense or determination
shall be on the Company. Neither the failure of the Reviewing Party or the
Company (including its Board, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such action by Indemnitee
that indemnification of the claimant is proper under the circumstances because
Indemnitee has met the standard of conduct set forth in applicable law, nor an
actual determination by the Reviewing Party or Company (including its Board,
independent legal counsel, or its stockholders) that the Indemnitee had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the Indemnitee has not met the applicable standard of
conduct.

For purposes of this Agreement, to the fullest extent permitted by law, (1) the
termination of any Proceeding, action, suit, or claim, by judgment, order,
settlement (whether with or without court approval), conviction, or upon a plea
of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law, and (2) Indemnitee shall be deemed, for purposes of
any determination of good faith, to have acted in good faith if Indemnitee’s
action is based on the records or books of account of the Company, including
financial statements and regulatory reports, or on information supplied to
Indemnitee by the officers of the Company in the course of their duties, or on
the advice of legal counsel for the Company or the Board or the Executive
Committee or counsel selected by any committee of the Board or on information or
records given or reports made to the Company by an independent certified public
accountant or by an appraiser, investment banker or other expert selected with
reasonable care by the Company or the Board or the Executive Committee or any
committee of the Board. The knowledge and/or actions, or failure to act, of any
director, Executive Committee member, officer, agent or employee of the Company
or other covered enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.

The provisions of this Section 6(b) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee may be deemed
to have met the applicable standard of conduct set forth in this Agreement.

7. Change in Control. The Company agrees that if there is a Change in Control of
the Company (other than a Change in Control which has been approved by a
majority of the Company’s Board who were directors immediately prior to such
Change in Control), then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under applicable law or
the Certificate of Incorporation or By-laws now or hereafter in effect relating
to indemnification for Indemnifiable Events, the Company shall seek legal advice
only from special independent counsel selected by the Indemnitee and approved by
the Company, which approval shall not be unreasonably withheld. Such special
independent counsel shall not have

 

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otherwise performed services for the Company or the Indemnitee, other than in
connection with such indemnification matters, within the last five years. Such
independent counsel shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or the Indemnitee in an action to
determine the Indemnitee’s rights under this Agreement. Such counsel, among
other things, shall render its written opinion to the Company and the Indemnitee
as to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to furnish a reasonable
retainer to and pay the reasonable fees of the special independent counsel
referred to above and to indemnify fully such counsel against any and all
expenses (including reasonable attorneys’ fees), claims, liabilities and damages
arising out of or relating to this Agreement or the engagement of special
independent counsel pursuant to this Agreement.

8. Non-exclusivity. The rights of the Indemnitee hereunder shall be in addition
to any other rights the Indemnitee may have under any statute, provision of the
Certificate of Incorporation or By-laws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office. To the extent
that a change in applicable law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded currently
under the Certificate of Incorporation and By-laws and this Agreement, it is the
intent of the parties hereto that the Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change.

9. Liability Insurance. To the extent the Company maintains an insurance policy
or policies providing directors’ and officers’ liability insurance, the
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, in such a manner as to provide Indemnitee with the same rights
and benefits as are accorded to the most favorably insured of the Company’s
directors or officers.

10. Settlement of Claims. The Company shall not be liable to indemnify the
Indemnitee under this Agreement for any amounts paid in settlement of any
action, suit, claim or proceeding effected without the Company’s written
consent, which consent shall not be unreasonably withheld; provided, however,
that if a Change in Control has occurred (other than a Change in Control
approved by a majority of the directors on the Board who were directors
immediately prior to such Change in Control), the Company shall be liable for
indemnification of Indemnitee for amounts paid in settlement and otherwise
permitted hereunder and not prohibited by any applicable law if the independent
counsel referred to in Section 7 above has approved the settlement. The Company
shall not settle any action, suit or proceeding in any manner that would impose
any fine or other penalty or obligation on Indemnitee without Indemnitee’s prior
written consent.

11. Amendment of this Agreement. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
binding unless in the form of a writing signed by the party against whom
enforcement of the waiver is sought, and no such waiver shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver. Except as specifically
provided herein, no failure to exercise or any delay in exercising any right or
remedy hereunder shall constitute a waiver thereof.

 

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12. Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
the Indemnitee, who shall execute all papers required and shall do everything
that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

13. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, By-law, vote,
agreement or otherwise) of the amounts otherwise indemnifiable hereunder.

14. Binding Effect; Successors; Duration.

(a) The rights of the Indemnitee hereunder shall vest immediately and fully upon
entry into this Agreement and shall remain fully vested after Indemnitee has
ceased to be a director and/or Executive Committee member. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
executors, administrators and personal and legal representatives.

(b) The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially
all, or a substantial part, of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to the Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform if no such
succession had taken place.

(c) This Agreement may not be terminated except by a writing to that effect
executed by the parties hereto. All agreements and obligations of the Company
contained herein shall continue during the period that Indemnitee is a director,
Executive Committee member, officer or agent of the Company and shall continue
until and terminate upon the later of (i) ten years after Indemnitee has ceased
to serve as a director, Executive Committee member, officer or agent of the
Company, as the case may be, or (ii) one year after the final termination of all
pending or threatened Proceedings of the kind described herein with respect to
Indemnitee.

15. Contribution. To the fullest extent permissible under applicable law, if,
and to the extent, the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for Expenses, in connection with any claim relating to
an indemnifiable event under this Agreement, in such proportion as is deemed
fair and reasonable in light of all of the circumstances of such Proceeding in
order to reflect (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving cause to
such Proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s). 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.

 

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16. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that, in
certain instances, Federal law or public policy may override applicable state
law and prohibit the Company from indemnifying its directors, Executive
Committee members and officers under this Agreement or otherwise. For example,
the Company and Indemnitee acknowledge that the SEC has taken the position that
indemnification is not permissible for liabilities arising under certain Federal
securities laws, and Federal legislation prohibits indemnification for certain
ERISA violations. Indemnitee understands and acknowledges that the Company has
undertaken, or may be required in the future to undertake, with the SEC to
submit the question of indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee, and any right to indemnification hereunder shall be subject to, and
conditioned upon, any such required court determination.

17. Severability. If any provision or provisions of this Agreement shall be held
to be invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be
deemed reformed to the extent necessary to conform to applicable law and to give
the maximum effect to the intent of the parties hereto; and (c) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, each portion of any Section of this Agreement containing any such
provision held to be invalid, illegal or unenforceable, that is not itself
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby.

18. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such State without giving
effect to the principles of conflicts of laws. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction and venue of the courts of the
State of Delaware for all purposes in connection with any Proceeding which
arises out of or relates to this Agreement and agree that any Proceeding
instituted under this Agreement shall be commenced, prosecuted and continued
only in the courts of the State of Delaware.

19. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

20. Notices. All notices, demands, and other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid,
(b) upon delivery, if delivered by hand, (c) one (1) business day after the
business day of deposit with Federal Express or similar, nationally recognized
overnight courier, freight prepaid, or (d) one (1) business day after the
business day of delivery by confirmed facsimile transmission, if deliverable by
facsimile transmission, with copy by other means permitted hereunder, and
addressed, if to Indemnitee, to the Indemnitee’s address or facsimile number (as
applicable) as set forth beneath the Indemnitee’s signature to this Agreement,
or, if to the Company, at the address or facsimile number (as applicable) of its
principal corporate offices (attention: Secretary), or at such other address or
facsimile number (as applicable) as such party may designate to the other
parties hereto by a notice duly given in accordance with this Section 20.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day first set forth above.

 

INDEMNITEE:     TAYLOR CAPITAL GROUP, INC.

 

    By:  

 

Signature     Name:       Title:   Name:       Address:       Fax No.:      

 

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EXHIBIT J

FORM OF FIC WARRANT

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES ACT OF ANY STATE. THIS WARRANT MAY NOT BE
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THIS
WARRANT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH STATE OR OTHER
LAWS AS MAY BE APPLICABLE, OR RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.

TAYLOR CAPITAL GROUP, INC.

Incorporated Under the Laws of the State of Delaware

STOCK PURCHASE WARRANT

 

Warrant No. WF-               Original Issue Date: September     , 2008

THIS CERTIFIES THAT, for value received, FINANCIAL INVESTMENTS CORPORATION, or
its assigns (the “Holder”), is entitled to subscribe for and purchase during the
period specified in Section 1 hereof 500,000 fully paid and non-assessable
shares of Common Stock, $.01 par value (“Common Stock”), of TAYLOR CAPITAL
GROUP, INC., a Delaware corporation (the “Company”), at a per share price equal
to the Warrant Price, subject to the provisions and upon the terms and
conditions hereinafter set forth. Capitalized terms used herein, but not
otherwise defined, shall have meanings provided in Section 10 of this Warrant.

1. Duration. The right to subscribe for and purchase shares of Common Stock
represented hereby shall commence on the date on which Stockholder Approval is
received, and shall expire at 5:00 p.m., Chicago time, on the tenth anniversary
of the Original Issue Date specified above (the “Expiration Date”); provided,
that if Stockholder Approval is not obtained on or prior to December 31, 2008
the Expiration Date shall be extended by the number of days after December 31,
2008 that Stockholder Approval is obtained; provided, further, that if the
Expiration Date would otherwise occur on a day on which banking institutions are
required or authorized by law to close in Chicago, Illinois (a “Bank Holiday”),
then the Expiration Date shall be the next succeeding day which shall not be a
Bank Holiday. From and after the Expiration Date, this Warrant shall be null,
void and of no further force or effect.

2. Method of Exercise; Payment; Issuance of New Warrant.

(a) The holder hereof may exercise this Warrant, in whole or in part, at the
times and subject to the conditions set forth in Section 1 hereof, by the
surrender of this Warrant (with the subscription form attached hereto duly
executed) at the principal office of the Company, together with payment in the
aggregate amount equal to the Warrant Price multiplied by the number of shares
of Common Stock being purchased. At the option of Holder, payment of the Warrant
Price may be made either by (i) in cash, by wire transfer of immediately
available United States

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federal funds or by bank certified, treasurer’s or cashier’s check payable to
the order of the Company, (ii) by cashless exercise in accordance with
Section 2(b), or (iii) by any combination of the foregoing methods.

(b) In lieu of cash exercising this Warrant, the Holder may elect to receive
shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election, in which event the Company shall issue to
the holder hereof a number of shares of Common Stock computed using the
following formula:

 

 

Y (A - B)

   X =   A   

 

Where X    —    The number of shares of Common Stock to be received upon such
cashless exercise of this Warrant pursuant to this Section 2(b). Y    —    The
total number of shares for which this Warrant is exercised pursuant to such
cashless exercise. A    —    The Market Value (as defined below) of one share of
Common Stock. B    —    The Exercise Price (as adjusted to the date of such
calculations).

