Document:

<PAGE>
                                                                    Exhibit 10.3

                               SECOND AMENDMENT TO
                   INSURANCE ADMINISTRATION SERVICES AGREEMENT

         This SECOND AMENDMENT ("Amendment"), effective as of August 12, 2002,
is made to that certain INSURANCE ADMINISTRATION SERVICES AGREEMENT (the
"Agreement") dated October 1, 2001 by and between INSURANCE MANAGEMENT
SOLUTIONS, INC. ("IMS"), a corporation organized and existing under the laws of
the State of Florida with its principal place of business located at 801 94th
Avenue North, St. Petersburg, Florida, and each of BANKERS INSURANCE COMPANY
("BIC'), BANKERS SECURITY INSURANCE COMPANY ("BSIC") and FIRST COMMUNITY
INSURANCE COMPANY ("FCIC"), herein collectively referred to as "Customer", all
having their principal place of business at 360 Central Avenue, St. Petersburg,
Florida 33701, which Agreement was amended by that certain First Amendment dated
July 1, 2002 (collectively with the Agreement is hereinafter referred to as the
"Agreement").

         WHEREAS, IMS is engaged by Customer to provide certain policy
administration services and claims administration services, respectively, as
provided in the Agreement; and

         WHEREAS, Customer and IMS mutually desire to add certain services
relating to Information Technology ("IT") Services to be provided by IMS to
Customer including the fees associated with such services, as the same are more
specifically set forth herein.

         NOW THEREFORE, IN CONSIDERATION OF the mutual covenants and agreements
hereinafter set forth, and for the considerations set forth in the Agreement,
the parties hereto hereby covenant and agree as follows:

1.       Insurance Administration Services. The "Insurance Administration
         Services" described in the Agreement will now include the services set
         forth on "EXHIBIT IV" attached hereto and made a part hereof, which
         EXHIBIT IV describes the "IMS COVERAGE OF CUSTOMER-OWNED IT SERVICES".
         Both EXHIBIT I and EXHIBIT II of the Agreement shall remain as is,
         without modification. Provided, however, the following sentence is
         hereby deleted in its entirety from Revised Exhibit I attached to the
         First Amendment, to wit:

                4) TELECOM SERVICES AND EQUIPMENT. IMS shall provide use of the
         telecom equipment in consideration of Customer administrating the
         system and providing technical support.

2.       Fees and Expenses. In addition to describing such services, EXHIBIT IV
         contains the "Fees" associated with and applicable to the IMS COVERAGE
         OF CUSTOMER-OWNED IT SERVICES. The "REVISED SCHEDULE B" attached to the
         First Amendment to Insurance Administration Service Agreement shall
         remain as is, without modification, but shall not be applicable to the
         services described on EXHIBIT IV.

3.       All Other Terms. Except as specifically modified by the terms of this
         Second Amendment, all other terms, definitions, conditions, exhibits
         and schedules contained in or otherwise attached to the Agreement shall
         remain in full force and effect.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Second Amendment as of the date and year
first set forth above.

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

"IMS"

INSURANCE MANAGEMENT SOLUTIONS, INC.

By:      s/s DM Howard
   ---------------------------------

As its: Pres/CEO
        ----------------------------

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

"CUSTOMER"

BANKERS INSURANCE COMPANY

By:      s/s David K. Meehan
   ---------------------------------

As its: President
        ----------------------------

BANKERS SECURITY INSURANCE COMPANY

By:      s/s David K. Meehan
   ---------------------------------

As its: President
        ----------------------------

FIRST COMMUNITY INSURANCE COMPANY

By:      s/s David K. Meehan
   ---------------------------------

As its: President
        ----------------------------

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

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<PAGE>

                                   EXHIBIT IV

                 TO INSURANCE ADMINISTRATION SERVICES AGREEMENT

                   IMS COVERAGE OF CUSTOMER-OWNED IT SERVICES

SECTION I. IT OUTSOURCING SERVICES, UNLESS OTHERWISE DESCRIBED HEREIN, IMS SHALL
PROVIDE THE FOLLOWING SERVICES TO CUSTOMER BASED UPON THE SERVICES FEE DESCRIBED
FOR EACH.

