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                                                                     EXHIBIT 4.2


THIS OPTION AGREEMENT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS OPTION
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE
PROVISIONS OF THE SECURITIES ACT OR AN OPINION OF COUNSEL IS OBTAINED STATING
THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION.


HOLDER:  AJG FINANCIAL SERVICES, INC.        GRANT DATE:  DECEMBER 31, 2001

                                             EXPIRATION DATE: DECEMBER 31, 2004


                          INTREPID CAPITAL CORPORATION

                       OPTION AGREEMENT FOR THE PURCHASE
                       OF SHARES OF INTREPID COMMON STOCK


         IN ACCORDANCE WITH THE INVESTMENT AGREEMENT (AS HEREINAFTER DEFINED),
FOR VALUE RECEIVED IN CONNECTION THEREWITH AND HEREUNDER, INTREPID CAPITAL
CORPORATION, a Delaware corporation located at 3652 South Third Street, Suite
200, Jacksonville Beach, Florida 32250 (the "Company"), hereby certifies that
AJG FINANCIAL SERVICES, INC., a Delaware corporation located at The Gallagher
Center, Two Pierce Place, Itasca, Illinois 60143-3141 (the "Holder"), or the
Holder's successors and permitted assigns, is hereby granted the option
(hereinafter referred to as the "Option"), subject to the provisions of this
Option Agreement, to purchase from the Company, during the Exercise Period (as
hereinafter defined), that number of validly issued, fully paid and
non-assessable shares of the common stock, par value $.01 per share, of the
Company (the "Intrepid Common Stock") set forth in Section 1.1 hereof at a
price (the "Exercise Price") per Option Share (as hereinafter defined) equal to
(i) $3.00 during the first year of the Exercise Period, (ii) the greater of (A)
seventy-five percent (75%) of the average Closing Price (as hereinafter
defined) for the ninety (90) consecutive Trading Days (as hereinafter defined)
immediately preceding the first anniversary of the Grant Date (as set forth
above), and (B) $3.00 during the second year of the Exercise Period, and (iii)
the greater of (A) seventy-five percent (75%) of the average Closing Price for
the ninety (90) consecutive Trading Days immediately preceding the second
anniversary of the Grant Date, and (B) $3.00 during the third year of the
Exercise Period. This Option Agreement is the Option Agreement contemplated by
that certain Convertible Note Agreement and that certain Investment Agreement
(the "Investment Agreement"), each of even date herewith, between the Company
and the Holder.


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         For purposes hereof, the term "Closing Price" shall mean the daily
closing sales price on any Trading Day or, if no such closing sales price shall
be reported on such Trading Day, then the average between the closing bid and
closing asked prices on any such Trading Day for, one share of Intrepid Common
Stock as reported on The Nasdaq National Market System if the Intrepid Common
Stock is listed on The Nasdaq National Market System or, if the Intrepid Common
Stock is not then listed on The Nasdaq National Market System, then as reported
on The Nasdaq Small Cap Market or, if the Intrepid Common Stock is not then
listed on The Nasdaq National Market System or The Nasdaq Small Cap Market,
then as reported on the OTC Bulletin Board or, if the Intrepid Common Stock is
not then listed on The Nasdaq National Market System, The Nasdaq Small Cap
Market or the OTC Bulletin Board, then as reported on the primary "national
securities exchange" or "national market system" (as such terms are used in the
Securities Exchange Act of 1934, as amended) on which the Intrepid Common Stock
is then quoted, listed or reported or, if there are no daily closing sales
price or closing bid and closing asked prices for the Intrepid Common Stock
reported on any of the foregoing, then an amount per share of the Intrepid
Common Stock as determined by the Board of Directors of the Company in good
faith.

