FLORIDA BANKS INC
PLACEMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex1016.txt
<DESCRIPTION>PLACEMENT AGREEMENT
<TEXT>
Exhibit 10.16

                               FLORIDA BANKS, INC.

                            3,000 Capital Securities


                        Floating Rate Capital Securities
               (Liquidation Amount $1,000.00 per Capital Security)


                               PLACEMENT AGREEMENT

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

                                                               December 11, 2002



FTN Financial Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee  38117

Keefe, Bruyette & Woods, Inc.
787 7th Avenue
4th Floor
New York, New York  10019

Ladies and Gentlemen:

     Florida  Banks,  Inc.,  a  Florida  corporation  (the  "Company"),  and its
financing subsidiary,  Florida Banks Statutory Trust II, a Connecticut statutory
trust (the "Trust," and hereinafter  together with the Company, the "Offerors"),
hereby confirm their agreement (this  "Agreement")  with you as placement agents
(the "Placement Agents"), as follows:

Section 1. Issuance and Sale of Securities.
           -------------------------------

     1.1.  Introduction.  The Offerors  propose to issue and sell at the Closing
           ------------
(as defined in Section 2.3.1 hereof) 3,000 of the Trust's  Floating Rate Capital
Securities,  with a liquidation  amount of $1,000.00  per capital  security (the
"Capital  Securities"),  to Preferred Term Securities VIII, Ltd., a company with
limited  liability  established  under  the  laws  of the  Cayman  Islands  (the
"Purchaser") pursuant to the terms of a Subscription  Agreement entered into, or
to be entered into on or prior to the Closing Date (as defined in Section  2.3.1
hereof), between the Offerors and the Purchaser (the "Subscription  Agreement"),
the form of which is  attached  hereto as Exhibit A and  incorporated  herein by
this reference.

     1.2.  Operative  Agreements.  The  Capital  Securities  shall be fully  and
           ---------------------
unconditionally  guaranteed on a subordinated  basis by the Company with respect
to distributions and amounts payable upon  liquidation,  redemption or repayment
(the  "Guarantee")   pursuant  and  subject  to  the  Guarantee  Agreement  (the
"Guarantee  Agreement"),  to be dated as of the Closing  Date and  executed  and
delivered by the Company and State Street Bank and Trust Company of Connecticut,
National Association ("State Street"), as trustee (the "Guarantee Trustee"), for

                                      B-3

<PAGE>

the  benefit  from time to time of the holders of the  Capital  Securities.  The
entire  proceeds  from  the  sale by the  Trust to the  holders  of the  Capital
Securities shall be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"),  and shall be
used by the Trust to purchase  $3,093,000.00 in principal amount of the Floating
Rate Junior  Subordinated  Deferrable  Interest Debentures (the "Debentures") of
the Company.  The Capital  Securities  and the Common  Securities  for the Trust
shall be issued  pursuant to an Amended and Restated  Declaration of Trust among
State  Street,  as  institutional  trustee (the  "Institutional  Trustee"),  the
Administrators  named  therein,  and the Company,  to be dated as of the Closing
Date and in substantially the form heretofore  delivered to the Placement Agents
(the "Trust Agreement"). The Debentures shall be issued pursuant to an Indenture
(the  "Indenture"),  to be dated as of the Closing Date, between the Company and
State Street,  as indenture  trustee (the  "Indenture  Trustee").  The documents
identified  in this Section 1.2 and in Section 1.1 are referred to herein as the
"Operative Documents."

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

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

Section 2. Purchase of Capital Securities.
           ------------------------------

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

     2.2.  Subscription  Agreement.  The Offerors hereby agree to evidence their
           -----------------------
acceptance of the  subscription  by  countersigning  a copy of the  Subscription
Agreement and returning the same to the Placement Agents.