------------------------------------------------------------------------
             SERVICES:                           SERVICES FEE
------------------------------------------------------------------------
         Desktop Support(1)             $37.00 per employee per month;
                                         monthly minimum of $9,250.00
------------------------------------------------------------------------
         Server Support(2)                     $7,841 per month
------------------------------------------------------------------------
         Telecom Support(3)             $31.00 per employee per month;
                                         monthly minimum of $7,750.00
------------------------------------------------------------------------
         Telecom Hosting(4)                    $2,000 per month
------------------------------------------------------------------------
  Application Software Support(5)             $43,490 per month
------------------------------------------------------------------------
      Statistical Reporting(6)                 $2,500 per month
------------------------------------------------------------------------

(1)      Desktop Support (on-site support to be provided from 8:00 AM to 6:00
         PM, Monday through Friday and on-call after regular business hours,
         including holidays):
         -        Initially covers Customer's 360 employees located in St.
                  Petersburg, Florida that are desktop users and require desktop
                  support
         -        This service fee may be adjusted each quarter based upon the
                  number of Banker's employees on current payroll at the
                  beginning of such quarter. Either party may request an
                  adjustment (that is, an increase in fees or decrease in fees),
                  based upon a change in the number of Customer's employees by
                  providing written notice to the other party at the beginning
                  of each quarter. Should either party fail to request an
                  adjustment for a particular quarter, the fee shall remain
                  as-is for the remainder of that quarter. Provided, request for
                  an adjustment may be made at the beginning of the next quarter
                  (the foregoing is called the "Employee Adjustment")

         -        IMS will provide:
                           -        Help Desk Services
                                    -        Intranet enabled support ticket
                                             request capability
                                    -        Support telephone line
                                    -        Problem resolution at the desktop
         -        Customer will provide:
                           -        Desktop Hardware for each associate covered
                           -        Desktop Software for each associate covered

(2)      Server Support
         -        Covers 26 (plus or minus 3) Customer-owned servers, including:
                           -        BIGDC01
                           -        BIGDC02
                           -        CADSRV01
                           -        CITRIXSRV01
                           -        DB2DEV
                           -        DB2DEV02
                           -        DEPTSRV02
                           -        DUNSRV01
                           -        EPSSRV01
                           -        FAPSRV01
                           -        INTSRV01
                           -        ISASRV01
                           -        ISASRV03
                           -        RPTSRV01
                           -        SQLSRV01
                           -        STRUSTSRV

                                       3
<PAGE>

                                   EXHIBIT IV
           TO INSURANCE ADMINISTRATION SERVICES AGREEMENT - CONTINUED

                  -        SVCSRV01
                  -        SVCDEV01
                  -        TSMSRV01
                  -        WEBSRV01
                  -        INTDEV01
                  -        INTDEV02
                  -        INTDEV03
                  -        WEBDEV02
                  -        IMGSRV01
                  -        IBM AS/400 720 Model

         -        Customer will provide for Customer-owned servers:
                  -        Server Hardware
                  -        Server Software
                  -        Server Space Rental
                  -        Electrical Power
                  -        Backbone and other Necessary connectivity
                  -        Access to secured computer room; provided IMS shall
                           be responsible for all maintenance and security
                           associated with the servers located in such room

         -        IMS will provide (to be provided 24-hours each day, seven (7)
                  days per week, including holidays):
                  -        Help Desk Support
                  -        Network Access
                  -        Server Availability
                  -        Storage/Backup/Archive/Retrieval

(3)      Telecom Support (on-site support to be provided from 8:00 AM to 5:00
         PM, Monday through Friday and on-call after regular business hours,
         including holidays) for all current system configuration (All
         additional changes and enhancements based upon time and materials):
         -        Initially covers Customer's 400 employees located in St.
                  Petersburg, Florida that are telecom users and require support
         -        The fees for this service is subject to the "Employee
                  Adjustment" described above
         -        Telecom Personnel to support the existing Customer telecom
                  infrastructure
         -        Customer will provide
                  -        Telecom Interconnectivity for Customer telecom
                           infrastructure
                  -        Telecom software to support Customer telecom
                           infrastructure

(4)      Telecom Hosting (on-site support to be provided from 8:00 AM to 5:00
         PM, Monday through Friday and on-call after regular business hours,
         including holidays) for all current system configuration (All
         additional changes and enhancements based upon time and materials):
         -        IMS will provide Northern Telecom compliant existing handsets
                  for 400 Customer associates
         -        IMS will provide Northern Telecom PBX Hardware
         -        IMS will provide PBX Availability
         -        IMS will provide PBX Software (current system configuration)
         -        Customer will provide Hosting Space Rental
         -        Access to secured computer room; provided IMS shall be
                  responsible for all maintenance and security associated with
                  the servers located in such room

(5)      Application Software Support (on-site support to be provided from 8:00
         AM to 5:00 PM, Monday through Friday and on-call after regular business
         hours, including holidays) for all current system configuration (All
         additional changes and enhancements based upon time and materials):
         -        Companion Flood Software Support
         -        BOP Software Support
         -        Excess Flood Software Support
         -        Contingency Commission Software Support

