Exhibit 10.9

                               PSB BANCGROUP, INC.
                         508,756 Shares of Common Stock

                             SALES AGENCY AGREEMENT

                                                                   June 12, 2002

Kendrick, Pierce Securities, Inc.
324 South Hyde Park Avenue, Suite 202
Tampa, Florida 33606

Ladies and Gentlemen:

     PSB BancGroup,  Inc., a Florida  corporation (the "Company"),  is offering,
pursuant to the Securities Act of 1933, as amended (the "1933 Act"),  subject to
the terms and conditions set forth in the Post-Effective  Amendment No. 3 to the
Company's Registration Statement on Form SB-2, Registration No. 333-44161,  (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"SEC"),  including  the  Prospectus  dated June 12, 2002 set forth  therein (the
"Prospectus"),  up to 508,756  shares (the  "Shares")  of its common  stock (the
"Offering").  The Shares are being  offered  pursuant  to the  exercise of up to
508,756  outstanding  warrants  (the  "Warrants")  to purchase  one share of the
Company's common stock at an exercise price (the "Exercise  Price") of $9.00 per
share.  The  Company  is  soliciting  existing  Warrant  Holders  (the  "Warrant
Holders") to exercise  their  Warrants or to sell their  Warrants to third party
investors  (the  "Investors")  at a  purchase  price of $0.25 per  Warrant  (the
"Purchase Price").

     The Company has been  advised by Kendrick,  Pierce  Securities,  Inc.  (the
"Agent")  that the Agent will utilize its best efforts in assisting  the Company
in the  Offering  on the terms and subject to the  conditions  set forth in this
Agreement,  including  soliciting  Warrant  Holders  to  exercise  or sell their
Warrants  and  identifying  Investors to purchase  and  exercise  Warrants.  The
Offering of the Shares will commence as soon as  practicable  following the date
of effectiveness (the "Effective Date") of the Registration Statement.

     Section 1.  Engagement  of the Agent;  Exercise of Warrants and Delivery of
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Shares.
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         (a)  Engagement  of the  Agent.  On the  basis of the  representations,
              -------------------------
warranties,  covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Company hereby engages the Agent to utilize
its  best  efforts  in  assisting  the  Company  with  the  Offering,  including
soliciting  Warrant  Holders to exercise or sell their Warrants and  identifying
Investors to purchase and exercise  Warrants,  and the Agent hereby accepts such
engagement.  Subject to the provisions of Section 8, the engagement of the Agent
hereunder shall terminate upon the expiration date of the Warrants.

         (b)  Escrow  Account.  Pursuant  to an Escrow  Agreement  (the  "Escrow
              ---------------
Agreement") by and between the Company and Independent Bankers' Bank of Florida,
as escrow agent (the "Escrow  Agent"),  all forms and, as  applicable,  payments
evidencing  the deposit of  Warrants by holders who wish to sell their  Warrants
and the intent to  purchase  and  exercise  Warrants  by  prospective  Investors
(collectively,  "Transaction Documents") will be received and held by the Escrow

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Agent,  which shall  deposit any funds  received in an  interest-bearing  escrow
account (the "Escrow  Account") until each Closing Time,  conduct  Closings from
time to time as  described  in Section  1(c) below,  and  otherwise  perform its
obligations under the Escrow Agreement. All funds received shall be made payable
to "Independent Bankers' Bank of Florida for PSB BancGroup, Inc."

         (c) Closing. The Escrow Agent will hold a closing of the purchase, sale
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and exercise of Warrants  deposited with the Escrow Agent on the expiration date
of the Warrants and may also hold  closings upon the  acceptance of  Transaction
Documents  representing Warrants to purchase 55,556 Shares and from time to time
thereafter  during the term of the Offering  pursuant to  instructions  from the
Company in accordance with the terms of the Escrow Agreement.  Each such closing
is referred to herein as a "Closing" and the date of each Closing is referred to
herein as a "Closing Time." At each Closing,  the Escrow Agent shall:  (i) match
orders  represented by deposit and purchase forms on a first-come,  first-served
basis;  (ii) transfer  Warrants from  depositing  Warrant  Holders to Investors;
(iii) exercise Warrants on behalf of Investors;  (iv) remit the sales agent fees
described in Section  1(g)(2)  below to the Agent;  (v) remit gross  proceeds of
$8.37 per  Warrant to the Company  with all  accepted  and  matched  deposit and
purchase forms within the following  three  business  days;  (vi) remit purchase
payments to depositing Warrant Holders within the following three business days;
and (vii) at the final Closing,  remit any interest  earned on funds held in the
Escrow Account to the Company.

         (d) Delivery of Shares and Purchase Price of the Warrants.  The Company
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agrees  to issue or cause to be  issued  the  Shares  subject  to the  exercised
Warrants upon each Closing Time and the fulfillment of the Escrow Agent's duties
pursuant to Section 1(c) above and,  within three business days  thereafter,  to
release for delivery to the  Investors or Warrant  Holders,  as the case may be,
certificates  representing  the Shares at the principal office of the Company or
at such other place as shall be agreed upon between the parties hereto.

         (e) Rejected Subscription. It is understood that the Company shall have
             ---------------------
the right to refuse or reject any request to purchase  Warrants by a prospective
Investor ("Purchase Form"), in whole or in part, for any reason whatsoever,  and
to  promptly  direct the Escrow  Agent to return  all funds,  without  interest,
received by the Escrow Agent to the applicable  Investor.  Additionally,  in the
event  Purchase  Forms are received to purchase more Warrants than are deposited
into the Escrow  Account for sale,  promptly  following  the  Closing  occurring
immediately  before the expiration date of the Warrants,  the Escrow Agent shall
return all funds deposited into the Escrow Account with respect to such Purchase
Forms  that  are not  accepted  in  whole  or in part  to the  Investor  without
interest.

         (f)  Notice  of  Unsold  Warrants.  Ten  business  days  prior  to  the
              ----------------------------
expiration  date of the  Warrants,  the  Company  shall  provide  a notice  (the
"Notice") to each Warrant Holder who has deposited  Warrants to be sold into the
Escrow  Account  that  indicates  as of the date of the  Notice  the  number  of
Warrants  deposited by such Warrant Holder that have not been allocated for sale
to an Investor.  Upon the receipt of the Notice the Warrant  Holder may elect to
revoke  his or her  deposit of  Warrants  into the Escrow  Account  and  instead
exercise such unallocated Warrants.  Any deposited Warrants that are unallocated
to  Investors  and which are not  exercised  by the  applicable  Warrant  Holder
pursuant to the Notice shall terminate on the expiration date of the Warrants in


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<PAGE>

accordance  with the terms of the  Warrants  and the Warrant  Holders  shall not
receive any sales proceeds with respect to such Warrants.