2.3. Closing and Delivery of Payment.
     -------------------------------

     2.3.1.  Closing;  Closing  Date.  The  sale  and  purchase  of the  Capital
             -----------------------
Securities by the Offerors to the  Purchaser  shall take place at a closing (the
"Closing")  at the offices of Lewis,  Rice & Fingersh,  L.C., at 10:00 a.m. (St.
Louis time) on December  19, 2002,  or such other  business day as may be agreed
upon by the Offerors and the Placement  Agents (the "Closing  Date");  provided,
however,  that in no event shall the Closing Date occur later than  December 20,
2002 unless  consented to by the  Purchaser.  Payment by the Purchaser  shall be
payable in the manner set forth in the Subscription  Agreement and shall be made
prior to or on the Closing Date.


                                        2

<PAGE>

     2.3.2.  Delivery.  The certificate for the Capital  Securities  shall be in
             --------
definitive  form,  registered  in the name of the Purchaser and in the aggregate
amount of the Capital Securities purchased by the Purchaser.

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

2.4. Placement Agents' Fees and Expenses.
     -----------------------------------

     2.4.1.  Placement Agents' Compensation.  Because the proceeds from the sale
             ------------------------------
of the Capital  Securities  shall be used to purchase  the  Debentures  from the
Company,  the Company  shall pay an  aggregate  of $30.00 for each  $1,000.00 of
principal  amount of  Debentures  sold to the Trust  (excluding  the  Debentures
related to the Common  Securities  purchased  by the  Company).  Of this amount,
$15.00 for each $1,000.00 of principal  amount of Debentures shall be payable to
FTN Financial  Capital Markets and $15.00 for each $1,000.00 of principal amount
of  Debentures  shall be payable to Keefe,  Bruyette & Woods,  Inc.  Such amount
shall be  delivered  to the  Trustee  or such  other  person  designated  by the
Placement Agents on the Closing Date and shall be allocated  between and paid to
the respective Placement Agents as directed by the Placement Agents.

     2.4.2.  Costs and Expenses.  Whether or not this Agreement is terminated or
             ------------------
the sale of the Capital Securities is consummated,  the Company hereby covenants
and agrees that it shall pay or cause to be paid (directly or by  reimbursement)
all reasonable costs and expenses incident to the performance of the obligations
of  the  Offerors  under  this  Agreement,  including  all  fees,  expenses  and
disbursements  of counsel  and  accountants  for the  Offerors;  all  reasonable
expenses  incurred by the Offerors  incident to the  preparation,  execution and
delivery of the Trust Agreement, the Indenture, and the Guarantee; and all other
reasonable costs and expenses  incident to the performance of the obligations of
the Company hereunder and under the Trust Agreement.

     2.5. Failure to Close. If any of the conditions to the Closing specified in
          ----------------
this  Agreement  shall  not  have  been  fulfilled  to the  satisfaction  of the
Placement  Agents or if the Closing  shall not have  occurred on or before 10:00
a.m.  (St.   Louis  time)  on  December  20,  2002,   then  each  party  hereto,
notwithstanding anything to the contrary in this Agreement, shall be relieved of
all further  obligations under this Agreement without thereby waiving any rights
it may have by reason of such nonfulfillment or failure; provided, however, that
the obligations of the parties under Sections  2.4.2,  7.5 and 9 shall not be so
relieved and shall continue in full force and effect.

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

     3.1.  Opinions of Counsel.  On the Closing Date, the Placement Agents shall
have received the  following  favorable  opinions,  each dated as of the Closing
Date: (a) from Akerman,  Senterfitt & Eidson, P.A., counsel for the Offerors and
addressed to the Purchaser and the Placement  Agents in  substantially  the form
set  forth on  Exhibit  B-1  attached  hereto  and  incorporated  herein by this
               ------------
reference,  (b) from Bingham McCutchen LLP, special  Connecticut  counsel to the
Offerors and addressed to the Purchaser,  the Placement Agents and the Offerors,
in  substantially  the form  set  forth  on  Exhibit  B-2  attached  hereto  and
                                             ------------
incorporated herein by this reference and (c) from Lewis, Rice & Fingersh, L.C.,
special tax counsel to the Offerors,  and addressed to the Placement  Agents and