         The number of shares of Intrepid Common Stock to be received upon the
exercise of the Option may be adjusted from time to time as hereinafter set
forth. The shares of Intrepid Common Stock deliverable upon such exercise, and
as adjusted from time to time, are referred to herein as the "Option Shares."
The term "Other Securities" means any other equity or debt securities that may
be issued by the Company in addition to or in substitution for the Option
Shares. The term "Company" means and includes the Company as well as (i) any
immediate or more remote successor corporation resulting from the merger or
consolidation of the Company (or any immediate or more remote successor
corporation of the Company) with another corporation, or (ii) any corporation
to which the Company (or any immediate or more remote successor corporation of
the Company) has transferred its property or assets as an entirety or
substantially as an entirety. The term "Trading Day(s)" means a day on which
The Nasdaq National Market System, The Nasdaq Small Cap Market, the OTC
Bulletin Board or the primary national securities exchange or national market
system on which the Intrepid Common Stock is quoted, listed or reported is open
for a full day of trading.

         Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Option Agreement, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Option Agreement,
if mutilated, the Company shall execute and deliver a new Option Agreement of
like tenor and date. Any such new Option Agreement executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Option Agreement was lost, stolen, destroyed or mutilated.

         The Holder agrees with the Company that this Option Agreement is
issued, and all the rights hereunder shall be held, subject to all of the
conditions, limitations and provisions set forth herein.


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         1.       EXERCISE OF OPTION.

                  1.1      VESTING; METHOD AND PERIOD OF EXERCISE. The Exercise
Price and the number of Option Shares issuable upon exercise of the Option are
subject to adjustment upon the occurrence of certain events pursuant to the
provisions of Sections 1.1 and 5 hereof. Upon the exercise of the Option in
accordance with, and subject to the provisions of, this Option Agreement, the
Holder has the right to purchase from the Company (and the Company will issue
and sell to such registered Holder) during the Exercise Period:

                           (a)      immediately upon the date hereof and at any
         time or from time to time hereafter during the Exercise Period, up to
         an aggregate of that number of shares of Intrepid Common Stock which
         would, at the time of exercise and when added to all other shares of
         Intrepid Common Stock and other securities of the Company exercisable
         for or convertible into shares of Intrepid Common Stock other than the
         Option Shares ("Convertible Securities") then owned by Holder, result
         in Holder beneficially owning on a fully-diluted basis 35.025% of the
         issued and outstanding Intrepid Common Stock (and which number of
         Option Shares shall be subject to adjustment as provided herein); and

                           (b)      up to an aggregate of that number of shares
         of Intrepid Common Stock which would, at the time of exercise and when
         added to all other shares of Intrepid Common Stock and Convertible
         Securities then owned by Holder other than the Option Shares, result
         in Holder beneficially owning on a fully-diluted basis 51% of the
         issued and outstanding Intrepid Common Stock (and which number of
         Option Shares shall be subject to adjustment as provided herein),
         immediately upon and from time to time or at any time after the
         completion of an additional $4,500,000 investment in or loan to the
         Company, as contemplated by and provided for in the Investment
         Agreement.

                  1.2      METHOD OF EXERCISE. The Option may be exercised, in
whole or in part, during the Exercise Period by presentation and surrender of
this Option Agreement to the Company at its principal office, or at the office
of its stock transfer agent, if any, together with the Election to Exercise in
the form attached hereto duly executed and accompanied by payment of the
Exercise Price for the number of Option Shares specified in such form and
instruments of transfer, if appropriate, duly executed by the Holder or its duly
authorized attorney. Payment of the Exercise Price may be made (a) in cash, by
wire transfer or by delivery of one or more certified or official bank checks,
payable to the order of the Company, (b) upon a dollar for dollar cancellation
of any principal outstanding under any indebtedness or other obligation made by
the Company payable to the Holder, (c) by delivery of a number of shares of the
Intrepid Common Stock already held by the Holder having a fair market value, as
determined by multiplying the Closing Price on the date the Option is exercised
by such shares of Intrepid Common Stock, that equals the Exercise Price for the
number of Option Shares for which the Option is exercised, or (d) by reducing
the actual number of Option Shares issuable upon the exercise of the Option (as
set forth on the Election to Exercise) by the smallest number of whole Option
Shares which, when multiplied by the Closing Price as of the date the Option is
exercised, is sufficient to satisfy the Exercise Price for the number of Option
Shares for which