                                       4
<PAGE>

                                   EXHIBIT IV
           TO INSURANCE ADMINISTRATION SERVICES AGREEMENT - CONTINUED

         -        Customer Internet Site Support
         -        Customer Intranet Site Support
         -        Customer Month-End Software Support
         -        Human Resources ADP Software Support
         -        Vector Software Support
         -        CPP Software Support
         -        Commercial Auto Software Support
         -        Vanguard Book-Transfer Software Support
         -        Various Current Manual Line Software Support
         -        Various Current Other Products, that are or were in "run-off"
                  phase attached hereto as Exhibit IV - A (the "Run-off Lines of
                  Business")

(6)      Statistical Reporting for current system configurations. All additional
         changes and enhancements based upon time and materials.
         IMS shall provide:
         a.       Commercial Lines Statistical Call Support:
                      i.   Quarterly TX ISO - QTR Miscellaneous Commercial
                           Experience
                     ii.   NAII Commercial Fire & Allied Lines/FR BIC-FCIC
                    iii.   Annual NAII General Liability/GLA BIC-FCIC-BSIC
                     iv.   NAII Professional Liability/MPA BIC
                      v.   NAII Business owners/BO BIC-BSIC
                     vi.   NAII Farm owners/FM
                    vii.   NAII Burglary/BU BIC-FCIC
                   viii.   NAII Fidelity & Surety/F&S BIC-BSIC
                     ix.   NAII Glass/GS BIC-FCIC
                      x.   NAII Inland Marine/IM
                     xi.   Annual NAII Auto/AU Excluding NC BIC-FCIC
                    xii.   NAII Personal Lines/DP BIC-BSIC-FCIC
                   xiii.   VOLEX
                    xiv.   NC VOLEX
                     xv.   NAII NC Quarterly Auto
                    xvi.   TICO Market Report
                   xvii.   SCHWHUA Voluntary Credit Report
                  xviii.   FWUA Voluntary Credit Report
                    xix.   Alabama Disaster Response Plan
                     xx.   NY Insurance Disaster Coalition
                    xxi.   GA Cancel/Non-Renewal Forms GID-44 GID-45
                   xxii.   TX ISO - Quarterly Liability Experience
                  xxiii.   NAII SC AIPEX
                   xxiv.   CA PP Liability Auto Report SAL/AR
                    xxv.   Home State - TX Theft Report
                   xxvi.   FHCF Data Call, and

         b.       Homeowner and Auto Statistical Call Support:
                      i.   CA PP Auto Physical Damage Experience SAP
                     ii.   Exposure Reporting - Monthly Call
                    iii.   FHCF Data Call
                     iv.   Home State - Quarterly Experience Report
                      v.   Home State - Commercial Auto Call
                     vi.   Home State - Policy Count
                    vii.   Home State - Quarterly Market Report
                   viii.   Home State - TX Theft Assessment Report
                     ix.   NAII FL AIP
                      x.   NAII FL AIPEX
                     xi.   NAII SC AIP
                    xii.   QUASR
                   xiii.   SC AIPSO
                    xiv.   TX ISO- F&S

                                       5
<PAGE>

(7)      General Conditions:
         a.       Customer shall provide necessary personnel space for IMS
                  employees servicing Customer pursuant to this Agreement, and
         b.       Customer shall provide adequate parking spaces for IMS
                  employees servicing Customer pursuant to this Agreement, based
                  upon Customer's parking policies and procedures, as revised
                  from to time.

                                       6
<PAGE>

                                 EXHIBIT IV - A

                           "RUN-OFF LINES OF BUSINESS"

Auto Service
Border Trucking
Commercial Auto
Cycle Warranty
Day Care
Employers Liability
Fidelity
Firearms
Inland Marine
Marine Industries Contingent P & I
Marine Omnibus
Real Estate Appraisers E & O
Restaurant-Standard Lines
Surety Bonds
Towing
Trucking
Senior Yacht
Special Restaurant
Discontinued Lines
Contract Surety
Lensurance
Occupational Accident Policy
Ocean Marine
Workers Compensation
Personal Auto GA (CA, OR, WA)
Personal Auto (FL & SC)
Business Auto (BUTI)
Personal Auto (BUTI)
Homeowners (Heartland)
Dwelling Fire (Heartland)
Non-Standard Auto (Heartland)
Preferred Auto (Heartland)
All Prior Products previously serviced in "run-off"

                                       7<PAGE>
                                                                   Exhibit 10.4

                         CREDIT AND SECURITY AGREEMENT

THIS CREDIT AND SECURITY AGREEMENT (herein, "Agreement") is made effective this
15 day of August, 2002 between INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., a
Florida corporation (herein, "Lender") and BANKERS INSURANCE GROUP, INC., a
Florida corporation (herein, "BIG") and BANKERS UNDERWRITERS, INC.,   a Florida
corporation (herein, "BUI") (BIG and BUI herein, collectively "Borrower")
(herein Lender and Borrower collectively, "Parties" or individually "Party").