         (g) Sales Agent Fees. In addition to the expenses  specified in Section
             ----------------
4 hereof, the Agent shall receive a sales fee (the "Sales Fee") equal to: (i) 2%
of the aggregate Exercise Price of Warrants exercised in the Offering by Warrant
Holders;  and (ii) 7% of the aggregate  Exercise Price of Warrants  exercised in
the  Offering by  Investors.  No Sales Fee will be paid with respect to Warrants
exercised in the offering by the Company's directors, officers or employees. The
Sales Fee shall be payable at each  Closing.  The first $25,000 of the Sales Fee
shall be reduced by the $25,000  advisory fee received by the Agent  pursuant to
the engagement letter dated January 28, 2002 between the Agent and the Company.

     Section 2. Representations and Warranties.
                ------------------------------

         (a) The Company represents and warrants to the Agent that:

               (i) The Company meets the requirements for use of Form SB-2 under
the 1933 Act. The Registration Statement, including a Preliminary Prospectus (as
defined below),  and such amendments to the  Registration  Statement as may have
been  required to the date of this  Agreement,  has been prepared by the Company
pursuant to and in  conformity  with the  requirements  of the 1933 Act, and the
rules and regulations of the SEC under the 1933 Act (the "1933 Act Regulations")
in all  material  respects  and has been  filed with the SEC under the 1933 Act.
Copies of the Registration  Statement,  including any amendments  thereto,  each
related Preliminary Prospectus (meeting the requirements of Rules 430 or 430A of
the  1933  Act  Regulations)  contained  therein,  and the  exhibits,  financial
statements and schedules  thereto have  heretofore been delivered by the Company
to the Agent.  If required under the 1933 Act  Regulations,  a final  Prospectus
containing  information  permitted to be omitted at the time of effectiveness by
Rule 430A of the 1933 Act Regulations will be filed promptly by the Company with
the SEC in  accordance  with Rule 424(b) of the 1933 Act  Regulations.  The term
"Registration  Statement" as used herein means the Registration  Statement as in
effect  at the  Effective  Date,  as  amended  pursuant  to  the  post-effective
amendment  to be filed in  connection  with the  Offering  (the  "Post-Effective
Amendment")  and  any  subsequent   amendments   thereto,   including  financial
statements and all exhibits and all documents  incorporated by reference therein
and, if applicable,  the  information  deemed to be included by Rule 430A of the
1933 Act Regulations.  The term "Prospectus" as used herein means the Prospectus
contained in the contemplated  Post-Effective  Amendment as first filed with the
SEC pursuant to Rule 424(b) of the 1933 Act Regulations or, if no such filing is
required, the form of final Prospectus included in the Post-Effective Amendment,
except  that if the  Prospectus  provided to the Agent by the Company for use in
connection with the Offering differs from the Prospectus on file with the SEC at
the time the  Post-Effective  Amendment  becomes  effective  (whether or not the
Company is required  to file with the SEC such  revised  Prospectus  pursuant to
Rule 424(b) of the 1933 Act  Regulations),  the term  Prospectus  shall refer to
such  revised  Prospectus  from and after the time it is first  provided  to the
Agent for such use. The term "Preliminary  Prospectus" as used herein shall mean
a preliminary  prospectus as  contemplated  by Rules 430 or 430A of the 1933 Act
Regulations included at any time in the Post-Effective Amendment. All references
in this Agreement to financial  statements  and schedules and other  information
that is contained,  included, stated or described in the Registration Statement,
the  Post-Effective  Amendment,  Preliminary  Prospectus or Prospectus  shall be


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<PAGE>

deemed to mean and include all such financial statements and schedules and other
information that is incorporated by reference in, or deemed to be a part of, the
Registration Statement, the Post-Effective Amendment,  Preliminary Prospectus or
Prospectus, as the case may be.

               (ii)  The SEC has not  issued,  and is not to the  Knowledge  (as
defined  below) of the Company  threatening  to issue,  an order  preventing  or
suspending  the  use  of  any  Preliminary  Prospectus  or  the  Prospectus  nor
instituted proceedings for that purpose. Each Preliminary Prospectus at its date
of issue,  the  Registration  Statement and the Prospectus and any amendments or
supplements  thereto contain or will contain, as the case may be, all statements
that are required to be stated therein by, and in all material  respects conform
or will conform,  as the case may be, to the  requirements  of, the 1933 Act and
the 1933 Act Regulations.  Neither the Registration  Statement nor any amendment
thereto,  as of the applicable date of effectiveness,  contains or will contain,
as the case may be, any  untrue  statement  of a material  fact or omits or will
omit to state any material  fact  required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not  misleading,  and neither the  Prospectus  nor any supplement  thereto
contain or will contain,  as the case may be, any untrue statement of a material
fact or omits or will  omit to state any  material  fact  required  to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances  under which they were made, not  misleading;  provided,  however,
that no  representation  or warranty is made as to  information  contained in or
omitted from the Registration  Statement in reliance upon and in conformity with
information  furnished  in writing to the  Company by and on behalf of the Agent
expressly for use in the Registration Statement.

     For purposes of this  Agreement,  (x) an individual  will be deemed to have
"Knowledge" of a particular  fact or matter if such individual is actually aware
of such fact or matter or a prudent  individual could be expected to discover or
otherwise  become  aware of such fact or matter in the  course of  conducting  a
reasonably   comprehensive   investigation   regarding   the   accuracy  of  any
representations  or  warranties  contained in this  Agreement,  and (y) a person
other than an individual will be deemed to have "Knowledge" of a particular fact
or matter if any  individual  who is serving as an officer or  director  of such
person has or at any time had  Knowledge of such fact or matter (as set forth in
(x) above).

               (iii) Hacker,  Johnson & Smith,  P.A., who are reporting upon the
audited  financial  statements  included in the  Registration  Statement and the
Prospectus,  are independent with respect to the Company as required by the 1933
Act and the 1933 Act Regulations.