Any reference in this Warrant to “exercise” of this Warrant, and the use of the
term “exercise” herein, shall be deemed to include, without limitation, any
cashless exercise pursuant to this Section 2(b).

(c) In the event of any exercise of the rights represented by this Warrant in
accordance with Section 2(a), (i) stock certificates for the shares of Common
Stock so purchased shall be delivered to the Holder, and, in the event the
Warrant has not been exercised in full, a new Warrant representing the number of
shares with respect to which this Warrant shall not then have been exercised
shall also be delivered to the Holder, and (ii) stock certificates for the
shares of Common Stock so purchased shall be dated the date of exercise of this
Warrant (with the required payment of the aggregate Warrant Price unless payable
by cashless exercise pursuant to Section 2(b)), and the Holder exercising this
Warrant shall be deemed for all purposes to be the holder of the shares of
Common Stock so purchased as of the date of such exercise (with the required
payment of the aggregate Warrant Price unless payable by cashless exercise in
accordance with Section 2(b)). Such stock certificates (and new Warrant, if
applicable) shall be delivered to the holder hereof within a reasonable time,
not exceeding five Business Days, after this Warrant shall have been so
exercised. Each stock certificate so delivered shall be in such denominations as
may be requested by the Holder and shall be registered in the name of the Holder
or such other name (upon compliance with the transfer requirements hereinafter
set forth) as shall be designated by said Holder. The Company shall pay all
taxes and other expenses and charges payable in connection with the preparation,
execution and delivery of stock certificates (and new Warrants, if applicable)
pursuant to this paragraph, except that, in case such stock certificates shall
be registered in a name or names other than the Holder or its nominee, funds
sufficient to pay all stock transfer taxes which shall be payable in connection
with the execution and delivery of such stock certificates shall be paid by the
Holder to the Company at the time of the exercise of this Warrant.

 

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(d) Notwithstanding any other provision hereof, if any exercise of any portion
of a Warrant is made in connection with a registered public offering or the sale
of the Company (regardless of how structured), such exercise may be conditioned,
at the election of the Holder, upon the consummation of such public offering or
sale of the Company, in which case such exercise shall not be deemed to be
effective until immediately prior to the consummation of such transaction.

(e) If a fractional share of Common Stock would be issuable upon exercise of
this Warrant, the Company shall, as soon as reasonably practicable after the
date of exercise, deliver to the Holder a check payable to the Holder, in lieu
of such fractional share, in an amount equal to the Market Value of such
fractional share of Common Stock.

3. Adjustment of Warrant Price and Number of Shares.

(a) The Warrant Price and the number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be subject to adjustment from time to time
upon the happening of certain events occurring after the original issuance date,
as follows:

(i) Reclassification, Consolidation or Merger. In case of any reclassification
or change of outstanding Common Stock issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), or in
case of any consolidation or merger of the Company with or into another Company
(other than a merger with another corporation in which the Company is the
surviving corporation and which does not result in any reclassification or
change other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination of outstanding Common Stock issuable upon such conversion) the
rights of the holders of this Warrant shall be adjusted in the manner described
below:

(1) In the event that the Company is the surviving corporation, the Warrant
shall, without payment of additional consideration therefor, be deemed modified
so as to provide that upon exercise thereof the holder of this Warrant shall
procure, in lieu of each share of Common Stock theretofore issuable upon such
exercise, the kind and amount of shares of stock, other securities, money and
property receivable upon such reclassification, change, consolidation or merger
by the holder of each share of Common Stock issuable upon such exercise had
exercise occurred immediately prior to such reclassification, change,
consolidation or merger. This Warrant (as adjusted) shall be deemed to provide
for further adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 3. The provisions of
this clause (1) shall similarly apply to successive reclassifications, changes,
consolidations and mergers.

(2) In the event that the Company is not the surviving entity, the surviving
entity shall, without payment of any additional consideration therefor, issue
new Warrants, providing that upon exercise thereof the holder thereof shall
procure in lieu of each share of Common Stock theretofore issuable upon exercise
of this Warrant the kind and amount of shares of stock, other securities, money
and property receivable upon such reclassification, change, consolidation or
merger by the holder of each share of Common Stock issuable upon

 

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exercise of this Warrant had such exercise occurred immediately prior to such
reclassification, change, consolidation or merger. Such new Warrants shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 3. The provisions of
this clause (2) shall similarly apply to successive reclassifications, changes,
consolidations and mergers. The Company shall not enter into any transaction
subject to the provisions of this Section 3(a)(i)(2) unless the surviving entity
in such transaction agrees in writing to issue new Warrants in accordance with
the terms and conditions of this Section 3(a)(i)(2) and comply with the terms
and conditions of such new Warrants.

(ii) Subdivision or Combination of Shares. If the Company, at any time while any
of this Warrant is outstanding, shall subdivide or combine its Common Stock, the
Warrant Price shall be proportionately reduced, in case of subdivision of
shares, as of the effective date of such subdivision, or shall be
proportionately increased, in the case of combination of shares, as of the
effective date of such combination. In the event that a record date is set with
respect to any such subdivision, and this Warrant is exercised after such record
date but prior to the effective date of such subdivision, upon the effectiveness
of such subdivision, the Company shall issue the Holder additional shares of
Common Stock as if the Common Stock issued upon such exercise of the Warrant
were outstanding on the record date with respect to such subdivision, without
the payment of any additional consideration.

(iii) Certain Dividends and Distributions. If the Company, at any time while any
of this Warrant is outstanding, shall:

(1) Stock Dividends. Pay a dividend payable in, or make any other distribution
of Common Stock, the Warrant Price shall be adjusted, as of the date such
payment or dividend or other distribution, to that price determined by
multiplying the Warrant Price by a fraction (1) the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to such
dividend or distribution and (2) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend or
distribution (plus in the event that the Company paid cash for fractional
shares, the number of additional shares which would have been outstanding had
the Company issued such fractional shares in connection with such dividend or
distribution); provided that in the event that a record date is set with respect
to any such dividend and distribution, and this Warrant is exercised after such
record date but prior to the payment or other distribution of such dividend or
other distribution, upon such payment or other distribution, the Company shall
issue the Holder additional shares of Common Stock as if the Common Stock issued
upon such exercise of the Warrant were outstanding on the record date with
respect to such dividend or other distribution, without the payment of any
additional consideration; or

(2) Liquidating Dividends, etc. Make a distribution of its property to the
holders of its Common Stock as a dividend in liquidation or partial liquidation
or by way of return of capital or other than as a dividend payable out of funds
legally available for dividends under the laws of the State of Delaware, the
holders of this Warrant shall, upon exercise hereof, be entitled to receive, in
addition to the number of shares of Common Stock receivable hereupon, and
without payment of any consideration therefor, a sum equal to the amount of such
property as would have been payable to them as owners of that number of shares
of Common Stock of the Company receivable upon such exercise, had they been the
holders of record of such Common Stock on the record date for such distribution;
and an appropriate provision therefor shall be made a part of any such
distribution.

 

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(3) Purchase Rights. If at any time the Company grants, issues or sells any
options, warrants, convertible securities or other rights to purchase stock,
warrants, options, securities or other property pro rata to the record holders
of Common Stock (the “Purchase Rights”), then the Holder of this Warrant shall
be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such Holder could have acquired if such Holder
had held the number of shares of Common Stock acquirable upon complete exercise
of this Warrant immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights.

(iv) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price
pursuant to any provision of this Section 3(a), the number of shares of Common
Stock issuable upon exercise hereof shall be adjusted, to the nearest one
hundredth of a whole share, to the product obtained by multiplying the number of
shares issuable upon exercise hereof immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the Warrant Price
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price immediately thereafter.

(b) Notice of Adjustments. Whenever any Warrant Price shall be adjusted pursuant
to Section 3 hereof, the Company shall make a certificate signed by its
President or a Vice President and by its Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Price after giving
effect to such adjustment, and shall cause copies of such certificate to be
delivered (by first-class mail, postage prepaid) or facsimile to the holder of
this Warrant at its address or facsimile number shown on the books of the
Company. The Company shall make such certificate and deliver it to each Holder
promptly after each adjustment.

(c) Default in Obligations Regarding Par Value. If the Company shall default in
its obligation pursuant to the last sentence of Section 4(a) hereof such that
the par value per share of Common Stock would be greater than the Warrant Price
that, absent the limitation contained in the last sentence of Section 4(a),
would have been in effect pursuant to this Section 3, then the Warrant Price
shall be an amount equal to the par value per share of Common Stock but the
number of shares the holder of this Warrant shall be entitled to purchase shall
be such greater number of shares of Common Stock as would have resulted from the
Warrant Price that, absent the limitation contained in the last sentence of
Section 4(a), would have been in effect pursuant to this Section 3. The
foregoing adjustment shall not constitute a waiver of any claim arising against
the Company by reason of its default under the agreement contained in the last
sentence of Section 4(a) of this Warrant.

 

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4. Covenants.

(a) The Company covenants and agrees that all shares of Common Stock issued upon
exercise of this Warrant will, upon issuance, be fully paid and nonassessable
and free from preemptive rights and any liens and charges with respect to the
issuance thereof. The Company further covenants and agrees that during the
period within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized, and reserved for the purpose of issue
upon exercise of the purchase rights evidenced by this Warrant, a sufficient
number of shares of Common to provide for the exercise in full of such purchase
rights (including any and all shares as to which the right to acquire such
shares has not been forfeited pursuant to Section 1 hereof). Furthermore, and
without limiting the generality of the foregoing, the Company covenants and
agrees that it will from time to time take all such action as may be required to
assure that the par value per share of Common Stock is at all times equal to or
less than the effective Warrant Price.

(b) The Company agrees that it shall not close its books against the transfer of
this Warrant or of any shares of Common Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely exercise
of this Warrant.

(c) The Company shall cooperate with the Holder if the Holder is required to
make any governmental filings or obtain any governmental approvals prior to, or
in connection with, the exercise of Warrants (including making any filings
required to be made by the Company). The Company shall take all such actions as
may be reasonably necessary to ensure that all shares of Common Stock issuable
upon exercise of the Warrants may be issued in accordance with the terms and
conditions of the Warrants without violation of any applicable law or regulation
of any governmental entity or self regulatory organization or any requirement of
any securities exchange or trading system on which the shares of Common Stock
are listed or eligible for trading (except for official notice of issuance,
which (to the extent required) shall be delivered immediately by the Company
upon each such issuance).