                                       3

<PAGE>

the Offerors, in substantially the form set forth on Exhibit B-3 attached hereto
                                                     -----------
and incorporated herein by this reference, subject to the receipt by Lewis, Rice
&  Fingersh,  L.C. of a  representation  letter from the Company in the form set
forth in Exhibit B-3  completed in a manner  reasonably  satisfactory  to Lewis,
         -----------
Rice & Fingersh,  L.C.  (collectively,  the "Offerors'  Counsel  Opinions").  In
rendering the Offerors' Counsel Opinions, counsel to the Offerors may rely as to
factual  matters upon  certificates  or other  documents  furnished by officers,
directors  and trustees of the  Offerors  (copies of which shall be delivered to
the Placement  Agents and the Purchaser) and by government  officials,  and upon
such other  documents  as  counsel  to the  Offerors  may,  in their  reasonable
opinion, deem appropriate as a basis for the Offerors' Counsel Opinions. Counsel
to the  Offerors  may specify the  jurisdictions  in which they are  admitted to
practice  and that they are not  admitted to practice in any other  jurisdiction
and are not  experts  in the law of any  other  jurisdiction.  If the  Offerors'
counsel is not  admitted to  practice  in the State of New York,  the opinion of
Offerors' counsel may assume, for purposes of the opinion,  that the laws of the
State of New York are substantively  identical,  in all respects material to the
opinion,  to the internal laws of the state in which such counsel is admitted to
practice.  Such Offerors'  Counsel  Opinions shall not state that they are to be
governed or qualified by, or that they are  otherwise  subject to, any treatise,
written policy or other document relating to legal opinions,  including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).

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

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

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

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

     3.6. Sale of Purchaser Securities. The Purchaser shall have sold securities
          ----------------------------
issued by the  Purchaser  in an amount  such that the net  proceeds of such sale
shall be (i)  available on the Closing Date and (ii) in an amount  sufficient to
purchase  the Capital  Securities  and all other  capital or similar  securities
contemplated  in  agreements  similar  to this  Agreement  and the  Subscription
Agreement.


                                        4

<PAGE>

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

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

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

     4.1.  Executed  Agreement.  The  Offerors  shall  have  received  from  the
           -------------------
Placement Agents an executed copy of this Agreement.

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

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

5.1. Securities Law Matters.
     ----------------------

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

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

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

     (d) Neither the Company  nor the Trust is or,  after  giving  effect to the
offering  and  sale  of the  Capital  Securities  and  the  consummation  of the
transactions described in this Agreement,  will be an "investment company" or an

                                       5

<PAGE>

entity "controlled" by an "investment  company," in each case within the meaning
of  Section  3(a)  of the  Investment  Company  Act of  1940,  as  amended  (the
"Investment  Company  Act")  without  regard to Section  3(c) of the  Investment
Company Act.

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

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

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

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

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

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

                                       6

<PAGE>

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

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

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

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

     5.11.  Permits.  The  Company and each of its  subsidiaries  (as defined in
            -------
Section  1-02(x) of Regulation S-X to the  Securities Act (the  "Subsidiaries"))
have all  requisite  power  and  authority,  and all  necessary  authorizations,
approvals, orders, licenses,  certificates and permits of and from regulatory or
governmental  officials,  bodies and tribunals, to own or lease their respective
properties and to conduct their  respective  businesses as now being  conducted,

                                       7

<PAGE>

except  such  authorizations,  approvals,  orders,  licenses,  certificates  and
permits  which,  if not obtained  and  maintained,  would not,  singly or in the
aggregate,  have a Material  Adverse Effect,  and neither the Company nor any of
its  Subsidiaries  has  received  any  notice  of  proceedings  relating  to the
revocation  or  modification  of any  such  authorizations,  approvals,  orders,
licenses,  certificates  or permits which,  singly or in the  aggregate,  if the
failure to be so licensed or approved is the subject of an unfavorable decision,
ruling or finding,  would,  singly or in the aggregate,  have a Material Adverse
Effect;  and the  Company  and  its  Subsidiaries  are in  compliance  with  all
applicable laws,  rules,  regulations and orders and consents,  the violation of
which would, singly or in the aggregate, have a Material Adverse Effect.