               (iv)  This  Agreement  and the  Escrow  Agreement  have been duly
authorized, executed and delivered by the Company and, when duly executed by the
counterparties  thereto, will constitute the valid and binding agreements of the
Company  enforceable  against the Company in accordance with their terms, except
in all cases to the extent that (A)  enforceability may be limited by applicable
bankruptcy, insolvency, reorganization,  moratorium or similar law affecting the
enforcement of creditors' rights and remedies generally; (B) the availability of
the equitable remedy of specific performance and injunctive relief is subject to
the discretion of the court before which the proceedings may be brought; and (C)
the  enforceability  of the provisions  hereof relating to  indemnification  and
contribution  may be limited by applicable  federal,  state, or other securities


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<PAGE>

laws, or the public policy underlying such laws.

               (v) The consolidated financial statements,  audited and unaudited
(including the notes  thereto)  included in the  Registration  Statement and the
Prospectus present fairly the consolidated financial position of the Company and
its  subsidiaries  as of the dates  indicated and the results of operations  and
cash flows of the Company and its subsidiaries for the periods  specified.  Such
consolidated   financial  statements  have  been  prepared  in  conformity  with
generally  accepted   accounting   principles  applied  on  a  consistent  basis
throughout the periods  reflected  except as may be otherwise  stated therein or
disclosed in the Prospectus. The financial statement schedules, if any, included
in the Registration  Statement and the Prospectus present fairly the information
required to be stated therein. The selected financial, pro forma and statistical
data included in the  Registration  Statement and the Prospectus are accurate in
all material  respects and present fairly the information shown therein and have
been  prepared on a basis  consistent  with that of the  audited  and  unaudited
consolidated  financial  statements included or incorporated by reference in the
Registration Statement and the Prospectus.

               (vi) The  Company is a Florida  corporation  duly  organized  and
validly existing, and has active status, under the laws of the State of Florida,
with the requisite  corporate  power and authority under such laws to own, lease
and  operate  its  properties  and conduct  its  business  as  described  in the
Registration Statement and the Prospectus. The sole subsidiary of the Company is
an entity duly organized,  validly  existing and in active status under the laws
of the State of Florida with the requisite  corporate  power and authority under
such laws to own,  lease and operate its  properties and conduct its business as
described in the Prospectus.

               (vii) The Company is duly  registered with the Board of Governors
of the Federal  Reserve as a bank  holding  company  under  applicable  law; the
deposit accounts of Peoples State Bank (the "Bank"), a subsidiary of the Company
that  conducts  business  as a state  bank are  insured by the  Federal  Deposit
Insurance  Corporation (the "FDIC"), up to the maximum allowable limits thereof.
The Company has all such corporate power,  authority,  authorization,  approvals
and  orders as may be  required  to enter  into this  Agreement  and the  Escrow
Agreement,  to carry out the provisions and conditions thereof, and to issue and
sell the Shares.

               (viii) The Warrants have been duly  authorized and validly issued
and are valid and binding obligations of the Company.  The Shares have been duly
authorized  for issuance and sale pursuant to this  Agreement and the Prospectus
and,  when issued and  delivered  by the  Company  against  payment  therefor in
accordance  with the terms of this Agreement and as described in the Prospectus,
will be validly issued,  shall be valid and binding  obligations of the Company,
and shall not have been issued in violation of any preemptive or other rights to
purchase Common Stock. No further  approval or authorization of any shareholder,
the  Company's  Board of  Directors,  or any  other  party is  required  for the
purchase,  sale or  exercise  of the  Warrants,  or the  issuance  of the Shares
pursuant to this Agreement and as described in the Prospectus.

               (ix) The  purchase,  sale and  exercise of the  Warrants  and the
issuance of the Shares by the Company, the compliance by the Company with all of
the provisions of this Agreement and the Escrow Agreement,  and the consummation


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<PAGE>

of the transactions  herein  contemplated  will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,  any
indenture,  loan  agreement,  mortgage,  deed of  trust or  other  agreement  or
instrument  to which the  Company  or any of its  subsidiaries  is a party or by
which  any of them is bound or to which  any of  their  respective  property  or
assets is subject,  nor will such action  result in any violation of any statute
or any order,  rule or  regulation of any court or  governmental  agency or body
having  jurisdiction  over  the  Company  or its  subsidiaries  or any of  their
properties,  which conflict  breach,  default or violation  would  reasonably be
expected,  either  individually or in the aggregate,  to have a material adverse
effect  on  the  business,  condition  (financial  or  otherwise),   results  of
operations or cash flows of the Company and its subsidiaries taken as a whole (a
"Material  Adverse Effect");  and no consent,  approval,  authorization,  order,
license, certificate,  permit, registration or qualification of or with any such
court or other  governmental  agency or body is  required  to be obtained by the
Company for the purchase, sale and exercise of the Warrants and the issuance and
sale of the  Shares  or the  consummation  by the  Company  of the  transactions
contemplated   by  this   Agreement,   except  for  such  consents,   approvals,
authorizations, licenses, certificates, permits, registrations or qualifications
as have already been obtained, or as may be required under the 1933 Act or state
securities laws.

               (x) All offers and sales of the Warrants  were made pursuant to a
registration  statement filed pursuant to the 1933 Act or pursuant to exemptions
from the registration provisions of the 1933 Act and in compliance with the 1933
Act Regulations and all other  applicable  state securities laws or regulations.
Except  pursuant to this Agreement,  the Company knows of no outstanding  claims
for finder's, origination,  underwriting or placement agent fees with respect to
prior offers or sales of the  securities  of the Company or with respect to this
Offering.

         (b) Any certificate signed by any authorized officer of the Company and
delivered  to the Agent or to counsel for the Agent  pursuant to this  Agreement
shall be deemed a representation  and warranty by the Company to the Agent as to
the matters covered thereby.

         (c) The Agent represents and warrants to the Company that:

               (i) The Agent is registered as a broker-dealer with the NASD.

               (ii) The Agent is validly  existing  as a  corporation  under the
laws of its  jurisdiction  of  incorporation,  with  full  corporate  power  and
authority to provide the services to be furnished to the Company hereunder.