(d) If the any securities issuable upon exercise of this Warrant are then
convertible into or exchangeable for any other stock or securities of the
Company (“Other Securities”), the Company shall, at the Holder’s option and upon
exercise of this Warrant by the Holder as provided herein, together with any
notice, statement or payment required to effect such conversion or exchange,
deliver to the Holder (or such other Person specified by such Holder) a
certificate or certificates representing the Other Securities into which the
securities issuable upon such exercise of this Warrant are convertible or
exchangeable, registered in such name or names and in such denomination or
denominations as the Holder has specified.

(e) The Company shall not by any action, including, without limitation, amending
its charter documents or through any reorganization, reclassification, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
other similar voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the rights of the Holder
against impairment. Without limiting the foregoing, the Company shall take all
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common Stock upon the
exercise of this Warrant, free and clear of all mortgages, pledges,
hypothecations, claims, charges, security interests, encumbrances, adverse

 

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claims, options, liens, put or call rights, rights of first offer or refusal,
proxies, voting rights or other restrictions or limitations of any nature
whatsoever (collectively, “Liens”), other than Liens created by the actions of
the Holder.

(f) The Company shall provide each Holder with not less than 10 days prior
written notice in the event that the Company closes its books or sets a record
date (i) with respect to either a dividend or distribution upon the Common Stock
or a subscription offer to the holders of Common Stock or (ii) for determining
rights to vote with respect to any merger, consolidation, reorganization,
restructuring or similar transaction (including, without limitation, the
dissolution or liquidation of the Company). The Company shall also provide the
Holder not less than 20 days prior written notice of the consummation of any
such transaction.

(g) The shares of Common Stock issued or issuable hereunder are subject to the
registration rights granted pursuant to that certain Registration Rights
Agreement, dated as of September __, 2008, by and among the Company, each of the
Persons listed on Exhibit A and Exhibit B thereto and the Holder (the
“Registration Rights Agreement”).

5. Transfer and Exchange.

(a) The transfer of this Warrant and all rights hereunder, in whole or in part,
is registrable at the office or agency of the Company referred to below by the
Holder, in person or by his duly authorized attorney, upon surrender of this
Warrant properly endorsed. Each taker and holder of this Warrant, by taking or
holding the same, consents and agrees that this Warrant, when endorsed in blank,
shall be deemed negotiable, and that the Holder, when this Warrant shall have
been so endorsed, may be treated by the Company and all other Persons dealing
with this Warrant as the absolute owner and holder hereof for any purpose and as
the Person entitled to exercise the rights represented by this Warrant, or to
the registration of transfer hereof on the books of the Company; and until due
presentment for registration of transfer on such books the Company may treat the
Holder as the owner and holder for all purposes, and the Company shall not be
affected by notice to the contrary.

(b) The Holder of this Warrant, by the acceptance hereof, represents that it is
acquiring this Warrant, and upon exercise hereof will acquire the Warrant and
the shares of Common Stock issuable upon exercise hereof (collectively,
including this Warrant, the “Warrant Securities”), for its own account and not
with a view towards, or for resale in connection with, the public sale or
distribution of the Warrant Securities, except pursuant to sales registered or
exempted under the Securities Act. The Holder further represents, by acceptance
hereof, that, as of this date, such Holder is an “accredited investor” as such
term is defined in Rule 501(a)(3) of Regulation D promulgated by the Securities
and Exchange Commission under the Securities Act (an “Accredited Investor”). The
delivery of this Warrant for exercise shall constitute confirmation at such time
by the Holder of the representations concerning the Warrant Securities set forth
in the first two sentences of this Section 5(b), unless contemporaneous with the
delivery of this Warrant for exercise, the Holder notifies the Company in
writing that it is not making such representations (a “Representation Notice”).
If the Holder delivers a Representation Notice in connection with an exercise,
it shall be a condition to such Holder’s exercise of this Warrant and the
Company’s obligations set forth in Section 2 in connection with such exercise,
that the Company receive such other representations as the Company considers

 

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reasonably necessary to assure the Company that the issuance of its securities
upon exercise of this Warrant shall not violate any United States or state
securities laws, and the time periods for the Company’s compliance with its
obligations set forth in Section 2 shall be tolled until such Holder provides
the Company with such other representations.

(c) The Holder, by acceptance of this Warrant, understands that the Warrant
Securities are characterized as “restricted securities” under the federal
securities laws inasmuch as they are being or will be acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations neither this Warrant nor the shares of Common Stock
issuable upon its exercise may be resold without registration under the
Securities Act or under certain other limited circumstances. The Holder further
agrees, by acceptance of this Warrant that it will not offer or sell this
Warrant or any shares of Common Stock issued upon exercise hereof in the absence
of an effective registration statement for the Warrant or such shares of Common
Stock, as applicable, under the Securities Act and such state or other laws as
may be applicable, or receipt by the Company of a written opinion of counsel
(provided that such counsel, and the form and substance of such opinion are
reasonably satisfactory to the Company) that such registration is not required;
provided, however that no such opinion shall be required in connection with
(i) a transaction pursuant to Rule 144 in which the Holder provides the Company
with certifications reasonably requested by the Company regarding compliance
with the terms and provisions of Rule 144 or (ii) a distribution of any Warrant
Securities to an Affiliate of the Holder, so long as such Affiliate does not pay
any consideration in connection with such distribution (other than issuance of
equity interests in such Affiliate) and the Holder provides the Company with
certifications reasonably requested by the Company in connection therewith.
Furthermore, it is agreed that each Warrant and any shares of Common Stock will
include the appropriate variant of the following legend:

[THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE HAVE] [THIS WARRANT HAS] NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES ACT OF ANY STATE. [THE SHARES][THIS WARRANT] MAY NOT BE OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND SUCH STATE OR OTHER LAWS AS MAY BE
APPLICABLE, OR RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

The Holder of this Warrant and/or any Common Stock issued upon exercise hereof
shall be entitled to receive, without expense to such Holder, a new certificate
or Warrant, as the case may be, not bearing the above restrictive legend if
(1) the Warrant Securities represented thereby shall have been effectively
registered under the Securities Act and sold by the Holder thereof in accordance
with such registration, (2) such Warrant Securities shall have been sold without
registration under the Securities Act in compliance with Rule 144, as certified
in writing by the Holder to the Company, or (3) the Company is reasonably
satisfied that the Holder of such Warrant Securities shall, in accordance with
the terms of Rule 144, be entitled to sell such Warrant Securities pursuant
thereto without any restriction or limitation and without satisfaction of any
current public information requirement thereunder.

 

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(d) Register. The Company shall maintain, at the principal office of the
Company, a register for the Warrants, in which the Company shall record the name
and address of the Person in whose name a Warrant has been issued, as well as
the name and address of each transferee and each prior owner of such Warrant.
Within 10 days after the Holder shall by written notice request the same, the
Company will deliver to such Holder a certificate, signed by one of its
officers, listing the name and address of every other Holder of this Warrant, as
such information appears in said register at the close of business on the day
before such certificate is signed.

(e) Warrants Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the office or agency
of the Company referred to in paragraph 5(d), for new Warrants of like tenor
representing in the aggregate the right to subscribe for and purchase the number
of shares which may be subscribed for and purchased hereunder, each of such new
Warrants to represent the right to subscribe for and purchase such number of
shares as shall be designated by the Holder at the time of such surrender.

(f) Cancellation; Payment of Expenses. Upon the surrender of this Warrant in
connection with any exchange, transfer or replacement, this Warrant shall be
promptly cancelled by the Company. The Company shall pay all taxes (other than
transfer taxes) and all other expenses and charges payable in connection with
the preparation, execution and delivery of Warrants.

6. Notices. All notices, requests and other communications required or permitted
to be given or delivered to the Company or the holders of Warrants shall be in
writing, and shall be deemed properly given if hand delivered or sent by
overnight courier with adequate evidence of delivery or sent by registered or
certified mail, return receipt requested and, if to a Warrant holder, at such
Warrant holder’s address as shown on the books of the Company or its transfer
agent, and if to the Company at:

Taylor Capital Group, Inc.

9550 West Higgins Road

Rosemont, IL 60018

Attention: Chief Financial Officer

With a copy (for informational purposes only) to:

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661

Telephone:   (312) 902-5200 Facsimile:   (312) 902-1061 Attention:   Jeffrey R.
Patt, Esq.

or such other addresses or Persons as the recipient shall have designated to the
sender by written notice given in accordance with this Section. Any notice,
request or other communication hereunder shall be deemed given when delivered in
person, on the next business day after being sent by overnight courier, or on
the second business day after being sent by registered or certified mail.

 

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7. Governing Law. This Warrant shall be construed in accordance with and
governed by the laws of the State of Illinois without regard to the principles
of conflicts of laws, except as to matters of corporate law which shall be
governed by the General Corporation Law of the State of Delaware, as then in
effect.

8. Remedies and Limitation of Liability.

(a) The Company stipulates that the remedies at law of the Holder in the event
of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be
adequate, and that such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.

(b) No provision hereof, in the absence of affirmative action by the Holder to
purchase Common Stock upon the exercise of this Warrant, and no enumeration of
the rights or privileges of the Holder shall give rise to any liability of a
Holder for the Warrant Price or any other amounts.

9. Miscellaneous.

(a) Amendments. The Warrants and any provision hereof may be amended or waived
only by an instrument in writing signed by the holders of Warrants representing
the right to purchase a majority of the shares of Common issuable upon full
exercise of all then outstanding Warrants (the “Majority Holders”), and, if it
is to be bound thereby, by the Company; and each Holder shall be bound by any
such amendment or waiver so approved by the Majority Holders.

(b) Descriptive Headings. The descriptive headings of the several paragraphs of
this Warrant are inserted for purposes of reference only, and shall not affect
the meaning or construction of any of the provisions hereof.