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

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

5.14. Financial Statements.
      --------------------

     (a)  The  consolidated  balance  sheets  of  the  Company  and  all  of its
Subsidiaries  as of  December  31,  2001  and  December  31,  2000  and  related
consolidated income statements and statements of changes in shareholders' equity
for the 3 years ended December 31, 2001 together with the notes thereto, and the
consolidated  balance  sheets of the Company and all of its  Subsidiaries  as of
September 30, 2002 and the related consolidated income statements and statements
of changes in shareholders'  equity for the 9 months then ended,  copies of each
of which have been provided to the Placement  Agents  (together,  the "Financial
Statements"),   have  been  prepared  in  accordance  with  generally   accepted
accounting  principles applied on a consistent basis (except as may be disclosed
therein) and fairly present in all material respects the financial  position and
the results of operations and changes in shareholders' equity of the Company and
all of its Subsidiaries as of the dates and for the periods indicated  (subject,
in the case of  interim  financial  statements,  to  normal  recurring  year-end
adjustments,  none of which  shall be  material).  The books and  records of the
Company and all of its Subsidiaries have been, and are being,  maintained in all
material respects in accordance with generally  accepted  accounting  principles
and any other  applicable  legal and  accounting  requirements  and reflect only
actual transactions.

     (b) The  information in the Company's  report on form 10-Q dated  September
30,  2002 (the  "10-Q")  previously  provided  to the  Placement  Agents  fairly
presents in all material respects the financial  position of the Company and all
of its Subsidiaries as of such date.

     (c) Since the  respective  dates of the Financial  Statements and the 10-Q,
there has been no material  adverse  change or  development  with respect to the
financial  condition  or earnings  of the  Company and all of its  Subsidiaries,
taken as a whole.

                                       8

<PAGE>

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

     5.15.  Regulatory  Enforcement Matters.  Neither the Company nor any of its
            -------------------------------
Subsidiaries  is  subject or is party to, or has  received  any notice or advice
that any of them may become subject or party to, any investigation  with respect
to, any  cease-and-desist  order,  agreement,  consent agreement,  memorandum of
understanding or other regulatory  enforcement action,  proceeding or order with
or by, or is a party to any commitment  letter or similar  undertaking to, or is
subject to any  directive  by, or has been since January 1, 1999, a recipient of
any  supervisory  letter from, or since  January 1, 1999,  has adopted any board
resolutions  at the request of, any  Regulatory  Agency (as defined  below) that
currently  restricts  in any material  respect the conduct of their  business or
that in any material  manner  relates to their  capital  adequacy,  their credit
policies,  their ability or authority to pay dividends or make  distributions to
their  shareholders  or make  payments  of  principal  or interest on their debt
obligations,   their   management  or  their   business   (each,  a  "Regulatory
Agreement"),  nor has the Company or any of its Subsidiaries  been advised since
January 1, 1999,  by any  Regulatory  Agency that it is  considering  issuing or
requesting  any  such  Regulatory  Agreement.  There is no  material  unresolved
violation,  criticism or exception by any Regulatory  Agency with respect to any
report or statement  relating to any  examinations  of the Company or any of its
Subsidiaries.  As used herein, the term "Regulatory Agency" means any federal or
state  agency   charged  with  the   supervision  or  regulation  of  depository
institutions,  bank, financial or savings and loan holding companies, or engaged
in  the   insurance  of   depository   institution   deposits,   or  any  court,
administrative  agency or commission or other governmental agency,  authority or
instrumentality  having supervisory or regulatory  authority with respect to the
Company or any of its Subsidiaries.

     5.16.  No Material  Change.  Since  December  31,  2001,  there has been no
            -------------------
material adverse change or development with respect to the condition  (financial
or otherwise),  earnings, affairs, business,  prospects or results of operations
of the  Company or its  Subsidiaries  on a  consolidated  basis,  whether or not
arising in the ordinary course of business.