                                   RECITALS:

WHEREAS, Lender is a corporation duly organized under the laws of the State of
Florida; and

WHEREAS, Borrower is a corporation duly organized under the laws of the State
of Florida; and

WHEREAS, in order to provide Borrower with funds, Borrower wishes to borrow the
aggregate sum of up to Seven Million and No/100 dollars ($7,000,000.00) (the
"Loan") from Lender, which will be secured by the Collateral (as defined
below); and

WHEREAS, Lender wishes to make the Loan to Borrower; and

          NOW, THEREFORE, IN CONSIDERATION of Lender's agreement to make the
Loan to Borrower, all in accordance with the terms and conditions of this
Agreement, as well as for other good and valuable consideration, the Parties
hereto do covenant and agree as follows:

SECTION 1. RECITALS.

     The statements contained in the recitals of fact set forth above (the
     "Recitals") are true and correct, and the Recitals by this reference are
     made a part of this Agreement.

SECTION 2. EXHIBITS.

     The exhibits attached to this Agreement are by this reference made a part
of this Agreement.

SECTION 3. DEFINITIONS.

     For the purpose of this Agreement, the following terms shall have the
following meanings:

     a)   "Affiliate" shall mean any corporation, partnership, association,
          trust or Person which or who directly or indirectly controls or is
          controlled by, or is under common control with the Borrower.

     b)   "Borrower" shall mean both Bankers Insurance Group, Inc., a Florida
          corporation and Bankers Underwriters, Inc., a Florida corporation.

     c)   "Collateral" shall refer to the "Flood Book" (as defined below) being
          assigned by BUI to Lender pursuant to the Collateral Assignment of
          Flood Book and this Agreement.

     d)   "Corporate Principal" shall mean any shareholder, director, or officer
          of Borrower.

     e)   "Event Of Default" shall mean any of the events or conditions
          described in Section 11 below.

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     f) "Flood Book" shall have the definition assigned to such term in the
        Collateral Assignment of Flood Book.

     g) "Indebtedness" shall mean all principal, interest and other charges
        arising under the Loan and the Revolving Line of Credit Master
        Promissory Note ("Note") being executed by Borrower in favor of Lender
        on or about the date hereof.

     h) "Loan" shall mean the line of credit established pursuant to Section 4
        hereof.

     i) "Loan Documents" shall mean each of the following documents all dated of
        even date herewith to establish the Loan - Note, Collateral Assignment
        of Flood Book, UCC-1 Financing Statement, Further Assurance and
        Compliance Agreement and this Agreement.

     j) "Obligation" or "Obligations" shall mean any and all Indebtedness,
        liabilities and obligations of Borrower whatsoever under the Loan
        Documents.

     k) "Person" shall mean and include any individual, partnership,
        corporation, trust, unincorporated organization or a government or any
        department or agency thereof.

     l) "Subsidiary" shall mean any corporation of which a majority, in vote or
        in value, of every class of stock, at the time as of which any
        determination is being made, is owned by the Borrower either directly
        or through Subsidiaries.

SECTION 4.  LOAN.

     a) Amount. Upon the execution of this Agreement and in compliance with its
        terms and conditions, Lender agrees to make a revolving loan to
        Borrower up to a maximum principal amount equal to Seven Million and
        No/100 dollars ($7,000,000.00).

     b) Purpose. Funds received under the Note shall be used by Borrower
        exclusively: (i) to payoff a $5,000,000.00 loan and other indebtedness
        outstanding from BIG to AMS Staff Leasing ("AMS"), by virtue of a loan
        made by AMS to BIG on or about June 10, 2002, and all other
        indebtedness associated with that Loan; and (ii) for other working
        capital needs of Borrower as determined from time to time by Borrower.

     c) Grant of Security Interest. BUI does hereby grant to Lender a first
        priority security interest in and to the Flood Book as security for the
        repayment of all sums advanced on the Loan and for the performance by
        Borrower of all covenants and agreements under the Loan Documents in
        accordance with their terms and conditions.

SECTION 5.  TERM OF AGREEMENT.

     a) This Agreement shall be effective upon the execution hereof, and shall
        continue in full force and effect until the Loan is paid in full.

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<PAGE>
SECTION 6. CONDITIONS PRECEDENT.