10. Definitions. For the purposes of this Warrant the following terms have the
following meanings:

“Closing Price” shall mean, with respect to a share of Common Stock, the closing
sale price (or if no closing sale price is reported, the last reported sale
price) for such security on the Nasdaq Global Select Market (or any successor
thereto) as reported by Bloomberg Financial Markets (“Bloomberg”), or if the
Nasdaq Global Select Market is not the principal trading market for such
security, the closing sale price (or if no closing sale price is reported, the
last reported sale price) of such security on the principal securities exchange
or trading market where such security is listed or traded, as reported by
Bloomberg, or if the Common Stock is not listed or traded on any national
securities exchange or trading market, then the last reported sale price of the
Common Stock at 4:00 p.m., New York City time, in the over-the-counter market on
the electronic bulletin board as reported by Bloomberg, or, if no such sale
price is reported for such security by Bloomberg, the average of the bid prices
at 4:00 p.m., New York City time, of any

 

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market makers for the Common Stock as reported on the domestic over the counter
market by the National Quotation Bureau, Inc. or any similar successor
organization. If the Closing Price cannot be calculated for such security on any
day (either because the Common Stock is listed on any domestic securities
exchange or quoted on the domestic over the counter market, or otherwise), the
Closing Price of such security on such date shall be the fair market value as
mutually determined by the Company and the Majority Holders. If the Company and
such Majority Holders are unable to agree, then the Closing Price for such day
shall be determined by a nationally recognized investment banking firm or other
nationally recognized financial advisor, unaffiliated with the Company, selected
by the Company and the Majority Holders for such purpose, taking into
consideration, among other factors, the earnings history, book value and
prospects of the Company, with the determination of such investment banking firm
or financial advisor to be final and binding, and the cost and expenses thereof
to be paid by the Company.

“Common Stock” shall mean the Company’s Common Stock, $.01 par value, and any
stock into which such stock may hereafter be changed.

“Market Value” shall mean, in respect of a share of Common Stock on any date
herein specified, the arithmetic average of the Closing Price on ten
(10) consecutive Trading Days immediately preceding such date; provided,
however, that in the event that any of the actions specified in Sections
3(a)(ii) or 3(a)(iii)(1) become effective on or after the first day of such
fifteen day period the Company, then in calculating the Market Value, the
Closing Bid Prices for all Trading Days occurring on or after the effectiveness
of such action shall be adjusted in the same manner as the Warrant Price is
adjusted pursuant to such Sections hereof.

“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization or a
government or any department or agency thereof or any other legal entity.

“Securities Act” shall mean the Securities Act of 1933, as amended prior to or
after the date hereof, or any federal statute or statutes which shall be enacted
to take the place of such Act, together with all rules and regulations
promulgated thereunder.

“Securities Purchase Agreement” means the Securities Purchase Agreement dated as
of September     , 2008 by and among the Company and each of the investors
listed on the Schedule of Buyers attached thereto.

“Stockholder Approval” shall have the meaning set forth in the Securities
Purchase Agreement.

“Trading Day” means any day on which the Common Stock is traded on its principal
market; provided that “Trading Day” shall not include any day on which the
Common Stock is scheduled to trade, or actually trades, on such exchange or
market for less than 4.5 hours.

“Warrants” shall mean this Warrant, and any Warrants issued in substitution or
replacement thereof, including without limitation, upon a permitted transfer
hereof.

“Warrant Price” shall mean $20.00 per share, subject to adjustment pursuant to
the provisions of Section 3 hereof.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and issued
on the date set forth below.

 

Dated: September     , 2008   TAYLOR CAPITAL GROUP, INC.   By:  

 

  Name:     Title:  

 

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EXHIBIT A

SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

The undersigned registered owner of the attached Warrant irrevocably exercises
such Warrant for the purchase of              Shares of Common Stock of
                             and herewith makes payment therefor, all at the
price and on the terms and conditions specified in such Warrant, and requests
that certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the name
of and delivered to                              whose address is
                             and, if such shares of Common Stock shall not
include all of the shares of Common Stock issuable as provided in such Warrant,
that a new Warrant of like tenor and date for the balance of the shares of
Common Stock issuable hereunder be delivered to the undersigned.

The Warrant Price with respect to the shares of Common Stock is being paid by:

         Wire Transfer in the amount of $            

         Bank certified, treasurer’s or cashier’s check in the amount of
$            

         Cashless exercise

 

 

 

    (Name of Registered Owner)    

 

    (Signature of Registered Owner)    

 

    (Street Address)    

 

    (City)            (State) (Zip Code)  

 

NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatsoever.

 

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EXHIBIT K

FORM OF AMENDED AND RESTATED BYLAWS

THIRD AMENDED AND RESTATED BY-LAWS

OF

TAYLOR CAPITAL GROUP, INC.

(A DELAWARE CORPORATION)

Amended and Restated             , 2008

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TABLE OF CONTENTS

 

     PAGE ARTICLE 1 EFFECTIVENESS OF BY-LAWS; CERTIFICATE OF INCORPORATION    1
    Section 1.1     Effectiveness of By-Laws    1     Section 1.2     Contents
   1     Section 1.3     Certificate in Effect    1 ARTICLE 2 MEETINGS OF
STOCKHOLDERS    1     Section 2.1     Place    1     Section 2.2     Annual
Meeting    1     Section 2.3     Special Meetings    1     Section 2.4    
Notice of Meetings    2     Section 2.5     Affidavit of Notice    2     Section
2.6     Quorum    2     Section 2.7     Voting Requirements    3     Section
2.8     Proxies and Voting    3     Section 2.9     Stockholder Proposals and
Director Nominations    4     Section 2.10   Stockholder List    8     Section
2.11   Record Date    8 ARTICLE 3 DIRECTORS    9     Section 3.1     Duties    9
    Section 3.2     Number; Election and Term of Office    9     Section 3.3    
Compensation    9     Section 3.4     Reliance on Books    9 ARTICLE 4 MEETINGS
OF THE BOARD OF DIRECTORS    10     Section 4.1     Place    10     Section
4.2     Annual Meeting    10     Section 4.3     Regular Meetings    10
    Section 4.4     Special Meetings    10     Section 4.5     Quorum; Voting   
10     Section 4.6     Action Without Meeting    11     Section 4.7    
Telephone Meetings    11     Section 4.8     Interested Directors    11
ARTICLE 5 COMMITTEES OF DIRECTORS    12     Section 5.1     Designation    12
    Section 5.2     Records of Meetings    12 ARTICLE 6 NOTICES    12
    Section 6.1     Method of Giving Notice    12     Section 6.2     Waiver of
Notice    13

 

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ARTICLE 7 OFFICERS    13     Section 7.1     In General    13     Section 7.2  
  Election of Chairman of the Board, Chief Executive Officer, President, Chief
Financial Officer, Secretary and Treasurer    13     Section 7.3     Election of
Other Officers    13     Section 7.4     Salaries    13     Section 7.5     Term
of Office    13     Section 7.6     Duties of Chairman of the Board    13
    Section 7.7     Duties of Chief Executive Officer    14     Section 7.8    
Duties of President    14     Section 7.9     Duties of Chief Financial Officer
   14     Section 7.10   Duties of Vice President    14     Section 7.11  
Duties of Secretary    14     Section 7.12   Duties of Assistant Secretary    15
    Section 7.13   Duties of Treasurer    15     Section 7.14   Duties of
Assistant Treasurer    15 ARTICLE 8 RESIGNATIONS, REMOVALS AND VACANCIES    15
    Section 8.1     Directors    15     Section 8.2     Officers    16 ARTICLE
9 CERTIFICATES OF STOCK, TRANSFERS AND RECORD DATES    17

    Section 9.1  

  Form of Certificates    17

    Section 9.2  

  Facsimile Signatures    17

    Section 9.3  

  Lost Certificates    17

    Section 9.4  

  Transfers of Shares    17

    Section 9.5  

  Transfer Agents and Registrants    18

    Section 9.6  

  Registered Stockholders    18 ARTICLE 10 INDEMNIFICATION    18     Section
10.1   Right to Indemnification    18     Section 10.2   Derivative Actions   
18     Section 10.3   Expenses    19     Section 10.4   Authorization    19
    Section 10.5   Advance Payment of Expenses    19     Section 10.6  
Non-Exclusiveness    19     Section 10.7   Insurance    20     Section 10.8  
General    20 ARTICLE 11 EXECUTION OF PAPERS    21 ARTICLE 12 FISCAL YEAR    21
ARTICLE 13 DEPOSITORIES    21 ARTICLE 14 SEAL    21

 

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ARTICLE 15 OFFICES    21

    Section 15.1  

  Registered Office    21

    Section 15.2  

  Principal Office    21 ARTICLE 16 AMENDMENTS    22

 

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TAYLOR CAPITAL GROUP, INC.

ARTICLE 1

EFFECTIVENESS OF BY-LAWS; CERTIFICATE OF INCORPORATION

Section 1.1 Effectiveness of By-Laws. These By-laws shall become effective, and
shall supersede the Second Amended and Restated By-laws of the corporation dated
August 17, 2005, immediately after the Third Amended and Restated Certificate of
Incorporation of the corporation shall have been filed with the Secretary of
State of the State of Delaware.

Section 1.2 Contents. These By-laws, the powers of the corporation and of its
Directors and stockholders, and all matters concerning the conduct and
regulation of the business of the corporation, shall be subject to such
provisions in regard thereto, if any, as are set forth in said Certificate of
Incorporation. To the extent any provision of these By-laws conflicts or is
inconsistent with any provision of the Certificate of Incorporation, the
provisions of the Certificate of Incorporation shall control.

Section 1.3 Certificate in Effect. All references in these By-laws to the
Certificate of Incorporation shall be construed to mean the Certificate of
Incorporation of the corporation as from time to time amended and restated,
including (unless the context shall otherwise require) all certificates and any
agreement of consolidation or merger filed pursuant to the Delaware General
Corporation Law, as amended (the “DGCL”).

ARTICLE 2

MEETINGS OF STOCKHOLDERS

Section 2.1 Place. All meetings of the stockholders may be held at such place,
either within or without the State of Delaware, as shall be designated from time
to time by the Board of Directors, the Chairman of the Board or the President
and stated in the notice of the meeting or in any duly executed waiver of notice
thereof. Notwithstanding the foregoing, the Board of Directors may, in its sole
discretion, determine that the meeting shall not be held in any place, but may
instead be held solely by means of remote communication, upon such guidelines as
the Board of Directors shall determine, provided that such guidelines are
consistent with Section 211 of the DGCL.

Section 2.2 Annual Meeting. The annual meeting of the stockholders shall be held
each year at such date and time as shall be designated from time to time by the
Board of Directors, and stated in the notice or waiver of notice of the meeting.