               (iii)  This  Agreement  has been duly  authorized,  executed  and
delivered by the Agent and, when duly executed by the Company,  will  constitute
the valid and binding  agreement of the Agent  enforceable  against the Agent in
accordance  with  its  terms,  except  in all  cases  to  the  extent  that  (A)
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  and  remedies  generally  or  the  rights  of  creditors  or
registered  broker-dealers  whose  accounts may be  protected by the  Securities
Investor Protection Corporation; (B) the availability of the equitable remedy of
specific  performance and injunctive  relief is subject to the discretion of the
court before which the proceedings may be brought; and (C) the enforceability of
the  provisions  hereof  relating to  indemnification  and  contribution  may be


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limited by applicable  federal,  state or other  securities  laws, or the public
policy underlying such laws.

               (iv) The Agent and,  to the  Agent's  Knowledge,  its  employees,
agents  and  representatives  who shall  perform  any of the  services  required
hereunder to be performed by the Agent,  shall be duly authorized and shall have
all licenses,  approvals and permits necessary to perform such services, and the
Agent is a registered selling agent in the jurisdictions in which the Company is
relying on such registration for the sale of the Shares.

               (v) The  execution  and delivery of this  Agreement by the Agent,
the  fulfillment  of the terms  set forth  herein  and the  consummation  of the
transactions  contemplated hereby shall not violate or conflict with the charter
or bylaws of the Agent or violate,  conflict  with or constitute a breach of, or
default  (or an event  which,  with  notice  or lapse  of time,  or both,  would
constitute a default)  under,  any agreement,  indenture or other  instrument by
which the Agent is bound or under any governmental license or permit or any law,
administrative  regulation,  authorization,  approval or order or court  decree,
injunction or order,  which breach,  default or violation  could have a material
adverse effect on the condition (financial or otherwise),  operations, business,
assets or  properties  of the Agent or its  ability to perform  its  obligations
under this Agreement.

               (vi) No action or  proceeding  against the Agent  before the SEC,
the NASD,  any state  securities  commission,  or any state or federal  court is
pending  or,  to  the  Agent's  Knowledge,  threatened  concerning  the  Agent's
activities as a broker-dealer  which could have a material adverse effect on the
condition (financial or otherwise),  operations,  business, assets or properties
of the Agent or its ability to perform its obligations under this Agreement.

     Section 3. Certain Covenants.
                -----------------

         (a) The Company covenants with the Agent as follows:

               (i) The Company  will not at any time file or make any  amendment
to the Registration  Statement,  the Preliminary Prospectus or the Prospectus of
which the Agent shall not have  previously been advised and have previously been
furnished  a copy,  or to  which  the  Agent  or  counsel  for the  Agent  shall
reasonably object.

               (ii) The Company will notify the Agent,  promptly  after it shall
receive  notice  thereof,  of the  time  when  the  contemplated  post-effective
amendment  to the  Registration  Statement  has  become  effective  or when  any
supplement to the Prospectus has been filed.

               (iii)  The  Company   will  prepare  and  timely  file  with  the
Commission  under  Rule  424(b)  of the 1933 Act  Regulations,  if  required,  a
Prospectus   containing   information   previously   omitted   at  the  time  of
effectiveness  of  the  Registration  Statement,  including  any  post-effective
amendment  thereto,  in  reliance  on Rule 430A of the 1933 Act  Regulations  or
otherwise.

               (iv) The  Company  will advise the Agent,  promptly  after it has
received  notice  thereof,  of any  comments  of the  SEC  with  respect  to the
Post-Effective Amendment, of any request of the SEC for further amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information,  or of the  issuance  by the SEC of any stop order  suspending  the


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effectiveness of the Registration  Statement, or the use of the Prospectus or of
the institution or threat of any proceedings for that purpose;  the Company will
provide the Agent with copies of all  correspondence  related  thereto;  and the
Company will use its best efforts to prevent the issuance of any such stop order
preventing  or  suspending  the use of the  Prospectus  and to obtain as soon as
possible the lifting thereof, if issued.

               (v) The  Company  will  deliver or cause to be  delivered  to the
Agent,  without  charge,  from time to time during the period  commencing on the
date  hereof  and  continuing  until  the  earlier  of (A)  the  termination  or
expiration of the Offering or (B) the termination of the employment of the Agent
pursuant to Section 8 of this Agreement (the "Offering Period"),  such number of
copies of the Registration  Statement,  Preliminary Prospectus or Prospectus (as
supplemented  or  amended)  as the Agent may  reasonably  request.  The  Company
consents to the use of the Preliminary Prospectus and Prospectus by the Agent in
connection  with the  Offering  and for such  period of time  thereafter  as the
Prospectus is required by law to be delivered in connection therewith.

               (vi) The  Company  will use its best  efforts to comply  with the
1933 Act and the 1933 Act  Regulations  so as to permit  the  completion  of the
transactions  contemplated in this Agreement and in the  Prospectus.  If, at any
time during the Offering Period, or when a Preliminary  Prospectus or Prospectus
is required by the 1933 Act to be delivered in  connection  with offers or sales
of the Shares,  any event shall occur or condition exist as a result of which it
is necessary,  in the reasonable opinion of counsel for the Agent or counsel for
the Company, to amend or supplement the Prospectus in order that the Preliminary
Prospectus or Prospectus will not include an untrue statement of a material fact
or omit to state a  material  fact  necessary  in  order to make the  statements
therein not misleading in the light of the circumstances existing at the time it
is delivered,  or if it shall be necessary,  in the reasonable opinion of either
such  counsel,  at  any  such  time  to  amend  the  Preliminary  Prospectus  or
Prospectus,  or amend or supplement the Preliminary  Prospectus or Prospectus in
order  to  comply  with  the  requirements  of the  1933  Act or  the  1933  Act
Regulations,  the Company will promptly  prepare such amendment or supplement as
may be  necessary  to correct  such untrue  statement or omission or to make the
Preliminary Prospectus or Prospectus comply with such requirements.

               (vii) The Company will use its commercially reasonable efforts to
qualify  the  Shares  for  offering  and sale,  or to  exempt  the  Shares  from
registration,  under the  applicable  securities  laws of such  states and other
jurisdictions  as the  Agent  may  reasonably  designate  and to  maintain  such
qualifications  or  exemptions  in effect for a period of not less than one year
from the  Effective  Date;  provided,  however,  that the  Company  shall not be
obligated  to file any general  consent to service of process or to qualify as a
foreign  corporation in any  jurisdiction  in which it is not so qualified or to
subject itself to taxation in respect of doing business in any  jurisdiction  in
which it is not otherwise so subject.  The Company will file such statements and
reports as may be required by the laws of each  jurisdiction in which the Shares
have been qualified or exempted as above provided.