    Prior to the first advance by Lender to Borrower pursuant to this Agreement
    and as a condition precedent to any of Lender's other obligations under this
    Agreement, Borrower shall execute and deliver to Lender or shall cause to be
    executed and delivered to Lender each of the following:

  a)  Promissory Note. The Note which shall include a Waiver of Jury Trial
      provision;

  b)  The Loan Documents;

  c)  Perfection. Such financing statement(s), security agreements, and other
      documents and instruments as Lender may reasonably require from time to
      time to perfect any and all security interests granted by BUI to Lender
      pursuant to this Agreement or pursuant to any other security agreement(s)
      executed by Borrower to induce Lender to make the Loan herein described;

  d)  Resolutions. The good and sufficient Resolution of the Board of Directors
      of the Borrower authorizing Borrower to enter into the transaction
      contemplated by this Agreement.

    Prior to the first advance and at the time of each advance by Lender to
    Borrower pursuant to this Agreement and as a condition precedent to any of
    Lender's other Obligations under this Agreement, the following shall be
    true:

  e)  No Default. There shall be no Event of Default hereunder, nor any event of
      default existing under any of the Loan Documents.

  f)  No Change. There shall have been no material adverse change in the
      Borrower or the Collateral.

  g)  No Litigation. There shall be no pending litigation or administrative
      action or known threat thereof challenging the Loan transaction or the
      Agreement and Plan of Merger between Lender, BIG and others (the "Merger
      Agreement").

  h)  True and Correct. All representations and warranties of Borrower in and
      all of the Loan Documents shall be true and correct.

  i)  Other Documents. Lender shall have received from Borrower all other
      documents reasonably requested by Lender.

SECTION 7. AFFIRMATIVE COVENANTS.

    Borrower hereby covenants with Lender that for so long as any Obligations
    remain outstanding Borrower shall:

  a)  Corporate Existence. Do or cause to be done all things necessary to keep
      in full force and effect its corporate existence and all rights,
      franchises, licenses, authorizations, permits and qualifications to carry
      on business in all jurisdictions where such qualifications may be
      necessary;

  b)  Compliance with Law. Remain in compliance with all applicable laws of the
      jurisdictions within which Borrower conducts its business.

  c)  Payment of Taxes. Pay all federal, state and local taxes as the same
      become due.

  d)  Financial Statements. Deliver to Lender, the following:

        1) Unaudited Financials -- Monthly. As soon as practicable, and in any
           event within thirty (30) days after the end of each calendar month,
           furnish to Lender a monthly unaudited consolidated financial
           statement of BIG, including balance sheets and income statements, for
           the calendar month just ended, and for the calendar year to date,
           certified by a duly authorized officer of

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

                                    3 of 10
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             BIG;

          2) Unaudited Financials - Annual.  As soon as practicable, and in any
             event within one hundred twenty (120) days after the end of each
             fiscal year, furnish to Lender, the unaudited consolidated
             financial statement for BIG, including balance sheets and income
             statements, prepared in accordance with generally accepted
             accounting principles and practices applied on a basis consistently
             maintained throughout the period involved and certified by an
             authorized officer of BIG; and

          3) Data.  Promptly, but in all events within ten (10) days of Lender's
             request, such financial statements, reports, certificates, lists of
             customers (showing names, addresses and amounts owing) and other
             data concerning accounts, contracts, collections, inventory and
             other matters as Lender may from time to time request.

     e)   Notice.  Give prompt written notice to Lender upon becoming aware of
          the occurrence of any Event of Default or event which, by passage of
          time or the giving of notice or both would constitute an Event of
          Default;

     f)   Free Collateral.  Keep Collateral free from all liens, encumbrances
          and security interests and pay and discharge when due all taxes,
          levies and other charges upon it and upon the goods evidenced by any
          documents constituting Collateral and defend it against all claims of
          any kind;

     g)   Access.  Provide access to accounting and business records of Borrower
          which will include, but not be limited to, access and substantive
          dialogue with Borrower's accountants, attorneys, bank or other
          financial institution and any other party or parties with which the
          Borrower has had or may have any dealings. Said dialogue may encompass
          the affairs, finances and accounts of Borrower including but not
          limited to any matter or aspect pertaining to any and all business
          transactions that have taken place or that may be contemplated at some
          future date. Borrower shall hold harmless, indemnify, release and
          authorize any and all such parties that may care to express an opinion
          regarding the business of the Borrower and the transactions engaged
          therein;

     h)   Financial Condition.  Notify Lender immediately, but in any event
          within five (5) days after obtaining knowledge of any fact or facts
          which might materially and adversely affect the assets, business
          operations, properties, income or condition (financial or otherwise)
          of the Borrower or the Obligations or authority of Borrower to perform
          its Obligations under any Loan Document;