Section 2.3 Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by the DGCL, the Certificate of
Incorporation or these By-laws, may be called by the President, the Chairman of
the Board, or a majority of the

 

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Board of Directors then in office. Such request shall state the purpose or
purposes of the proposed meeting. In addition, the holders of at least
thirty-five percent (35%) of the total voting power of the outstanding stock
entitled to vote generally in the election of Directors shall be entitled to
request in a writing to the Board of Directors that the corporation convene a
special meeting of stockholders for any proper purpose, which purpose shall be
stated with specificity in such notice to the Board of Directors (a “Stockholder
Request”). If at any time a Stockholder Request has been properly submitted to
the Board of Directors, (x) the corporation shall convene a special meeting of
stockholders within ninety (90) days of receipt of such Stockholder Request, and
(y) the Board of Directors shall not be permitted to authorize the issuance of
any shares of capital stock, other than upon the unanimous consent of the Board
of Directors, from the date of its receipt of such Stockholder Request until the
earlier of (i) the first business day following a special meeting of
stockholders convened pursuant to such Stockholder Request, or (ii) 180 days
following the receipt of the Stockholder Request by the Board of Directors
(unless the failure to convene a special meeting pursuant to such Stockholder
Request is caused by any action or inaction on behalf of the Board of
Directors). In the event the Board of Directors fails to convene a special
meeting of stockholders within ninety (90) days of receipt of a properly
submitted Stockholder Request, the stockholder(s) who submitted such Stockholder
Request shall have the right to convene a special meeting within the following
ninety (90) days; provided such stockholder(s) provide the Board of Directors
and all other stockholders with notice no less than ten (10) nor more than sixty
(60) days in advance of such meeting, with such notice to include the date, time
and the location of such meeting, which shall be at a location in Chicago,
Illinois.

Section 2.4 Notice of Meetings. A notice of all meetings of stockholders stating
the place, date and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the special meeting is called, shall be given
by the corporation either by United States mail, by facsimile or other means of
electronic transmission to each stockholder entitled to vote at such meeting.
Except as otherwise required by the DGCL, such notice shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting. If
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the records
of the corporation. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice to the stockholders from
the corporation.

Section 2.5 Affidavit of Notice. An affidavit of the Secretary or an Assistant
Secretary or the transfer agent of the corporation that notice of a stockholders
meeting has been given shall, in the absence of fraud, be prima facie evidence
of the facts stated therein.

Section 2.6 Quorum. The holders of thirty-five percent (35%) of the stock
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at any meeting of stockholders for the
transaction of business, except as otherwise provided by statute or by the
Certificate of Incorporation or by these By-laws. If a quorum shall not be
present or represented by proxy at any meeting of stockholders, the stockholders
entitled to vote thereat present in person or represented by proxy (by vote of a
majority of shares represented), the Chairman of the Board or the President,
shall have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, except as hereinafter provided, until a quorum
shall be present or represented. At such adjourned

 

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meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.

Section 2.7 Voting Requirements. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy at such meeting shall decide any question brought
before such meeting, unless the question is one upon which by express provision
of any applicable statute, the Certificate of Incorporation or these By-laws, a
different vote is required, in which case such express provision shall govern
and control the decision of such question. Notwithstanding the foregoing, all
elections of directors shall be determined by a plurality of the votes cast.

Section 2.8 Proxies and Voting. Unless otherwise provided by the DGCL, the
Certificate of Incorporation or these By-laws, each stockholder shall at every
meeting of the stockholders be entitled to one vote in person or by proxy for
each share of the capital stock having voting power held by such stockholder,
but no proxy shall be voted on after three years from its date, unless the proxy
provides for a longer period. At any meeting of the stockholders, every
stockholder entitled to vote may vote in person or by proxy authorized by an
instrument in writing or by a transmission permitted by law filed in accordance
with the procedure established for the meeting. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this paragraph may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used; provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held. Shares of the capital
stock of the corporation owned by the corporation shall not be voted, directly
or indirectly.

If shares or other securities having voting power stand of record in the names
of two or more persons, whether fiduciaries, members of a partnership, joint
tenants, tenants in common, tenants by the entirety or otherwise, or if two or
more persons have the same fiduciary relationship respecting the same shares,
unless the Secretary of the corporation is given written notice to the contrary
and is furnished with a copy of the instrument or order appointing them or
creating the relationship wherein it is so provided, their acts with respect to
voting shall have the following effect:

1. If only one votes, his act binds all;

2. If more than one vote, the act of the majority so voting binds all;

3. If more than one vote, but the vote is evenly split on any particular matter,
each faction may vote the securities in question proportionally, or any person
voting the shares, or a beneficiary, if any, may apply to the Court of Chancery
or such other court as may have jurisdiction to appoint an additional person to
act with the persons so voting the shares, which shall then be voted as

 

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determined by a majority of such persons and the person appointed by the Court.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even split for the purpose of this subsection shall be
a majority or even split in interest.

Section 2.9 Stockholder Proposals and Director Nominations. Nominations of
persons for election to the Board of Directors and the proposal of business to
be transacted by the stockholders at an annual meeting of stockholders may be
made (i) by, or at the direction of, the Board of Directors, or (ii) by any
stockholder of record of the corporation who was a stockholder of record at the
time of the giving of the notice provided for in the following paragraph who is
entitled to vote at the meeting and who has complied with the notice procedures
set forth in this Section 2.9.

For nominations or other business to be properly brought before an annual
meeting by a stockholder pursuant to clause (ii) of the foregoing paragraph,
(a) the stockholder must have given timely notice thereof in writing to the
Secretary of the corporation at the principal executive offices of the
corporation, (b) such business must be a proper matter for stockholder action
under the DGCL, (c) if the stockholder, or the beneficial owner on whose behalf
any such proposal or nomination is made, has provided the corporation with a
Solicitation Notice, as that term is defined in this Section 2.9, such
stockholder or beneficial owner must, in the case of a proposal, have delivered
a proxy statement and form of proxy to holders of at least the percentage of the
voting power of the corporation’s voting shares required under applicable law to
carry any such proposal, or, in the case of a nomination or nominations, have
delivered a proxy statement and form of proxy to holders of a percentage of the
corporation’s voting shares reasonably believed by such stockholder or
beneficial holder to be sufficient to elect the nominee or nominees proposed to
be nominated by such stockholder (the number of voting shares required to carry
the proposal or elect the nominees being the “Required Number”), and must, in
either case, have included in such materials the Solicitation Notice, and (d) if
no Solicitation Notice relating thereto has been timely provided pursuant to
this Section 2.9, the stockholder or beneficial owner proposing such business or
nomination must not have solicited proxies for a number of shares equal to or
greater than the Required Number. With respect to an annual meeting of
stockholders, in order to be timely, a stockholder’s notice shall be delivered
to, or mailed and received by, the Secretary of the corporation at the principal
executive offices of the Corporation not more than ninety (90) nor less than
sixty (60) days prior to the first anniversary (the “Anniversary”) of the date
on which the corporation first mailed its proxy materials for the preceding
year’s annual meeting of stockholders; provided, however, that if the date of
the annual meeting is advanced more than thirty (30) days prior to, or delayed
by more than sixty (60) days after, the anniversary of the preceding year’s
annual meeting, notice by the stockholder to be timely must be so delivered not
later than the close of business on the later of (i) the ninetieth (90th) day
prior to such annual meeting, or (ii) the tenth (10th) day following the day on
which public announcement (in the manner provided herein) of the date of such
annual meeting is first made. To the fullest extent permitted by law, in no
event shall any adjournment or postponement of an annual meeting or the
announcement thereof commence a new time period for the giving of a
stockholder’s notice as described herein. Nominations by stockholders of persons
for election to the Board of Directors at a special meeting of stockholders at
which directors are to be elected may be made if the stockholder’s notice
required by Section 2.4 shall be delivered to the Secretary of the corporation
at the principal executive offices of the

 

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corporation not later than the close of business on the later of the ninetieth
(90th) day prior to such special meeting and the tenth (10th) day following the
day on which public disclosure is first made of the date of the special meeting
and of the nominees proposed by the Board of Directors to be elected at such
meeting.

Any stockholder’s notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director, all
information relating to such person as would be required to be disclosed in
solicitations of proxies for the election of such nominee as a director pursuant
to Regulation 14A under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and such person’s written consent to serve as a director if
elected; (b) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of such business, the reasons for
conducting such business at the meeting, a description of any material interest
in such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made, and a description of all agreements, arrangements,
understandings between such stockholder and beneficial owner, if any, and any
other person or persons (including their names) in connection with the proposal
of such business by such stockholder; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (i) the name and address of such stockholder, as they appear
on the corporation’s books, and of such beneficial owner, (ii) (A) the class and
number of shares of the corporation that are owned beneficially and of record by
such stockholder and such beneficial owner, and (B) any option, warrant,
convertible security, stock appreciation right, or similar right with an
exercise or conversion privilege or a settlement payment or mechanism at a price
related to any class or series of shares of the corporation or with a value
derived in whole or in part from the value of any class or series of shares of
the corporation, whether or not such instrument or right shall be subject to
settlement in the underlying class or series of capital stock of the corporation
or otherwise (a “Derivative Instrument”) directly or indirectly owned
beneficially by such stockholder and any other direct or indirect opportunity to
profit or share in any profit derived from any increase or decrease in the value
of shares of the corporation, (C) any proxy, contract, arrangement,
understanding, or relationship pursuant to which such stockholder has a right to
vote any shares of any security of the corporation, (D) any short interest in
any security of the corporation (for purposes of this provision, a person shall
be deemed to have a short interest in a security if such person directly or
indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has the opportunity to profit or share in any profit derived from any
decrease in the value of the subject security), (E) any rights to dividends on
the shares of the corporation owned beneficially by such stockholder that are
separated or separable from the underlying shares of the corporation, (F) any
proportionate interest in shares of the corporation or Derivative Instruments
held, directly or indirectly, by a general or limited partnership in which such
stockholder is a general partner or, directly or indirectly, beneficially owns
an interest in a general partner, and (G) any performance-related fees (other
than an asset-based fee) that such stockholder is entitled to based on any
increase or decrease in the value of shares of the corporation or Derivative
Instruments, if any, as of the date of such notice, including without limitation
any such interests held by members of such stockholder’s immediate family
sharing the same household (which information shall be supplemented by such
stockholder and beneficial owner, if any, not later than ten (10) days after the
record date for the meeting to disclose such ownership as of the record date),
and (iii) whether either such stockholder or such beneficial owner intends to
deliver

 

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a proxy statement and form of proxy to holders of the Required Number (an
affirmative statement of such intent, a “Solicitation Notice”). At the request
of the Board of Directors, any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the corporation
(y) that information required to be set forth in a stockholder’s notice of
nomination which pertains to the nominee, as is described in clause (a) of the
preceding sentence, and (z) any other information as may be reasonably required
by the corporation to determine the eligibility of such proposed nominee to
serve as an independent director of the corporation or that could be material to
a reasonable stockholder’s understanding of the independence, or lack thereof,
of such nominee.