               (viii)  During the term of the  Offering,  the  Company  will not
issue any press releases or other communications directly or indirectly and will
hold no press conferences with respect to the Company,  the financial condition,
results  of  operations,  business  properties,  assets  or  liabilities  of the


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Company, or the offering of the Shares,  without the prior written notice to the
Agent, except as otherwise required by law.

         (b) The Agent  covenants with the Company that the Agent shall remain a
registered  selling  agent in all such  jurisdictions  in which the  Company  is
relying on such  registration  for the sale of the Shares  until the Offering is
consummated or terminated.

     Section 4. Payment of Expenses.
                -------------------

     The Company  covenants  and agrees with the Agent that the Company will pay
or cause to be paid (directly or by reimbursement) all of the obligations of the
Company under this Agreement, including (a) the preparation, printing and filing
of  the  Post-Effective   Amendment  and  the  Prospectus  (including  financial
statements and exhibits and any or all documents related thereto), as originally
prepared and as amended, and any amendments or supplements thereto, and the cost
of furnishing  copies thereof to the Agent; (b) the issuance and delivery of the
Shares,  including any transfer taxes payable upon the sale of such  securities;
(c) the fees and disbursements of the Company's counsel and accountants; (d) SEC
and NASD filing fees; (e) the  qualification  of the Shares under the applicable
state securities laws; (f) itemized and  out-of-pocket  expenses incurred by the
Agent in accordance with the terms of its engagement  letter with the Agent; (g)
the fees and  expenses of the Escrow Agent in  accordance  with the terms of the
Escrow  Agreement;  and (h) all other costs  incident to the  performance of the
Company's obligations hereunder.

     Full payment of Agent's expenses (as provided for in the engagement  letter
with the Agent) remaining unpaid shall be made in same-day funds at each Closing
or, if the Offering is not  completed or is  terminated  for any reason,  within
five business days of receipt by the Company of a written request from the Agent
for reimbursement of expenses.

     Section 5. Conditions of Agent's Obligations.  The obligations of the Agent
                ---------------------------------
pursuant to this  Agreement  are subject to the accuracy of the  representations
and  warranties  of the  Company  contained  herein  or in  certificates  of the
officers of the Company delivered  pursuant to the provisions  hereof, as of the
date hereof,  and each Closing  Time, to the  performance  by the Company of its
obligations hereunder and to the following further conditions, except the extent
waived in writing by the Agent:

         (a) At each Closing Time, the Agent shall have received:

               (i) The  favorable  opinion,  dated as of each Closing  Time,  of
Igler &  Dougherty,  P.A.,  counsel  for the  Company,  in  form  and  substance
reasonably satisfactory to counsel for the Agent,  substantially in the form set
forth in Exhibit A.

               (ii) A letter  from  Hacker,  Johnson  & Smith,  P.A.,  dated the
effective date of the Post-Effective  Amendment,  and updated as of each Closing
Time,  addressed  to the Agent in the form  reasonably  approved  by the  Agent,
containing  statements  and  information  of the  type  ordinarily  included  in
accountant's  "comfort  letters"  to  underwriters  and sales  agents  delivered
according  to  Statement  of  Financial  Accounting  Standards  No.  72 (or  any
successor  bulletin),  with respect to the audited financial  statements and the


                                       9
<PAGE>

other financial information in the Registration Statement and the Prospectus.

         (b) At each  Closing  Time:  (i)  the  Registration  Statement  and the
Prospectus, as may then be amended or supplemented,  shall not contain an untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein or necessary to make the statements therein not misleading;  (ii)
there shall not have been, since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition (financial
or  otherwise),  earnings,  business  affairs  or assets of thc  Company  or the
Subsidiaries,  whether or not arising in the ordinary course of business;  (iii)
no action,  suit or  proceeding  at law or in equity shall be pending or, to the
Knowledge of the Company,  threatened against the Company or any Subsidiary that
would be  required  to be set forth in the  Prospectus  other  than as set forth
therein and no proceedings shall be pending or, to the Knowledge of the Company,
threatened against the Company or any Subsidiary before or by any federal, state
or other  commission,  board or  administrative  agency  wherein an  unfavorable
decision,  ruling or finding  could  reasonably  be  expected to have a Material
Adverse Effect,  other than set forth in the Prospectus;  (iv) the Company shall
have complied,  in all material respects,  with all agreements and satisfied all
conditions  on its part to be performed or satisfied at or prior to each Closing
Time, as applicable; (v) the other representations and warranties of the Company
set forth in Section 2(a) of this Agreement shall be accurate in all respects as
though expressly made at and as of each Closing Time, as applicable; and (vi) no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding  for that purpose shall have been initiated or, to
the  Knowledge  of the  Company,  threatened  by the SEC or any bank  regulatory
agency. At each Closing Time, the Agent shall have received a certificate of the
President and of the Chief  Financial  Officer of the Company,  dated as of each
Closing Time, as applicable, to such effect.

         (c) At each  Closing  Time,  counsel  for the  Agent  shall  have  been
furnished with all such documents, certificates and opinions as they may request
for the  purpose  of  enabling  them to pass upon the  issuance  and sale of the
Shares as contemplated in this Agreement and the matters  referred to in Section
5 of this Agreement,  and in order to evidence the accuracy and  completeness of
any of the  representations,  warranties  or  statements  of  the  Company,  the
performance of any of the covenants of the Company, or the fulfillment of any of
the conditions herein contained;  and all proceedings taken by the Company at or
prior to each Closing Time in connection  with the  authorization,  issuance and
sale of the Shares as  contemplated  in this Agreement  shall be satisfactory in
form and substance to the Agent and its counsel.

         (d) The Company shall have paid, or made  arrangements  satisfactory to
the Agent for the payment of, all such  expenses as may be required by Section 4
hereof.

         (e) The Shares shall have been qualified or registered for sale, or are
subject to an available exemption from such qualification or registration, under
the "blue  sky" or  securities  laws of such  jurisdictions  as shall  have been
agreed to by the Agent and the Company,  and the Offering  contemplated  by this
Agreement shall have been cleared by the NASD.