     i)   Notify of Action or Suit.  Notify Lender immediately, but in any event
          within five (5) days after obtaining knowledge that Borrower is a
          party, or may be threatened to be made a party, to any threatened,
          pending or completed action, suit or proceeding, whether civil,
          criminal, administrative or investigative;

     j)   Pay Debts - Indemnity.  Pay when due (or within applicable grace
          periods) all Indebtedness due third Persons, except when the amount
          thereof is being contested in good faith by appropriate proceedings
          and with adequate reserves therefore set aside on the books of
          Borrower for the payment of such indebtedness. If Borrower shall
          default in the payment of any principal (or installment thereof) of,
          or interest on, any such Indebtedness, Lender shall have the right, in
          its sole discretion, to pay such interest or principal on behalf of
          Borrower; provided, however, Borrower shall indemnify Lender in full
          for any such amount;

     k)   New Location.  Notify Lender thirty (30) days in advance of any change
          in the jurisdiction of its organization, the location of any of its
          businesses or the establishment of any new, or the discontinuance of
          any existing, place of business; and

     l)   Books of Account - Inspections.  Maintain books of account in
          accordance with general accounting practices, and for purposes of
          determining Borrower's compliance with this Agreement. If no

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      Event of Default exists or is continuing, Lender shall have the right, at
      Lender's expense, to inspect any of the corporate books and financial
      records at such reasonable times as Lender may request. If any Event of
      Default exists, Lender may, at the expense of the Borrower, inspect the
      corporate books and financial records at all such reasonable times and as
      often as may be requested by the Lender.

SECTION 8. NEGATIVE COVENANTS.

      Borrower hereby covenants with Lender that for so long as any Obligations
      remain outstanding and unless Lender notifies Borrower in writing it
      dispenses with any one or more of the following requirements, Borrower
      will not:

   a) Character of Business. Engage in any business substantially apart from the
      services currently being provided by Borrower;

   b) Mergers, Consolidations, Sales. Consolidate with or merge into any other
      Person or permit any other Person other than a Subsidiary to consolidate
      with, or merge into, the Borrower, or to sell, transfer or otherwise
      dispose of all, or substantially all, of its assets to any other Person;

   c) Business Practices. Materially alter or change the principal business in
      which Borrower is engaged or the manner in which Borrower conducts its
      business affairs; and

   d) Untrue Statements. Furnish Lender any certificate or other document that
      will contain any untrue statement of material fact or that will omit to
      state a material fact necessary to make it not misleading in the light of
      circumstances under which it was furnished.

SECTION 9. REPRESENTATIONS AND WARRANTIES.

      Borrower represents and warrants to Lender that:

   a) Absence of Defaults. All agreements to which Borrower and Lender are
      parties are valid and binding agreements enforceable against Borrower in
      accordance with their terms, and no event has occurred and is continuing
      which constitutes an Event of Default by Borrower or a default by Borrower
      under any such agreements;

   b) Ownership. BUI owns all of the Flood Book;

   c) Proceeds. Proceeds under this Loan will be used exclusively for the
      purposes and in the amounts set forth herein;

   d) Correct Financials. Any financial statements heretofore delivered to
      Lender are true and correct in all respects, have been prepared in
      accordance with generally accepted accounting principles and fairly
      represent the financial conditions of the Borrower as of the respective
      dates thereof. No material adverse change has occurred in the financial
      condition of the Borrower reflected in such financial statements since the
      respective dates thereof and no additional borrowings have been made by
      Borrower since the date thereof other than the borrowing contemplated
      hereby;

   e) No Breach or Violation. The consummation of the transactions contemplated
      hereby or the performance by Borrower of any Obligation will not result in
      any breach of or constitute a default under any mortgage, deed of trust,
      lien, bank loan, or credit agreement, corporate charter, by-law, law,
      regulation, ordinance, order, judgment, decree or other instrument to
      which Borrower is a party, or by which it is bound or affected;

   f) Corporate Existence-Good Standing.

       1) Borrower is a corporation duly organized, validly existing, and in
          good standing under the laws of the State of Florida;

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<PAGE>
          2) Borrower has all lawful corporate power to own its properties and
             to engage in the business it now conducts, and Borrower is duly
             qualified and in good standing as a foreign corporation in the
             jurisdictions wherein the nature of the business transacted by it
             or property owned by it make such qualification necessary;

          3) Borrower has not changed its name, been the surviving corporation
             in a merger, acquired any business, or changed its principal
             executive office since 1994; and

     g) Representations and Warranties Survive. All of the representations and
        warranties set forth in Section 9. hereof encaptioned, "Representations
        and Warranties" shall survive the execution and delivery of this
        Agreement and the other Loan Documents until all Obligations are
        satisfied in full and all outstanding amounts due under the Loan are
        paid in full.

     h) Authority/Validity. Borrower had the requisite corporate power and
        authority to execute and deliver this Agreement and the other Loan
        Documents. The execution, delivery and performance of this Agreement and
        the other Loan Documents have been duly authorized by all necessary
        corporate action on the part of the Borrower.

     i) Litigation. There is no litigation proceeding pending, or to the
        knowledge of Borrower, threatened against Borrower except for threats of
        litigation against BIG by AMS, which will be fully resolved by BIG by
        means of the payment by BIG, from the proceeds hereof, of the loan from
        AMS to BIG as described in Section 4(b)(i) hereof, and Borrower knows of
        no circumstances as of the date of this Agreement that could materially
        and adversely affect the Borrower and/or the Collateral.