Notwithstanding anything in the second sentence of the second paragraph of this
Section 2.9 to the contrary, in the event that the number of directors to be
elected to the Board of Directors is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board of Directors made by the corporation at least seventy
(70) days prior to the Anniversary, a stockholder’s notice required by these
By-laws shall also be considered timely, but only with respect to nominees for
any new positions created by such increase, if it shall be delivered to the
Secretary of the corporation at the principal executive offices of the
corporation not later than the close of business on the tenth (10th) day
following the day on which such public announcement is first made by the
corporation.

Only persons nominated in accordance with the procedures set forth in this
Section 2.9 shall be eligible to be nominees to serve as directors, and only
such business shall be conducted at an annual meeting of stockholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this Section 2.9. The chair of the meeting shall have the power and the duty
to determine whether a nomination or any business proposed to be brought before
the meeting has been made in accordance with the procedures set forth in these
By-laws and, if any proposed nomination or business is not in compliance with
these By-laws, to declare that such defective proposed business or nomination
shall not be presented for stockholder action at the meeting and shall be
disregarded.

Notwithstanding the foregoing provisions of this Section 2.9, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations thereunder with respect to matters set forth herein.
Nothing in this Section 2.9 shall be deemed to affect any rights of stockholders
to request inclusion of proposals in the corporation’s proxy statement pursuant
to Rule 14a-8 under the Exchange Act.

For the purposes of these By-laws, “public announcement” shall mean disclosure
in a press release reported by the Dow Jones News Service, Associated Press or a
comparable national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.

In addition to their rights as a stockholder pursuant to the foregoing terms and
conditions of Section 2.9, (I) so long as the Taylor Family (as defined below)
beneficially owns in the aggregate twenty-five percent (25%) or more of the
total voting power of the outstanding stock entitled to vote generally in the
election of directors, the Taylor Family shall be entitled to

 

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nominate up to three (3) candidates for election to the Board of Directors at
any annual meeting of stockholders or special meeting of stockholders called for
the purpose of electing Directors, and (II) at any time at which the Taylor
Family beneficially owns in the aggregate fifteen percent (15%) or more, but
less than twenty-five percent (25%), of the total voting power of the
outstanding stock entitled to vote generally in the election of directors, the
Taylor Family shall be entitled to nominate up to two (2) candidates for
election to the Board of Directors at any annual meeting of stockholders or
special meeting of stockholders called for the purpose of electing Directors.
For purposes of this Section 2.9, the “Taylor Family” shall mean: Jeffrey W.
Taylor, Bruce W. Taylor, Iris Tark Taylor, Cindy Taylor Robinson, the spouses,
descendants, or spouses of descendants of any one or more of the foregoing
persons, any estates, trusts (including charitable remainder trusts),
custodianships or guardianships formed or to be formed primarily for the benefit
of any one or more of the foregoing persons, and any proprietorships,
partnerships, limited liability companies, foundations or corporations
controlled directly or indirectly by any one or more of the foregoing persons or
entities.

In addition to its rights as a stockholder pursuant to the foregoing terms and
conditions of Section 2.9, until the first date on which both (x) fewer than
800,000 shares of Series A Preferred (as defined in the Third Amended and
Restated Certificate of Incorporation of the corporation) are issued and
outstanding (subject to anti-dilution adjustment for stock splits, stock
dividends and the like with respect to the Series A Preferred), and (y) the
outstanding shares of Series A Preferred represent less than 10% of the total
combined voting power of all outstanding shares of all classes of capital stock
which are then entitled to vote on matters presented to a vote of the
corporation’s stockholders generally, Financial Investments Corporation (“FIC”)
shall be entitled to nominate up to two (2) candidates for election to the Board
of Directors at any annual meeting of stockholders or special meeting of
stockholders called for the purpose of electing Directors; provided, however,
that the rights granted to FIC pursuant to this paragraph shall immediately
cease upon a Change in Control of FIC. For this purpose, a “Change in Control of
FIC” shall occur on the first date on which a majority of the outstanding voting
securities of FIC are no longer beneficially owned by the Harrison I. Steans
2004 Multigenerational Trust (the “Current Registered Holder”) and Permitted
Transferees (as defined below). For purposes of this paragraph, a “Permitted
Transferee” shall mean any (a) nominee of such Current Registered Holder
(provided that such Current Registered Holder continues to have beneficial
ownership, as such term is defined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, of such voting securities of FIC), (b) a
beneficiary or trustee of such Current Registered Holder or any child,
stepchild, descendant, parent, stepparent, spouse, widow, widower, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law of any such person, and any person (other than a tenant or
employee) sharing the household of such person (the “Family Members”), (c) any
estate of a Family Member, or any trust of which any Family Member is a trustee
or any trust established by or for the benefit of one or more Family Members,
(d) any charitable organizations which qualify as exempt organizations under
Section 501(c) of the Internal Revenue Code of 1986, as amended, which is
established and controlled by one or more Family Members (a “Family Charitable
Organization”); (e) any corporation of which a majority of the voting power or a
majority of the equity interest is held, directly or indirectly, by or for the
benefit of one or more Family Members, estates or trusts described in clause
(c) above, or Family Charitable Organizations; or (f) any partnership, limited
liability company or other entity or arrangement of which a majority of the
voting interest or a majority of the economic interest is held, directly or
indirectly, by or for the benefit of one or more Family Members, estates or
trusts described in clause (c) above, or Family Charitable Organizations.

 

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Section 2.10 Stockholder List. The officer who has charge of the stock ledger of
the corporation shall prepare and, at least ten (10) days before every meeting
of stockholders, make a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, (i) on a reasonably accessible electronic
network, provided that the information required to gain access to such list is
provided with the notice of the meeting, or (ii) during ordinary business hours
at the principal place of business of the corporation. In the event that the
corporation determines to make the list available on an electronic network, the
corporation may take reasonable steps to ensure that such information is
available only to stockholders of the corporation. If the meeting is to be held
at a place, then the list shall be produced and kept at the place of the meeting
during the whole time thereof, and may be inspected by any stockholder that is
present. If the meeting is to be held solely by means of remote communication,
then the list shall also be open to the examination of any stockholder during
the whole time of the meeting on a reasonably accessible electronic network, and
the information required to access such list shall be provided with the notice
of the meeting.

Section 2.11 Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which shall not be
more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action, except in each
case as otherwise required by the DGCL. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.

If no record date is fixed by the Board of Directors:

(a) The record date for determining stockholders entitled to notice of or to
vote at a meeting of stockholders shall be at the close of business on the day
next preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held.

(b) The record date for determining stockholders entitled to receive payment of
a dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action shall be at the close of business on
the day on which the Board of Directors adopts the resolution relating thereto.

 

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ARTICLE 3

DIRECTORS

Section 3.1 Duties. The business and affairs of the corporation shall be under
the direction of, and managed by, the Board of Directors, which may exercise all
such powers of the corporation and do all such lawful acts and things as are not
required by law, the Certificate of Incorporation or these By-laws to be done by
the stockholders. Notwithstanding the foregoing, in accordance with
Section 141(a) of the DGCL, certain powers and authority of the Board of
Directors shall also be exercised by and require the further approval of the
Executive Committee in accordance with the provisions of Article FIFTH of the
Certificate of Incorporation. Directors and Executive Committee members need not
be residents of the State of Delaware or stockholders of the corporation.

Section 3.2 Number; Election and Term of Office. The number of Directors which
shall constitute the whole Board of the corporation shall be not less than
eleven (11) and not more than thirteen (13), as determined from time by
resolution adopted by the affirmative vote of a majority of the Directors in
office at the time of adoption of such resolution. In accordance with Article
FIFTH of the Certificate of Incorporation, the unanimous approval of Executive
Committee shall be required in order for the Board to amend these By-Laws to
decrease the size of the Board to fewer than eleven (11) members or increase the
size of the Board to greater than thirteen (13) members. Subject to the terms of
any series of preferred stock then outstanding, Directors shall be elected by
the corporation’s stockholders at the annual meeting of the stockholders, and
each Director elected shall hold office until the annual meeting of stockholders
in the year in which his or her term expires and until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal.

Section 3.3 Compensation. Unless otherwise restricted by the Certificate of
Incorporation or these By-laws, the Board of Directors shall have the authority
to fix the compensation of Directors. The Directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors. No such payment
shall preclude any Director from serving the corporation in any other capacity
and receiving compensation therefor. Members of the Executive Committee and any
special or standing committees of the Board of Directors may be allowed
compensation for attending meetings of such committees.

Section 3.4 Reliance on Books. A member of the Board of Directors, the Executive
Committee or a member of any committee designated by the Board of Directors
shall, to the fullest extent permitted by law, in the performance of his duties,
be fully protected in relying in good faith upon the books of account or reports
made to the corporation by any of its officers, or any other person as to
matters the Board of Directors believes are within such person’s professional or
expert confidence and who has been selected with reasonable care by or on behalf
of the corporation.

 

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ARTICLE 4

MEETINGS OF THE BOARD OF DIRECTORS

Section 4.1 Place. The Board of Directors of the corporation may hold meetings,
both regular and special, at such place or places within or without the State of
Delaware as the Board of Directors may from time to time determine, or as may be
specified or fixed in the respective notices or waivers of notice of such
meeting.

Section 4.2 Annual Meeting. The annual meeting of the Board of Directors shall
be held immediately following the annual meeting of stockholders each year or
any special meeting held in lieu thereof, or at such other time as the Board of
Directors may from time to time determine or as maybe specified or fixed in the
notices or waivers of notice of such meeting.

Section 4.3 Regular Meetings. Regular meetings of the Board of Directors may be
held without notice, except as otherwise required pursuant to Section 9.1 of
these Bylaws, at such time and at such place as shall from time to time be
determined by the Board.

Section 4.4 Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board, the Chief Executive Officer or the
President of the Corporation on at least one day’s notice to each Director,
either personally, or by mail, overnight courier, electronic mail, facsimile or
other means of electronic transmission to each director. Special meetings shall
be called by the Chairman, the Chief Executive Officer or the President in like
manner and on like notice at the written request of any two Directors unless the
Board consists of only one Director, in which case special meetings shall be
called by the Chairman of the Board, the Chief Executive Officer, the President
or the Secretary in like manner and on like notice on the written request of the
sole Director. Notice of any meeting of the Board of Directors for which a
notice is required may be waived if given by the person or persons entitled to
such notice, whether before or after the time of such meeting, and such waiver
shall be equivalent to the giving of such notice. Attendance of a Director at
any such meeting shall constitute a waiver of notice thereof, except where the
director attends a meeting for the express purpose of objecting to the
transaction of any business because such meeting is not lawfully convened.
Neither the business to be transacted at, nor the purpose of, any meeting of the
Board of Directors for which a notice is required need be specified in the
notice, or waiver of notice, of such meeting. The Chairman shall preside at all
meetings of the Board of Directors. In the absence or inability to act of the
Chairman, then the Chief Executive Officer, if then a member of the Board of
Directors, shall preside, and in his or her absence or inability to act, another
Director designated by the Board of Directors shall preside.