                                       10
<PAGE>


     If any of the  conditions  specified  in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be  terminated by the Agent on notice to the Company at any time at or prior
to the applicable  Closing Time, or, if the Agent so elects, the Agent may waive
in writing any such conditions  that have not been fulfilled,  or may extend the
time of their  fulfillment.  If the Agent  terminates this Agreement as provided
herein,  such termination  shall be without  liability of any party to any other
party,  except as provided in Section 4.  Notwithstanding  any such termination,
the  provisions  of Sections 4, 6, 7 and 11 of this  Agreement  shall  remain in
effect.

     Section 6. Indemnification.
                ---------------

         (a) The Company agrees to indemnify and hold harmless each of the Agent
and the  officers  and  directors  of the Agent,  and each  person,  if any, who
controls  the Agent  within the meaning of Section 15 of the 1933 Act or Section
20(a) of the 1934 Act, against any loss,  liability,  claim, damage, and expense
whatsoever  (which shall  include,  but not be limited to,  amounts  incurred in
investigating,  preparing  or  defending  against any  litigation,  commenced or
threatened,  or any claim or  investigation  whatsoever  and any and all amounts
paid in settlement of any claim or  litigation),  as and when incurred,  arising
out of,  based upon or in  connection  with (i) any untrue  statement or alleged
untrue statement of a material fact or any omission or alleged omission to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements therein in light of the circumstances under which they were made, not
misleading,  contained in: (A) the Registration Statement and the Prospectus (as
from time to time amended and  supplemented),  or in any amendment or supplement
thereto or in any document  incorporated by reference therein, or required to be
delivered with the  Prospectus;  or (B) in any  application or other document or
communication  (collectively referred to as an "application")  executed by or on
behalf of the  Company  or based upon  written  information  furnished  by or on
behalf of the Company filed in any  jurisdiction  in order to qualify the Shares
under  the Blue Sky or  securities  laws  thereof  or filed  with the SEC or any
electronic  trading  system or  securities  exchange,  unless such  statement or
omission  or alleged  statement  or omission  was made in  reliance  upon and in
conformity with written information concerning the Agent, or the compensation of
the Agent,  furnished to the Company by the Agent expressly for inclusion in any
Prospectus, or in any amendment or supplement thereto, or in any application, as
the case may be, or (ii) any breach of any representation, warranty, covenant or
agreement of the Company contained in this Agreement;  provided,  however,  that
the indemnity in this  paragraph  (a): (x) shall not apply to any  settlement by
the Agent or any person entitled to  indemnification  hereunder effected without
the prior written consent of the Company (not to be unreasonably withheld);  (y)
shall not apply to the extent that any loss, claim, damage or liability is found
in a final non-applicable  judgment by a court of competent jurisdiction to have
resulted directly from the Agent's willful  misconduct or gross negligence;  and
(z) shall not apply to any suit,  action or proceeding  initiated by the Company
against the Agent to enforce the terms of this  Agreement.  For purposes of this
section,  the term "expense"  shall include,  but not be limited to,  reasonable
counsel fees and costs,  court costs,  out-of-pocket  costs and compensation for
the  time  spent by the  Agent's  directors,  officers,  employees  and  counsel
according to his or her normal hourly billing rates. The foregoing  agreement to
indemnify  shall be in addition to any liability the Company may otherwise  have
to the Agent or the persons  entitled  to the  benefit of these  indemnification
provisions.



                                       11
<PAGE>

         (b) The Agent agrees to indemnify  and hold  harmless the Company,  its
directors and officers, and each person, if any, who controls the Company within
the  meaning of  Section  15 of the 1933 Act or  Section  20(a) of the 1934 Act,
against any and all loss, liability,  claim, damage and expense described in the
indemnity contained in subsection (a) above, as incurred,  but only with respect
to  (i)  untrue  statements  or  omissions,  or  alleged  untrue  statements  or
omissions,  of a material  fact made in  reliance  upon and in  conformity  with
written information about the Agent, or the compensation of the Agent, furnished
to the Company by the Agent expressly for inclusion in the  Prospectus;  or (ii)
any breach of any representation,  warranty,  covenant or agreement of the Agent
contained  in this  Agreement;  provided,  however,  that the  indemnity in this
paragraph  (b):  (x) shall not apply to any  settlement  by the  Company  or any
person entitled to indemnification  hereunder effected without the prior written
consent of the Agent (not to be unreasonably withheld);  and (y) shall not apply
to any suit, action or proceeding  initiated by the Agent against the Company to
enforce the terms of this Agreement.

         (c) An indemnified  party shall give prompt notice to the  indemnifying
party if any action,  suit,  proceeding or investigation is commenced in respect
of which  indemnity  may be  sought  hereunder,  but  failure  to so  notify  an
indemnifying party shall not relieve the indemnifying party from its obligations
to indemnify  hereunder,  except to the extent that the  indemnifying  party has
been prejudiced in any material respect by such failure.  If it so elects within
a reasonable time after receipt of such notice, an indemnifying party may assume
the defense of such  action,  including  the  employment  of counsel  reasonably
satisfactory  to the  indemnified  party  and  payment  of all  expenses  of the
indemnified  party in connection with such action.  Such indemnified party shall
have the right to employ  its own  counsel  in any such  case,  but the fees and
expenses  of such  counsel  shall be at the  expense of such  indemnified  party
unless the  employment of such counsel shall have been  authorized in writing by
the  indemnifying  party in  connection  with the  defense of such action or the
indemnifying   party  shall  not  have  promptly  employed  counsel   reasonably
satisfactory  to such  indemnified  party or such  indemnified  party shall have
reasonably  concluded that there may be one or more legal defenses  available to
it that are different from or additional to those available to the  indemnifying
party,  in any of which  events  such  fees and  expenses  shall be borne by the
indemnifying party and the indemnifying party shall not have the right to direct
the defense of such action on behalf of the indemnified  party. The indemnifying
party shall be liable for any  settlement of any claim  against the  indemnified
party  (or  its  directors,  officers,  employees,   affiliates  or  controlling
persons),  made with the  indemnifying  party's written  consent,  which consent
shall not be unreasonably  withheld.  The indemnifying  party shall not, without
the written  consent of the  indemnified  party,  settle or compromise any claim
against  the  indemnifying  party  based upon  circumstances  giving  rise to an
indemnification  claim  against the  indemnifying  party  hereunder  unless such
settlement  or  compromise  provides  that the  indemnified  party and any other
indemnified parties shall be unconditionally  and irrevocably  released from all
liability in respect to such claim.