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the Option is exercised. If the Option should be exercised in part only, the
Company shall, upon surrender of this Option Agreement for cancellation, execute
and deliver a new Option Agreement evidencing the rights of the Holder thereof
to purchase the balance of the Option Shares purchasable hereunder. Upon receipt
by the Company of this Option Agreement, together with the Exercise Price, at
its office, or by the stock transfer agent of the Company at its office, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Intrepid Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Intrepid Common Stock
shall not then be actually delivered to the Holder. The Company shall be legally
obligated to consummate the exercise of the Option and shall be liable in
damages to the Holder, including, without limitation, damages for the Holder's
reasonable attorneys fees and expenses, if for any reason, it does not complete
the exercise of the Option.

                  1.3      EXERCISE PERIOD OF OPTION. Subject to the terms of
this Section 1, the Option may be exercised during the period (the "Exercise
Period") commencing on the date hereof and expiring at 5:00 p.m. Eastern Time
on the Expiration Date (as set forth on the first page hereof) or, if such day
is a day on which banking institutions in Jacksonville, Florida are authorized
by law to close, then on the next preceding day that shall not be such a day,
at which time this Option Agreement and the Option will terminate and no longer
be exercisable.

         2.       RESERVATION OF SHARES. The Company shall at all times reserve
for issuance and delivery upon exercise of the Option all shares of Intrepid
Common Stock or other shares of capital stock of the Company (and Other
Securities) from time to time issuable upon the exercise of the Option. All
such Option Shares (and Other Securities) shall be duly and validly authorized
and, when issued upon such exercise, shall be duly and validly issued, fully
paid and non-assessable and free of all preemptive rights other than rights
held by the Holder.

         3.       FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of the Option, but the
Company shall pay the Holder an amount equal to the product obtained by
multiplying such fractional share of Intrepid Common Stock by the Exercise
Price on the date of the exercise of the Option in lieu of each fraction of a
share otherwise called for upon any exercise hereof.

         4.       HOLDER DOES NOT HAVE THE RIGHTS OF A STOCKHOLDER. The Holder
shall not, by virtue hereof, be entitled to any rights of a stockholder in the
Company, either at law or in equity, until the valid exercise of the Option,
and the rights of the Holder are limited to those expressed in this Option
Agreement.

         5.       ANTI-DILUTION PROVISIONS.

                  5.1      ADJUSTMENT FOR RECAPITALIZATION, RECLASSIFICATION,
ETC. If the Company shall at any time subdivide its outstanding shares of
Intrepid Common Stock (or Other Securities at the time receivable upon the
exercise of the Option) by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or distribution, the
number of shares of Intrepid Common Stock subject to the Option immediately
prior to such subdivision, dividend or distribution shall be proportionately
increased and the


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Exercise Price shall be adjusted as provided below, and if the Company shall at
any time combine the outstanding shares of Intrepid Common Stock by
recapitalization, reclassification or combination thereof, the number of shares
of Intrepid Common Stock subject to the Option immediately prior to such
combination shall be proportionately decreased and the Exercise Price shall be
adjusted as provided below. Any such adjustment and any adjustment to the
Exercise Price pursuant to this Section 5.1 shall be effective at the close of
business on the effective date of such subdivision or combination or if any
adjustment is the result of a stock dividend or distribution then the effective
date for such adjustment based thereon shall be the record date therefor.
Whenever the number of shares of Intrepid Common Stock purchasable upon the
exercise of the Option is adjusted as provided in this Section 5.1, the
Exercise Price shall be adjusted to the nearest cent by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Intrepid Common Stock
purchasable upon the exercise immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Intrepid Common Stock so
purchasable immediately thereafter.