Section 4.5 Quorum; Voting. At all meetings of the Board, a majority of the
Directors then in office shall constitute a quorum for the transaction of
business and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the Certificate of
Incorporation or by these By-laws. Common or interested Directors may be counted
in determining the presence of a quorum at a meeting of the Board of Directors.
If a quorum shall not be present at any meeting of the Board of Directors, the
Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.

 

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Section 4.6 Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, or by facsimile, electronic mail or
other means of electronic transmission, and the writing or writings, or
electronic transmission or transmissions are filed with the minutes of
proceedings of the Board of Directors or committee. Such filings shall be in
paper form if the minutes are maintained in paper form or in electronic form if
the minutes are maintained in electronic form.

Section 4.7 Telephone Meetings. Unless otherwise restricted by the Certificate
of Incorporation or these By-laws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.

Section 4.8 Interested Directors.

(a) No contract or transaction between a corporation and one or more of its
Directors or officers, or between a corporation and any other corporation,
partnership, association, or other organization in which one or more of its
Directors or officers are Directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the Director
or officer is present at or participates in the meeting of the Board or
committee which authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose, if:

1. the material facts as to his relationship or interest and as to the contract
or transaction are disclosed or are known to the Board of Directors or the
committee, and the Board or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
Directors, even though the disinterested Directors be less than a quorum; or

2. the material facts as to his relationship or interest and as to the contract
or transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders; or

3. the contract or transaction is fair as to the corporation as of the time it
is authorized, approved or ratified by the Board of Directors, a committee or
the stockholders.

(b) Interested Directors may be counted in determining the presence of a quorum
at a meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.

 

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ARTICLE 5

COMMITTEES OF DIRECTORS

Section 5.1 Designation.

(a) The Board of Directors may by resolution passed by a majority of the whole
Board, designate one or more committees, each committee to consist of one or
more of the Directors of the corporation or such other persons who are directors
of Cole Taylor Bank (the “Bank”). The Board may designate one or more Directors
or directors of the Bank as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee.

(b) In the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

(c) Subject to applicable limitations contained in Article FIFTH of the
Certificate of Incorporation, any such committee, to the extent provided in the
resolution of the Board of Directors designating the committee, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation, to the extent such
powers and authority are permitted by the DGCL as such may be amended from time
to time. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.

Section 5.2 Records of Meetings. Each committee shall keep regular minutes of
its meetings and report the same to the Board of Directors when required.

ARTICLE 6

NOTICES

Section 6.1 Method of Giving Notice. Whenever, under any provision of the DGCL
or of the Certificate of Incorporation or of these By-laws, notice is required
to be given to any Director or stockholder, such notice shall be given in
writing by the Secretary or the person or persons calling the meeting by leaving
such notice with such Director or stockholder at his residence or usual place of
business or by mailing it addressed to such Director or stockholder, at his
address as it appears on the records of the corporation, with postage thereon
prepaid, and such notice shall be deemed to be given at the time when the same
shall be personally delivered or deposited in the United States mail. Notice to
Directors may also be given by overnight courier, email or facsimile. Without
limiting the manner by which notice otherwise may be given effectively to
stockholders, any notice to stockholders by the corporation under any provision
of these By-laws, the Certificate of Incorporation or by law shall be effective
if given by a form of electronic transmission in accordance with applicable law.

 

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Section 6.2 Waiver of Notice. Whenever any notice is required to be given under
any provision of the DGCL or of the Certificate of Incorporation or of these
By-laws, a waiver thereof given by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting for
the express purpose of objecting at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, Directors or members of a
committee of Directors need be specified in any written waiver of notice.

ARTICLE 7

OFFICERS

Section 7.1 In General. The officers of the corporation shall be chosen by the
Board of Directors and shall include a Chairman of the Board, a Chief Executive
Officer, a President, a Chief Financial Officer, a Secretary and a Treasurer.
The Board of Directors may also choose one or more Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Such officer selection authority of the
Board of Directors shall, except in the case of the selection of the Chief
Executive Officer and President, be subject to the authorization and approval of
the Executive Committee pursuant to Article FIFTH of the Certificate of
Incorporation, as applicable. Any number of offices may be held by the same
person, unless the Certificate of Incorporation or these By-laws otherwise
provide.

Section 7.2 Election of Chairman of the Board, Chief Executive Officer,
President, Chief Financial Officer, Secretary and Treasurer. The Board of
Directors at its first meeting after each annual meeting of stockholders shall
choose a Chairman of the Board, a Chief Executive Officer, a President, a Chief
Financial Officer, a Secretary and a Treasurer.

Section 7.3 Election of Other Officers. Subject to the authorization and
approval of the Executive Committee pursuant to Article FIFTH of the Certificate
of Incorporation, as applicable, the Board of Directors may appoint such other
officers and agents as it shall deem appropriate who shall hold their offices
for such terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the Board.

Section 7.4 Salaries. The salaries of all officers and agents of the corporation
may be fixed by the Board of Directors.

Section 7.5 Term of Office. The officers of the corporation shall hold office
until their successors are elected and qualified or until their earlier
resignation or removal. Any officer elected or appointed by the Board of
Directors may be removed at any time in the manner specified in Section 8.2.

Section 7.6 Duties of Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors, shall
advise and counsel with the President shall assume such other duties as from
time to time may be assigned to him by the Board of Directors.

 

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Section 7.7 Duties of Chief Executive Officer. The Chief Executive Officer shall
be the principal executive officer of the corporation and shall, in general,
supervise and control all of the business and affairs of the corporation, unless
otherwise provided by the Board of Directors. In the absence of the Chairman of
the Board, the Chief Executive Officer shall preside at all meetings of the
stockholders and, if he or she is a director, at all meetings of the Board of
Directors, and shall see that orders and resolutions of the Board of Directors
are carried into effect. The Chief Executive Officer may sign bonds, mortgages,
certificates for shares and all other contracts and documents, whether or not
under the seal of the corporation, except in cases where the signing and
execution thereof shall be expressly delegated by law, the Board of Directors or
these By-laws to some other officer or agent of the corporation. The Chief
Executive Officer shall have general powers of supervision and shall be the
final arbiter of all differences between officers of the corporation, and the
Chief Executive Officer’s decision as to any matter affecting the corporation
shall be final and binding as between the officers of the corporation, subject
only to the Board of Directors and the powers and authority of the Executive
Committee pursuant to Article FIFTH of the Certificate of Incorporation. The
Chief Executive Officer shall perform such other duties as the Board of
Directors may from time to time prescribe.

Section 7.8 Duties of President. Unless another party has been designated as
Chief Operating Officer, the President shall be the Chief Operating Officer of
the corporation, responsible for the day-to-day active management of the
business of the corporation, under the general supervision of the Chief
Executive Officer. In the absence of the Chief Executive Officer, the President
shall perform the duties of the Chief Executive Officer and, when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
Chief Executive Officer. The President shall have concurrent power with the
Chief Executive Officer to sign bonds, mortgages, certificates for shares and
other contracts and documents, whether or not under the seal of the corporation,
except in cases where the signing and execution thereof shall be expressly
delegated by law, the Board of Directors or these By-laws to some other officer
or agent of the corporation. In general, the President shall perform all duties
incident to the office of the President and such other duties as the Chief
Executive Officer or the Board of Directors may from time to time prescribe.

Section 7.9 Duties of Chief Financial Officer. The Chief Financial Officer shall
perform such duties and have such other powers as the Board of Directors, the
Chairman of the Board or the President may from time to time prescribe.

Section 7.10 Duties of Vice President. In the absence of the Chairman of the
Board, the President or in the event of their inability or refusal to act, the
Vice President (or in the event there be more than one Vice President, the Vice
Presidents in the order designated by the Directors, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. The Vice President shall perform
such other duties and have such other powers as the Board of Directors, the
Chairman of the Board or the President may from time to time prescribe.

Section 7.11 Duties of Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record all the
proceedings of the

 

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meetings of the corporation and of the Board of Directors in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, except as
otherwise provided in these By-laws, and shall perform such other duties as may
be prescribed by the Board of Directors, the Chairman of the Board or the
President, under whose supervision he or she shall be. The Secretary shall have
charge of the stock ledger (which may, however, be kept by any transfer agent or
agents of the corporation under his direction) and of the corporate seal of the
corporation.

Section 7.12 Duties of Assistant Secretary. The Assistant Secretary, or if there
be more than one, the Assistant Secretaries in the order determined by the Board
of Directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors or the Chairman of the Board may from time to time prescribe.

Section 7.13 Duties of Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse or supervise the disbursement of the
funds of the corporation as may be ordered by the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the Board of
Directors, at its regular meetings, or when the Board of Directors so requires,
an account of all of his transactions as Treasurer and of the financial
condition of the corporation. If required by the Board of Directors, he or she
shall give the corporation a bond in such sum and with such surety or sureties
as shall be satisfactory to the Board of Directors for the faithful performance
of the duties of this office and for the restoration to the corporation, in case
of his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his possession or
under his control belonging to the corporation.

Section 7.14 Duties of Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors or the Chairman of the Board may from time to time prescribe.

ARTICLE 8

RESIGNATIONS, REMOVALS AND VACANCIES

Section 8.1 Directors.

(a) Resignations. Any Director may resign at any time by giving written notice
to the Board of Directors, the Chairman of the Board, the President or the
Secretary. Such resignation shall take effect at the time specified therein; and
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.

 

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(b) Removals. Subject to any provisions of the Certificate of Incorporation, the
holders of stock entitled to vote generally in the election of Directors may, at
any meeting called for that purpose, by the affirmative vote of a majority of
the shares of such stock outstanding and entitled to vote thereat, remove any
Director or the entire Board of Directors, with or without cause.

Whenever the holders of any class or series are entitled to elect one or more
Directors pursuant to the Certificate of Incorporation, this subsection shall
apply, in respect to the removal of a Director or Directors so elected, to the
vote of the holders of the outstanding shares of that class or series and not to
the vote of the outstanding shares as a whole.

(c) Vacancies. Except as otherwise provided in the Certificate of Incorporation,
vacancies occurring in the office of Director and newly created Directorships
resulting from any increase in the authorized number of Directors shall be
filled by a majority of the Directors then in office, though less than a quorum,
and the Directors so chosen shall hold office, subject to the By-laws, until the
next election of the class for which such Directors shall have been chosen, and
until their successors are duly elected and qualified or until their earlier
resignation or removal. Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more Directors pursuant to the
Certificate of Incorporation, vacancies and newly created Directorships of such
class or classes or series may be filled by a majority of the Directors elected
by such class or classes or series thereof then in office, or by a sole
remaining Director so elected.