         (d) In order to provide for just and equitable contribution, if a claim
for indemnification pursuant to these indemnification  provisions is made but it
is found in a final  judgment  by a court that such  indemnification  may not be
enforced in such case,  even though the express  provisions  hereof  provide for
indemnification in such case, then the Company,  on the one hand, and the Agent,
on the other  hand,  shall  contribute  to the  amount  paid or  payable by such
indemnified party as a result of such loss, liability, claim, damage and expense
in such proportion as is appropriate to reflect the relative  benefits  received
by the  Company,  on the one hand,  and the Agent,  on the other hand,  from the
Offering,  and also the relative fault of the Company,  on the one hand, and the


                                       12
<PAGE>

Agent, on the other hand, in connection  with the statements,  acts or omissions
that resulted in such loss,  liability claim, damage and expense,  and any other
relevant  equitable  considerations  shall  also  be  considered.  The  relative
benefits received by the Company on the one hand and the Agent on the other hand
shall be deemed to be in the same proportions as the total net proceeds from the
Offering  received by the Company  bear to the total fees  received by the Agent
under this Agreement.  The relative fault of the Company on the one hand and the
Agent on the other hand shall be determined by reference to, among other things,
whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied  by the  Company  or by the Agent  and the  parties'  relative  intent,
Knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.

     The Company and the Agent agree that it would not be just and  equitable if
contribution  pursuant to this Section 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 the immediately  preceding paragraph.  The amount
paid or  payable  by an  indemnified  party as a result of the  losses,  claims,
damages,  liabilities  or  judgments  referred to in the  immediately  preceding
paragraph  shall be deemed to include,  subject to the  limitations set forth in
this Section, any legal or other expenses reasonably incurred by the indemnified
party in connection with investigating or defending any such action or claim. No
person  found  liable for  fraudulent  misrepresentation  or  omission  shall be
entitled  to  contribution  from any  person  who is not found  liable  for such
fraudulent misrepresentation or omission.

         (e) The indemnity and contribution  agreements  contained herein are in
addition to any liability that the Company may otherwise have to the Agent.

     Section 7. Representations,  Warranties and Agreements to Survive Delivery.
                ---------------------------------------------------------------
The representations, warranties, indemnities, agreements and other statements of
the Company or its officers,  directors,  employees and agents, and of the Agent
or its officers, directors,  employees and agents, set forth in or made pursuant
to this Agreement, will remain operative and in full force and effect regardless
of any investigation  made by or on behalf of the or the Company,  respectively,
and will survive delivery of and payment for the Shares.

     Section 8. Termination of Agreement.
                ------------------------

         (a) The Agent may terminate this  Agreement,  by notice to the Company,
at any time at or prior to any  Closing  Time (i) if there has  been,  since the
respective  dates  as of which  information  is  given  in the  Prospectus,  any
material  adverse change in the condition  (financial or  otherwise),  earnings,
business   affairs  or  business   prospects  of  the  Company  or  any  of  its
subsidiaries, whether or not arising in the ordinary course of business; or (ii)
if there has occurred  any outbreak or  escalation  of existing  hostilities  or
other  national or  international  calamity or crisis the effect of which on the
financial  markets  of the United  States is such as to make it, in the  Agent's
reasonable  judgment,   impracticable  to  market  the  Shares  or  enforce  the
subscriptions to purchase such securities;  or (iii) if trading generally on the
New York Stock Exchange or in the over-the-counter market has been suspended, or
minimum  or maximum  prices  for  trading have been fixed, or maximum ranges for


                                       13
<PAGE>

prices for securities  have been  required,  by such exchange or by order of the
SEC, NASD or any other governmental authority with appropriate jurisdiction over
such  matters;  or (iv) if a  banking  moratorium  has been  declared  by either
federal or Florida  authorities;  or (v) if there shall have been such  material
and substantial  change in the market for securities in general or in political,
financial or economic  conditions as in the Agent's reasonable judgment makes it
inadvisable  to proceed with the  Offering,  or the issuance and delivery of the
Shares  on the  terms  contemplated  by the  Prospectus;  or (vi)  if the  Agent
reasonably  determines (which  determination  shall be in good faith) that there
has not been  satisfactory  disclosure  of all  relevant  financial  information
relating  to the  Company in the  Company's  disclosure  documents  and that the
issuance of the Shares is inadvisable  given such  disclosures;  or (vii) if the
Company  shall have failed,  refused or been unable,  on or prior to any Closing
Time, to perform any agreement on its part to be performed, or because any other
condition of the Agent's  obligations  hereunder required to be fulfilled by the
Company is not fulfilled.

     (b) If  this  Agreement  is  terminated  pursuant  to  this  Section,  such
termination shall be without  liability of any party to any other party,  except
to  the  extent  provided  in  Section  4  hereof.   Notwithstanding   any  such
termination,  the provisions of Sections 4, 6, 7 and 11 of this Agreement hereof
shall remain in effect.

     Section  9.  Notices.  All  notices  and other  communications  under  this
                  -------
Agreement  shall be in  writing  and shall be deemed to have been duly  given if
delivered,  mailed or  transmitted  by any standard  form of  telecommunication.
Notices shall be addressed as follows:

                         If to the Agent:

                                          Kendrick, Pierce Securities, Inc.
                                          324 South Hyde Park Avenue, Suite 202
                                          Tampa, Florida 33606
                                          Attention: Russell L. Hunt

                         with a copy to:

                                          Powell, Goldstein, Frazer & Murphy LLP
                                          191 Peachtree Street, N.E.
                                          Suite 1600
                                          Atlanta, GA  30303
                                          Attention:  Katherine M. Koops

                         If to the Company:

                                          PSB BancGroup, Inc.
                                          500 South First Street
                                          Lake City, FL  32025
                                          Attention:     Robert W. Woodard,
                                                         President  and  Chief
                                                         Executive Officer

                         with a copy to:

                                          Igler & Dougherty, P.A.
                                          1501 Park Avenue East
                                          Tallahassee, FL  32301
                                          Attention:  Richard Pearlman



                                       14
<PAGE>

     Section 10.  Parties.  This Agreement is made solely for the benefit of the
                  -------
Agent and the  officers,  directors,  employees,  agent and counsel of the Agent
specified  in Section 6, the Company  and, to the extent  expressed,  any person
controlling  the  Company  or  the  Agent,  and  their   respective   executors,
administrators,  successors  and assigns,  and no other person shall  acquire or
have any right under or by virtue of this  Agreement.  The term  "successors and
assigns" shall not include any purchaser of the Shares.