SECTION 10. FINANCING STATEMENTS.

     a) At Lender's discretion, Borrower will join with Lender in executing such
        financing statements (including amendments thereto and continuation
        statements thereof) in form satisfactory to Lender; pay or reimburse
        Lender for all costs and taxes of filing and recording the same in such
        public offices as Lender may designate; and take such other steps as
        Lender may direct, including the noticing of Lender's lien on the
        Collateral and on any certificates of title therefore all to perfect
        Lender's interest in the Collateral; and

     b) To the extent lawful, Borrower hereby appoints Lender with full power of
        substitution and revocation, as its Attorney-in-Fact (without requiring
        Lender to act as such) to execute any financing statement in the name of
        Borrower, and to perform all other acts that Lender deem appropriate to
        perfect and continue its security interest in, and to preserve, the
        Collateral.

SECTION 11. EVENTS OF DEFAULT.
     The following occurrences shall constitute Events Of Default hereunder:

     a) Non-Payment. Borrower fails to pay when and as required to be paid
        herein, any principal or interest amount within 5 days after the same
        becomes due;

     b) Breach of Warranty. Any warranty, representation, or statement made or
        furnished to Lender by or on behalf of Borrower proves to have been
        false in any material respect on or as of the date when made or
        furnished or deemed made or furnished;

     c) Breach of Covenant. Any affirmative covenant or negative covenant is
        breached, violated or not complied with if such affirmative covenant or
        negative covenant continues to be breached, violated

                                    6 of 10
<PAGE>
   or not complied with after Lender has given notice thereof to Borrower and a
   15 day opportunity to cure;

d) Dissolution/Bankruptcy. Dissolution, termination of existence, insolvency
   (failure to pay its debts as they mature or the failure to maintain the fair
   market value of its assets in an amount greater than its liabilities on a
   consolidated basis for purposes herein, whichever shall first occur), a
   business failure, appointment of a receiver, assignment for the benefit of
   creditors or the commencement of any proceedings under any bankruptcy or
   insolvency law by or against Borrower or any guarantor or the making by
   either Borrower or any guarantor of any offer or settlement, exchange or
   composition to their respective unsecured creditors generally;

e) Attach Liens. The issuance or filing against Borrower of a tax lien or the
   issuance or filing of any attachment, injunction, execution or judgment which
   is not removed within thirty (30) days after issuance of filing;

f) Waste. Lender shall, upon reasonable basis, at any time deem itself insecure
   or unsafe because of diminution, removal, or waste of Collateral;

g) Third Party Debt. Borrower shall fail to pay any Indebtedness due any third
   persons and such failure shall continue beyond any applicable grace period,
   or Borrower shall suffer to exist any other event of default under any
   agreement binding the Borrower;

h) Judgment. Borrower shall suffer final judgments for payment of any sums due
   to third parties and shall not discharge the same within a period of thirty
   (30) days (unless, pending further proceedings, execution has not been
   commenced, or if commenced has been effectively stayed) or a judgment
   creditor of Borrower shall obtain possession of any of the Collateral by any
   means, including, without limitation, levy, distraint, replevin, or self
   help; and

i) Impairment of Security. Any condition or situation, which, in the sole
   determination of the Lender, upon reasonable basis, constitutes a danger of
   impairment of the security of the Loan, and such condition or situation is
   not remedied within ten (10) business day's after receipt of written notice
   to the Borrower to remedy such condition or situation.

j) Default under Other Documents. A default shall occur under the Merger
   Agreement, other Loan Documents or other Material Agreements (as that term is
   defined herein) between Borrower and Lender, and which are not cured within
   the applicable grace or curative period set forth therein. For purposes of
   this Agreement, the term "Material Agreement" shall mean any agreement the
   default of which could result in a claim for damages of at least $100,000.00.