If there are no Directors in office, then an election of Directors may be held
in the manner provided under the DGCL.

Unless otherwise provided in the Certificate of Incorporation or these By-laws,
when one or more Directors shall resign from the Board, effective at a future
date, a majority of the Directors then in office, including those who have so
resigned, shall have power to fill such vacancy or vacancies, the vote thereon
to take effect when such resignation or resignations shall become effective, and
each Director so chosen shall hold office as provided in this section in the
filling of other vacancies.

Section 8.2 Officers. Any officer may resign at any time by giving written
notice to the Board of Directors, the Chairman of the Board, the Chief Executive
Officer, the President or the Secretary. Such resignation shall take effect at
the time specified therein; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective. The
Board of Directors may, at any meeting called for that purpose, remove from
office any officer of the corporation. Any vacancy occurring in the office of
Chairman of the Board, President, Secretary or Treasurer shall be filled by the
Board of Directors and the officers so chosen shall hold office subject to the
By-laws for the unexpired term in respect of which the vacancy occurred and
until their successors shall be elected and qualify or until their earlier
resignation or removal. The foregoing officer removal and appointment
authorities of the Board of Directors shall be subject to any applicable right
of the Executive Committee to authorize and approve the removal and appointment
of certain officers of the corporation in accordance with Article FIFTH of the
Certificate of Incorporation.

 

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ARTICLE 9

CERTIFICATES OF STOCK, TRANSFERS AND RECORD DATES

Section 9.1 Form of Certificates. The shares of the corporation shall be
represented by certificates; provided that the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolutions shall not apply
to shares represented by a certificate until such certificate is surrendered to
the corporation. Notwithstanding the adoption of such a resolution by the Board
of Directors, every holder of stock in the corporation shall be entitled to have
a certificate, signed by, or in the name of, the corporation by (a) the Chairman
of the Board, the Vice-Chairman of the Board or the President of the
corporation, and (b) the Secretary, the Treasurer, an Assistant Secretary or an
Assistant Treasurer of the corporation, certifying the number of shares owned by
such holder in the corporation.

Section 9.2 Facsimile Signatures. Where a certificate is countersigned (i) by a
transfer agent other than the corporation or its employee or (ii) by a registrar
other than the corporation or its employee, any other signatures on the
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed, or whose facsimile signature has been placed upon, a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.

Section 9.3 Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation with respect to certificated
stock alleged to have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or such owner’s legal representative, to
advertise the same in such manner as the corporation shall require and/or give
the corporation or its transfer agent or registrar a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
or its transfer agent or registrar with respect to the certificate alleged to
have been lost, stolen or destroyed.

Section 9.4 Transfers of Shares. All transfers of shares of capital stock of the
corporation are subject to the terms, conditions and restrictions, if any, of
the Certificate of Incorporation. Transfers of shares of capital stock of the
corporation shall be made on the books of the corporation by the registered
holder thereof, or by his attorney thereunder authorized by power of attorney
duly executed and filed with the Secretary of the corporation, or with a
transfer agent appointed as provided in Section 9.5, and, if certificated
shares, on surrender of the certificate or certificates for the shares properly
endorsed and the payment of all transfer taxes thereon. The person in whose
names shares of stock are registered on the books of the corporation shall be
considered the owner thereof for all purposes as regards the corporation, but

 

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whenever any transfer of shares is made for collateral security, and not
absolutely, that fact, if known to the Secretary, shall be stated in the entry
of transfer. The Board of Directors may, from time to time, make any additional
rules and regulations as it may deem expedient, not inconsistent with these
By-laws, concerning the issue, transfer and registration of certificates for
shares of the stock of the corporation.

Section 9.5 Transfer Agents and Registrants. The Board of Directors may appoint
one or more transfer agents and one or more registrars for the stock of the
corporation.

Section 9.6 Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner and to hold liable for
calls and assessments a person registered on its books as the owner of shares,
and shall not be bound to recognize any equitable or other claim to, or interest
in, such share or shares on the part of any other person, whether or not the
corporation shall have express or other notice thereof, except as otherwise
provided by the law of the State of Delaware.

ARTICLE 10

INDEMNIFICATION

Section 10.1 Right to Indemnification. The corporation shall indemnify, to the
fullest extent permitted by the DGCL, any present or former Director or member
of the Executive Committee as agent of the corporation, and may indemnify any
present or former officer, employee or agent of the corporation selected by, and
to the extent determined by, the Board of Directors for indemnification, who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that such person is or was a Director,
Executive Committee member, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit plan,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding; provided, however, that the corporation shall
not indemnify any present or former Director or Executive Committee Member in
connection with any proceeding (or part thereof) initiated by such person unless
(x) the corporation has joined in or the Board of Directors has consented to the
initiation of such proceeding; or (y) the proceeding is one to enforce
indemnification rights granted by the corporation.

Section 10.2 Derivative Actions. The corporation shall indemnify any present or
former Director or Executive Committee member of the corporation, and may
indemnify any present or former officer, employee or agent of the corporation
selected by, and to the extent determined by, the Board of Directors for
indemnification, who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a Director, Executive Committee member, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another

 

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corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys” fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

Section 10.3 Expenses. The corporation shall indemnify any present or former
Director or Executive Committee member of the corporation, and may indemnify any
present or former officer, employee or agent of the corporation selected by, and
to the extent determined by, the Board of Directors for indemnification, against
expenses (including attorneys’ fees) actually and reasonably incurred by such
person in connection therewith, to the extent that a present or former Director,
Executive Committee member, officer, employee or agent of the corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 10.1 or 10.2, or in defense of any claim,
issue or matter therein.

Section 10.4 Authorization. The corporation shall make any indemnification under
Section 10.1 or 10.2 (unless ordered by a court) only as authorized in the
specific case upon a determination that indemnification of the present or former
Director, Executive Committee member, officer, employee or agent of the
corporation is proper in the circumstances because such person has met the
applicable standard of conduct set forth in Section (a) or (b) of this Article
10. Such determination shall be made, with respect to a person who is a
Director, Executive Committee member or officer at the time of such
determination, (1) by a majority vote of Directors who were not parties to such
action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such Directors designated by majority vote of such directors, even
if less than a quorum, or (3) if there are no such Directors, or if such
Directors so direct, by independent legal counsel in a written opinion, or
(4) by the stockholders of the corporation.

Section 10.5 Advance Payment of Expenses. The corporation shall pay expenses
(including attorneys’ fees) incurred by a present or former Director or
Executive Committee member, and may pay expenses (including attorneys’ fees)
incurred by any present or former officer, employee or agent of the corporation,
in defending a civil or criminal action, suit or proceeding in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Director, Executive Committee member or
officer to repay such amount if it shall ultimately be determined that such
Director, Executive Committee member or officer is not entitled to be
indemnified by the corporation as authorized in Article 10 herein.

Section 10.6 Non-Exclusiveness. The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of this Article 10
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under these By-laws,
any agreement, any vote of stockholders or disinterested Directors or otherwise,
both as to action in such person’s official capacity and as to action in another
capacity while holding such office or position.

 

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Section 10.7 Insurance. The corporation shall have the right, power and
authority to purchase and maintain insurance on behalf of any person who is or
was a Director, Executive Committee member, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person’s status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article 10 and the DGCL.

For purposes of this Article 10, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes
assessed on a person with respect to any employee benefit plan; and references
to “serving at the request of the corporation” shall include any service as a
Director, Executive Committee member, board committee member, officer, employee
or agent of the corporation which imposes duties on, or involves services by,
such Director, Executive Committee member, board committee member, officer,
employee or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner “not
opposed to the best interests of the corporation” as referred to in this
section.

Section 10.8 General. The corporation shall continue the indemnification and
advancement of expenses provided by, or granted pursuant to, Article 10 herein,
unless otherwise provided when authorized or ratified, as to a person who has
ceased to be a Director, Executive Committee member, officer, employee or agent
of the corporation, and the indemnification and advancement of expenses provided
by, or granted pursuant to this Article 10 shall inure to the benefit of the
heirs, executors and administrators of such a person. The provisions of this
Article 10 shall be considered a contract between the corporation and each
Director or Executive Committee member, or appropriately designated officer,
employee or agent, who serves in such capacity at any time while this Article 10
is in effect, and any repeal or modification of this Article 10 shall not affect
any rights or obligations then existing with respect to any state of facts then
or theretofore existing or any action, suit or proceeding theretofore or
thereafter brought or threatened based in whole or in part upon such state of
facts; provided, however, that the provisions of this Article 10 shall not be
deemed to be a contract between the corporation and any Directors, officers,
employees or agents of any other corporation (the “Second Corporation”) that
shall merge into or consolidate with the corporation where the corporation shall
be the surviving or resulting corporation, and any such directors, officers,
employees or agents of the Second Corporation, in their capacity as such, shall
be indemnified only at the discretion of the Board of Directors.

 

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ARTICLE 11

EXECUTION OF PAPERS

Except as otherwise provided in these By-laws or as the Board of Directors may
generally or in particular cases otherwise determine, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts and other instruments
authorized to be executed on behalf of the corporation shall be executed by any
officer, agent or agents as may be authorized by the Board of Directors from
time to time.

ARTICLE 12

FISCAL YEAR

The fiscal year of the corporation shall end on the 31st day of December of each
year.

ARTICLE 13

DEPOSITORIES

The Board of Directors or an officer designated by the Board shall appoint
banks, trust companies, or other depositories in which shall be deposited from
time to time the money or securities of the corporation.

ARTICLE 14

SEAL

The Corporate seal shall have inscribed thereon the name of the corporation, the
year of its organization and the word “Delaware.” The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.

ARTICLE 15

OFFICES

Section 15.1 Registered Office. The registered office in the State of Delaware
shall be located at 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of the corporation’s registered agent at such address shall be
The Corporation Trust Company.

Section 15.2 Principal Office. The corporation may also have offices within and
without the State of Delaware as the Board of Directors may from time to time
determine or the business of the corporation may require.

 

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ARTICLE 16

AMENDMENTS

Except to the extent otherwise provided in the Certificate of Incorporation,
these By-laws may be amended or repealed by the vote of a majority of the
Directors present at any meeting at which a quorum is present or by the vote of
the holders of a majority of the total outstanding voting stock of the
corporation, present in person or represented by proxy, at a meeting of
stockholders at which a quorum is present.

 

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