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

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

     5.19.  Deferral of  Interest  Payments  on  Debentures.  The Company has no
            -----------------------------------------------
present  intention to exercise  its option to defer  payments of interest on the
Debentures  as  provided  in  the  Indenture.  The  Company  believes  that  the
likelihood that it would exercise its right to defer payments of interest on the
Debentures as provided in the Indenture at any time during which the  Debentures
are outstanding is remote because of the  restrictions  that would be imposed on
the  Company's  ability to declare or pay dividends or  distributions  on, or to
redeem, purchase,  acquire or make a liquidation payment with respect to, any of

                                       9

<PAGE>

the Company's capital stock and on the Company's ability to make any payments of
principal,  interest or premium on, or repay,  repurchase or redeem,  any of its
debt securities that rank pari passu in all respects with, or junior in interest
to, the Debentures.

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

6.1. Organization, Standing and Qualification.
     ----------------------------------------

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

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

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

     6.3. General Solicitation. In the case of the offer and sale of the Capital
          --------------------
Securities,  no form of general  solicitation or general advertising was used by
the  Placement  Agent or its  representatives  including,  but not  limited  to,
advertisements,  articles,  notices  or other  communications  published  in any
newspaper,  magazine or similar medium or broadcast over  television or radio or
any  seminar  or  meeting  whose  attendees  have been  invited  by any  general
solicitation  or  general  advertising.  Neither  the  Placement  Agent  nor its
representatives  have engaged or will engage in any "directed  selling  efforts"
within the meaning of Regulation S with respect to the Capital Securities.

     6.4. Purchaser.  The Placement Agent has made such reasonable inquiry as is
          ---------
necessary to determine  that the Purchaser is acquiring  the Capital  Securities
for its own  account,  that the  Purchaser  does not  intend to  distribute  the
Capital  Securities  in  contravention  of  the  Securities  Act  or  any  other
applicable  securities  laws,  and that the Purchaser is not a "U.S.  person" as
that term is defined under Rule 902 of the Securities Act.

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

                                       10

<PAGE>

transfers of the Capital  Securities  will not be made except in compliance with
applicable securities laws.

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

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

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

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

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

     7.4.  Investment  Company.  The  Offerors  shall not engage,  or permit any
           -------------------
Subsidiary to engage,  in any activity which would cause it or any Subsidiary to
be an "investment company" under the provisions of the Investment Company Act.

     7.5.  Reimbursement  of  Expenses.  If the sale of the  Capital  Securities
           ---------------------------
provided for herein is not  consummated  (i) because any  condition set forth in
Section 3 hereof is not satisfied, or (ii) because of any refusal,  inability or
failure on the part of the Company or the Trust to perform any agreement  herein
or comply  with any  provision  hereof  other  than by reason of a breach by the
Placement  Agents,  the Company shall reimburse the Placement Agents upon demand
for all of their pro rata share of out-of-pocket  expenses (including reasonable
fees and  disbursements  of counsel) in an amount not to exceed  $50,000.00 that
shall have been  incurred by them in connection  with the proposed  purchase and
sale of the Capital Securities. Notwithstanding the foregoing, the Company shall
have no obligation to reimburse  the  Placement  Agents for their  out-of-pocket
expenses  if the sale of the  Capital  Securities  fails to  occur  because  the
condition  set forth in Section 3.6 is not  satisfied  or because  either of the
Placement Agents fails to fulfill a condition set forth in Section 4.