     Section 11. Arbitration.  Any claims,  controversies,  demands, disputes or
                 -----------
differences  between or among the  parties  hereto or any persons  bound  hereby
arising out of, or by virtue of, or in connection with, or otherwise relating to
this Agreement  shall be,  submitted to and settled by arbitration  conducted in
Lake  City,  Florida  before  one or three  arbitrators,  each of whom  shall be
knowledgeable  in the  field of  securities  law and  investment  banking.  Such
arbitration  shall  otherwise be conducted in  accordance  with the rules of the
American Arbitration Association.  The parties hereto agree to share equally the
responsibility  for all fees of the arbitrators,  abide by any decision rendered
as final and  binding,  and waive the right to appeal the  decision or otherwise
submit the dispute to a court of law for a jury or non-jury  trial.  The parties
hereto  specifically agree that neither party may appeal or subject the award or
decision  of any such  arbitrator  to appeal or review in any court of law or in
equity or in any other tribunal,  arbitration system or otherwise. Judgment upon
any award  granted  by such  arbitrator  may be  enforced  in any  court  having
jurisdiction thereof.

     Section 12. Governing Law and Time. This Agreement shall be governed by the
                 ----------------------
laws of the State of Florida. Specified times of the day refer to Tampa, Florida
time.

     Section 13.  Counterparts.  This  Agreement  may be executed in one or more
                  ------------
counterparts,  and when a counterpart has been executed by each party,  all such
counterparts taken together shall constitute one and the same agreement.




                                       15
<PAGE>


     If the foregoing correctly sets forth the parties' understanding, please so
indicate in the space provided below for that purpose,  whereupon this Agreement
will constitute a binding agreement between the Company and the Agent.

                              PSB BANCGROUP, INC.

                              By: /s/ Robert W. Woodard
                                  ---------------------
                                  Name:    Robert W. Woodward
                                  Title:   President and Chief Executive Officer


     CONFIRMED  AND  ACCEPTED  this  12th day of June,  2002,  on  behalf of the
undersigned.

                              KENDRICK, PIERCE SECURITIES, INC.

                              By: /s/Russell L. Hunt
                                  ------------------
                                  Name:    Russell L. Hunt
                                           ---------------
                                  Title: ManagingDirector
                                         ----------------











                                       16
<PAGE>


                                    EXHIBIT A

The  opinion of  counsel to the  Company  to be  delivered  pursuant  to Section
5(a)(i)  of  the  Sales  Agency  Agreement  (the  "Agreement")  shall  be to the
following effect.  All defined terms shall have the meanings ascribed to them in
the Agreement.

     1.  The Company is a  corporation,  validly  existing and in active  status
under  the laws of the  State of  Florida  with  requisite  corporate  power and
authority to own,  lease and operate its  properties and conduct its business as
described  in the  Prospectus.  Each of the  Company's  subsidiaries  is validly
existing  and in  good  standing  or in  active  status  under  the  laws of its
respective  jurisdiction of  incorporation,  with requisite  corporate power and
authority to own, lease,  and operate its respective  properties and conduct its
business as described in the Prospectus.

     2.  All of the issued and  outstanding  Warrants have been duly  authorized
and validly issued and there are no statutory,  contractual or other preemptive,
preferential or other rights to subscribe for or purchase any Warrants or shares
of capital stock of the Company.

     3.  When issued  against  payment of the agreed  consideration  therefor in
accordance with the Agreement,  the Shares will be valid and binding obligations
of the Company free of any preemptive, preferential or other rights to subscribe
for or  purchase  the  Shares,  and will be free and clear of any  lien,  claim,
security  interest or encumbrance,  or of any restriction on transfer imposed by
the Company, or pursuant to federal or state securities laws or regulations.

     4.  All  offers  and  sales  by the  Company  of the  Warrants  were at all
relevant  times  duly   registered   under  or  exempt  from  the   registration
requirements  of, and were made in compliance with the requirements of, the 1933
Act, and were duly  registered  under or the subject of an  available  exemption
from the registration requirements of any applicable "blue sky" laws.

     5.  The Company has the requisite corporate power and authority to execute,
deliver and perform the  Agreement and the Escrow  Agreement and to issue,  sell
and deliver the Shares to be sold by it as provided  therein;  and the Agreement
and the Escrow  Agreement have been duly  authorized,  executed and delivered by
the Company,  and each constitutes a legal valid, and binding  obligation of the
Company and is  enforceable  against the Company in  accordance  with its terms,
except in all cases to the  extent  that (i)  enforceability  may be  limited by
applicable  bankruptcy,  insolvency,  reorganization,  moratorium or similar law
affecting the  enforcement  of creditors'  rights and remedies  generally;  (ii)
enforceability  may be limited  by  general  equity  principles,  regardless  of
whether such  enforceability  is considered in a proceeding in equity or at law;
and (iii) the enforceability of the provisions  relating to indemnification  and
contribution  may be limited by applicable  federal,  state, or other securities
laws, or the public policy underlying such laws.

     6.  No  stop  order  suspending  the   effectiveness  of  the  Registration
Statement  has been issued under the 1933 Act and no  proceedings  therefor have
been instituted or, to counsel's knowledge, are pending or threatened by the SEC
or any bank regulatory agency.


                                       A-1
<PAGE>

     Counsel shall also confirm that it has  participated  in the preparation of
the Registration  Statement and the Prospectus and that to counsel's  knowledge,
there is nothing in the Registration Statement including the Prospectus,  or any
amendment or supplement thereto,  including the information incorporated therein
by reference (except for the financial statements,  schedules notes to financial
statements and other financial,  accounting or statistical data included therein
or omitted  therefrom),  at the dates  thereof  and at the  Closing  Time,  that
included or includes an untrue statement of material fact or omitted or omits to
state a material  fact  necessary in order to make the  statements  therein,  in
light of the  circumstances  under  which they were made,  not  misleading  with
respect to the Company and its subsidiary.













                                      A-2