                  5.2      ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION,
MERGER, ETC. In case of any reorganization of the Company (or any other
corporation, partnership, limited liability company or other similar entity the
securities of which are at the time receivable on the exercise of the Option)
after the Grant Date or in case after such date the Company (or any such other
corporation, partnership, limited liability company or other similar entity)
shall consolidate with or merge into another corporation, partnership, limited
liability company or other similar entity or convey all or substantially all of
its assets to another corporation, partnership, limited liability company or
other similar entity, then, and in each such case, the Holder upon the exercise
thereof as provided in Section 1 at any time after the consummation of such
reorganization, consolidation, merger or conveyance, shall be entitled to
receive, in lieu of the securities and property receivable upon the exercise of
the Option prior to such consummation, the securities or property to which the
Holder would have been entitled upon such consummation if the Holder had
exercised the Option immediately prior thereto; in each such case, the terms of
this Option Agreement shall be applicable to the securities or property
receivable upon the exercise of the Option after such consummation.

                  5.3      RESTRICTIONS AGAINST CERTAIN ACTIONS. The Company
shall not, by amendment of its Certificate of Incorporation or through
reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Option
Agreement. Without limiting the generality of the foregoing, while the Option
is outstanding, the Company (a) shall not permit the par value, if any, of the
shares of stock receivable upon the exercise of the Option to be above the
amount payable therefor upon such exercise and (b) shall take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue or sell fully paid and non-assessable stock upon the exercise of
the Option that is at the time outstanding.

                  5.4      CERTIFICATE AS TO ADJUSTMENTS. In each case of an
adjustment in the number of shares of Intrepid Common Stock receivable on the
exercise of the Option, the Company at its expense shall promptly compute such
adjustment in accordance with the terms of


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this Option Agreement and prepare a certificate executed by an executive
officer of the Company setting forth such adjustment and showing in detail the
facts upon which such adjustment is based. The Company shall forthwith mail a
copy of each such certificate to each Holder.

                  5.5      NOTICES OF RECORD DATE, ETC. In case:

                           (a)      the Company shall take a record of the
         holders of its Intrepid Common Stock (or Other Securities at the time
         issuable upon the exercise of the Option) for the purpose of entitling
         them to receive any dividend (other than a cash dividend at the same
         rate of the last cash dividend theretofore paid) or other
         distribution, or any right to subscribe for, purchase or otherwise
         acquire any shares of stock of any class or any other securities, or
         to receive any other right; or

                           (b)      of any capital reorganization of the
         Company, any reclassification of the capital stock of the Company, any
         consolidation or merger of the Company with or into another
         corporation, or any conveyance of all or substantially all of the
         assets of the Company to another corporation; or

                           (c)      of any voluntary or involuntary
         dissolution, liquidation or winding up of the Company;

then, and in each such case, the Company shall mail or cause to be mailed to
the Holder a notice specifying, as the case may be, (i) the date on which a
record is to be taken for the purpose of such dividend, distribution, or right,
and stating the amount and character of such dividend, distribution or right,
or (ii) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding up is to take place,
and the time, if any, is to be fixed, as to which the holders of record of
Intrepid Common Stock (or such other securities at the time receivable upon the
exercise of the Option) shall be entitled to exchange their shares of Intrepid
Common Stock (or such other securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding up. Such notice shall be
delivered via overnight courier at least thirty (30) days prior to the date
therein specified and the Option may be exercised prior to said date during the
term hereof.

         6.       RESTRICTIONS ON TRANSFER OF SHARES.

                  6.1      RESTRICTIONS ON TRANSFER. The Holder agrees not to
make any disposition of all or any portion of this Option or the Option Shares
or Other Securities unless and until:

                           (a)      there is then in effect a registration
         statement under the Securities Act covering such proposed disposition
         and such disposition is made in accordance with such registration
         statement; or

                           (b)(i)   the Holder shall have notified the Company
         of the proposed disposition and shall have furnished the Company with
         a statement of the circumstances surrounding the proposed disposition,
         and (ii) if reasonably requested by the Company,


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         the Holder shall have furnished the Company with an opinion of
         counsel, which counsel if other than Piper Marbury Rudnick & Wolfe
         shall be reasonably satisfactory to the Company and its counsel, that
         such disposition will not require registration of such shares under
         the Securities Act.