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

                                       11

<PAGE>

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

     7.8.  Quarterly  Reports.  Within 50 days of the end of each  calendar year
           ------------------
quarter and within 100 days of the end of each  calendar  year during  which the
Debentures are issued and outstanding,  the Offerors shall submit to The Bank of
New York a completed  quarterly report in the form attached hereto as Exhibit D.
The Offerors  acknowledge and agree that The Bank of New York and its successors
and assigns is a third party beneficiary of this Section 7.8

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

Section 9. Indemnification.
           ---------------

     9.1. Indemnification  Obligation.  The Offerors shall jointly and severally
          ---------------------------
indemnify and hold  harmless the Placement  Agents and the Purchaser and each of
their respective agents, employees,  officers and directors and each person that
controls either of the Placement  Agents or the Purchaser  within the meaning of
Section 15 of the  Securities Act or Section 20 of the Exchange Act, and agents,
employees,  officers and directors or any such  controlling  person of either of
the  Placement  Agents  or  the  Purchaser  (each  such  person  or  entity,  an
"Indemnified  Party")  from and  against any and all  losses,  claims,  damages,
judgments,  liabilities or expenses, joint or several, to which such Indemnified
Party may become  subject  under the  Securities  Act, the Exchange Act or other
federal or state  statutory  law or  regulation,  or at common law or  otherwise
(including in settlement of any litigation,  if such settlement is effected with
the written consent of the Offerors),  insofar as such losses, claims,  damages,
judgments, liabilities or expenses (or actions in respect thereof) arise out of,
or are based upon, or relate to, in whole or in part,  (a) any untrue  statement
or alleged  untrue  statement of a material  fact  contained in any  information
(whether  written or oral) or documents  executed in favor of, furnished or made
available to the Placement  Agents or the Purchaser by the Offerors,  or (b) any
omission or alleged  omission to state in any  information  (whether  written or
oral) or  documents  executed in favor of,  furnished  or made  available to the
Placement Agents or the Purchaser by the Offerors a material fact required to be
stated therein or necessary to make the statements  therein not misleading,  and
shall reimburse each Indemnified  Party for any legal and other expenses as such
expenses are reasonably  incurred by such  Indemnified  Party in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, judgments,  liability,  expense or action described in this Section 9.1.
In addition to their other obligations under this Section 9, the Offerors hereby

                                       12

<PAGE>

agree that,  as an interim  measure  during the  pendency of any claim,  action,
investigation,  inquiry or other  proceeding  arising out of, or based upon,  or
related to the matters described above in this Section 9.1, they shall reimburse
each  Indemnified  Party on a quarterly basis for all reasonable  legal or other
expenses incurred in connection with  investigating or defending any such claim,
action, investigation, inquiry or other proceeding,  notwithstanding the absence
of a  judicial  determination  as to the  propriety  and  enforceability  of the
possibility  that such  payments  might later be held to have been improper by a
court  of  competent   jurisdiction.   To  the  extent  that  any  such  interim
reimbursement  payment is so held to have been improper,  each Indemnified Party
shall  promptly  return such amounts to the  Offerors  together  with  interest,
determined on the basis of the prime rate (or other commercial  lending rate for
borrowers of the highest credit  standing)  announced from time to time by First
Tennessee Bank, N.A. (the "Prime Rate"). Any such interim reimbursement payments
which are not made to an  Indemnified  Party  within  30 days of a  request  for
reimbursement  shall  bear  interest  at the  Prime  Rate  from the date of such
request.

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

     9.3. Contribution. If the indemnification provided for in this Section 9 is
          ------------
required  by its  terms,  but is for any  reason  held to be  unavailable  to or
otherwise  insufficient to hold harmless an Indemnified  Party under Section 9.1
in respect of any losses, claims,  damages,  liabilities or expenses referred to
herein or therein,  then the  Offerors  shall  contribute  to the amount paid or
payable by such Indemnified  Party as a result of any losses,  claims,  damages,
judgments,  liabilities or expenses referred to herein (i) in such proportion as
is appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the  Indemnified  Party,  on the other hand,  from the offering of
such Capital Securities,  or (ii) if the allocation provided by clause (i) above
is not permitted by applicable  law, in such  proportion  as is  appropriate  to
reflect not only the relative  benefits referred to in clause (i) above but also
the relative fault of the Offerors,  on the one hand, and the Placement  Agents,

                                       13

<PAGE>

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

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

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

Section 10. Rights and Responsibilities of Placement Agents.
            -----------------------------------------------

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

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

                                       14

<PAGE>

Agents  shall be under no  obligation  to  exercise  any of the rights or powers
vested in them by this Agreement.

Section 11. Miscellaneous.
            -------------

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

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

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

         if to the Placement Agents, to:

                                FTN Financial Capital Markets
                                845 Crossover Lane, Suite 150
                                Memphis, Tennessee  38117
                                Telecopier:  901-435-4706
                                Telephone:  800-456-5460
                                Attention:  James D. Wingett

                                        and

                                Keefe, Bruyette & Woods, Inc.
                                787 7th Avenue
                                4th Floor
                                New York, New York  10019
                                Telecopier:  212-403-2000
                                Telephone:  212-403-1004
                                Attention:  Mitchell Kleinman, General Counsel

                                       15

<PAGE>

         with a copy to:

                                Lewis, Rice & Fingersh, L.C.
                                500 North Broadway, Suite 2000
                                St. Louis, Missouri  63102
                                Telecopier:  314-241-6056
                                Telephone:  314-444-7600
                                Attention:  Thomas C. Erb, Esq.

                                        and

                                Sidley Austin Brown & Wood LLP
                                787 7th Avenue
                                New York, New York  10019
                                Telecopier:  212-839-5599
                                Telephone:  212-839-5300
                                Attention:  Renwick Martin, Esq.

         if to the Offerors, to:

                                Florida Banks, Inc.
                                5210 Belfort Road, Suite 310
                                Jacksonville, Florida  32256
                                Telecopier:  904-296-2820
                                Telephone:  904-332-7772
                                Attention:  T. Edwin Stinson, Jr.

         with a copy to:

                                Akerman, Senterfitt & Eidson, P.A.
                                One Southeast Third Avenue
                                SunTrust International Center, 28th Floor
                                Miami, Florida  33131
                                Telecopier:  305-374-5095
                                Telephone:  305-374-5600
                                Attention:  Martin T. Schrier, Esq.

     All such notices and communications shall be deemed to have been duly given
(i) at the time delivered by hand, if personally  delivered,  (ii) five business
days after being deposited in the mail, postage prepaid,  if mailed,  (iii) when
answered back, if telexed, (iv) the next business day after being telecopied, or
(v) the next  business  day  after  timely  delivery  to a  courier,  if sent by
overnight  air  courier  guaranteeing  next day  delivery.  From and  after  the
Closing,  the  foregoing  notice  provisions  shall be  superseded by any notice
provisions of the Operative Documents under which notice is given. The Placement
Agents, the Company,  and their respective counsel,  may change their respective
notice  addresses  from time to time by written  notice to all of the  foregoing
persons.

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

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

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

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

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

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

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

                     Signatures appear on the following page



<PAGE>


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

                                Very truly yours,

                                FLORIDA BANKS, INC.


                                By:  /s/ T. Edwin Stinson, Jr.
                                     -------------------------------------------
                                Name:  T. Edwin Stinson, Jr.
                                       -----------------------------------------
                                Title:  Chief Financial Officer
                                        ----------------------------------------


                        FLORIDA BANKS STATUTORY TRUST II


                                By:  /s/ T. Edwin Stinson, Jr.
                                     -------------------------------------------
                                Name:  T. Edwin Stinson, Jr.
                                       -----------------------------------------
                                Title:  Administrator



CONFIRMED AND ACCEPTED,
as of the date first set forth above


FTN FINANCIAL CAPITAL MARKETS,
a division of First Tennessee Bank, N.A.,
as a Placement Agent


By:  James D. Wingett
     ------------------------------------------------------------------
Name:  James D. Wingett
       ----------------------------------------------------------------
Title:  Senior Vice President
        ---------------------------------------------------------------


KEEFE, BRUYETTE & WOODS, INC.
a New York corporation, as a Placement Agent


By:  /s/ Peter J. Wirth
     ------------------------------------------------------------------
Name:  Peter J. Wirth
       ----------------------------------------------------------------
Title:  Managing Director
        ---------------------------------------------------------------

                                       18

<PAGE>


                                       D-1

{MI886388;1}



</TEXT>
</DOCUMENT>