                           (c)      Notwithstanding the provisions of Sections
         6.1 (a) and (b) hereof, no such registration statement or opinion of
         counsel shall be necessary for a transfer by the Holder if (i) the
         Holder is a partnership and the transfer is made to its partners or
         former partners in accordance with partnership interests, (ii) the
         Holder is a limited liability company and the transfer is made to its
         members or former members in accordance with their interest in the
         limited liability company, or (iii) to the Holder's family member or
         trust for the benefit of an individual Holder or a family member;
         provided that in each case the transferee will be subject to the terms
         of this Agreement to the same extent as if he were the original Holder
         hereunder.

                  6.2      REISSUANCE OF UNLEGENDED CERTIFICATES. The Company
shall be obligated to reissue promptly unlegended certificates at the request
of the Holder thereof if the Holder shall have obtained an opinion of counsel
(which counsel may be counsel to the Company) reasonably satisfactory to the
Company if other than Piper Marbury Rudnick & Wolfe, to the effect that the
securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.

                  6.3      REMOVAL OF LEGENDS/ORDERS. Any legend endorsed on an
instrument pursuant to applicable state securities laws and the stop-transfer
instructions with respect to such securities shall be removed upon receipt by
the Company of an order of the appropriate blue sky authority authorizing such
removal.

         7.       PAYMENT OF TAXES. The Company agrees to pay all documentary
stamp taxes (whether federal, state or local) attributable to the exercise of
the Option and the issuance of Option Shares upon such exercise.

         8.       NOTICES. Other than as set forth herein, all notices required
hereunder shall be in writing and shall be deemed given when delivered via
facsimile transmission to a number known to be the facsimile number of the
Holder or the Company, delivered personally or within two days after mailing
when mailed by regular, certified or registered mail, return receipt requested,
to the Company or the Holder, as the case may be, for whom such notice is
intended, at the address of such party as set forth on the first page, or at
such other address of which the Company or the Holder has been advised by
notice hereunder.

         9.       SPECIFIC PERFORMANCE. The parties hereto acknowledge that
there would be no adequate remedy at law if any party hereto fails to perform
any of its obligations hereunder, and accordingly agree that each party hereto,
in addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations of
any other party hereto under this Agreement in accordance with the terms and
conditions of this Agreement in any court of the United States or any state
thereof having jurisdiction.


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         10.      APPLICABLE LAW. This Option Agreement is issued under and
shall for all purposes be governed by and construed in accordance with the laws
of the State of Delaware.




                             [Signatures Next Page]


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         IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed and delivered on its behalf, in its corporate name, by its duly
authorized officer, all as of the Grant Date.


                           INTREPID CAPITAL CORPORATION


                           By: /s/ Forrest Travis
                              -------------------------------------------------
                              Forrest Travis, President and
                              Chief Executive Officer


[CORPORATE SEAL]


Attest:  /s/ Michael J. Wallace
       ----------------------------------------------
         Secretary


<PAGE>


                         NOTICE OF ELECTION TO EXERCISE


                                                Dated ________________, _______


         The undersigned hereby irrevocably elects to exercise the within
Option to the extent of ________________ shares of the Common Stock and hereby
makes payment of $____________ in payment of the actual exercise price thereof,
together with all applicable transfer taxes, if any.

         You are hereby instructed to register such Common Stock in the
following name:


Name

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               (Please use typewriter or print in block letters)

Address

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         WITNESS the signature of the undersigned holder, by its duly
authorized representative, as the day and year first written above.


                                             [OPTION HOLDER]


                                             By:
                                                -------------------------------
                                                Its:
                                                    ---------------------------


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