SECTION 12. DEFAULT REMEDIES.

a) Upon any Event Of Default:

1) Lender shall retain the right to terminate making any further advances of the
   Loan at any time thereafter, without notice, and until all Obligations are
   satisfied in full, such termination shall not affect the duties, covenants
   and liabilities of Borrower hereunder and all the terms, conditions and
   provisions hereof relating thereto shall continue to be fully operative until
   all transactions entered into and Obligations have been fully satisfied;

2) All or any portion of Obligations due or to become due whether under this
   Agreement or otherwise, shall, at the option of Lender, without notice,
   demand, presentment or dishonor, all

                                    7 of 10
<PAGE>
               of which Borrower hereby waives, become at once due and payable,
               and Lender shall thereupon have all the rights and remedies of a
               secured party under the Uniform Commercial Code as adopted by the
               State of Florida;

          3)   Lender may also, with or without proceeding with sale or
               foreclosure or demanding payment of a debt owning by Borrower to
               Lender, without notice, terminate further performance under this
               Agreement and may declare all outstanding amounts under the Loan
               Documents due and payable and proceed against the Collateral
               whether or not in the possession of Lender; and

          4)   To the extent either Borrower makes a payment or payments to
               Lender which payment or payments or any part thereof are
               subsequently invalidated, declared to be fraudulent or
               preferential, set aside or required to be repaid to a trustee,
               receiver or any other party under any bankruptcy act, state or
               federal law, common law or equitable cause, then, to the extent
               of such payment or repayment, the Obligation(s) or part thereof
               intended to be satisfied shall be revived and continued in full
               force and effect as if such payment had not been made.

     b)   Any failure or delay of Lender to exercise or enforce any rights,
          liens, powers or remedies hereunder or under any of the aforesaid
          agreements or other documents or security or Collateral shall not
          operate as a waiver of such liens, rights, powers and remedies, but
          all such liens, rights, powers and remedies shall continue in full
          force and effect until all loans and advances and all Obligations
          owing or to become owing from Borrower to Lender shall have been fully
          satisfied and all liens, rights, powers and remedies herein provided
          are cumulative and none is exclusive.

     c)   Lender may exercise any right or remedy it has under the Note which
          rights and remedies thereunder are not limited hereby.

SECTION 13.    MISCELLANEOUS

     a)   Further Assurances. From time to time, Borrower will execute and
          deliver to Lender such additional documents and will provide such
          additional information as Lender may reasonably require to carry out
          the terms of this Agreement and be informed of Borrower's status and
          affairs.

     b)   Payment. The Borrower agrees that as long as the Loan Documents are in
          full force and effect, it will make all payments on the Note, when
          due, by check duly mailed or delivered to Lender at the address
          indicated in the Notice section of this Agreement, or at such other
          place as Lender may designate to the Borrower in writing.

     c)   Successors and Assigns.  This Agreement shall bind and inure to the
          benefit of the respective successors and assigns of the parties
          hereto.

     d)   Waiver by Lender.   Lender shall have the right at all times to
          enforce the provisions of this Agreement and any other Loan Document
          executed pursuant hereto in accordance with the terms hereof and
          thereof, notwithstanding any conduct or custom on the part of Lender
          in refraining from so doing at any time. The failure of Lender at any
          time to enforce its rights under such provisions, in accordance with
          the same shall not be construed as having created a custom in any way
          or manner contrary to specific provisions of this Agreement or as
          having in any way or manner modified or waived the same. All rights
          and remedies of Lender are cumulative and concurrent and the exercise
          of one right or remedy shall not be deemed a waiver or release of any
          other right or remedy.

                                    8 of 10
<PAGE>
     e)  Costs/Expenses. Borrower will pay all reasonable costs and expenses
         related to the transactions contemplated hereby  including but not
         limited to, out-of-pocket expenses for payment of recording and filing
         fees, legal fees and expenses of counsel appointed by the Lender,
         together with any interest and penalties for the late payment thereof,
         all of which amounts shall be payable at the time of the execution of
         this Agreement or upon demand in the event they are hereafter incurred.

     f)  Attorney's Fees. If either of the Parties hereto should bring a Court
         action alleging breach of this Agreement or seeking to enforce,
         rescind, renounce, declare void or terminate this Agreement or any
         provisions thereof, the prevailing party shall be entitled to recover
         all of its legal expenses, including reasonable attorney's fees and
         costs (including legal expenses for any bankruptcy proceedings or
         appeals taken), and to have the same awarded as part of the judgment
         in the proceeding in which such legal expenses and attorney's fees were
         incurred.

     g)  Captions. The Agreement contains captions as to contents of the
         particular paragraphs. The captions set forth herein are inserted only
         for convenience and are in no way to be construed as part of this
         Agreement or as a limitation of the scope of the particular paragraph
         in which they are referred.

     h)  Construction of Agreement. Words of a gender used in this Agreement
         shall be held to include any other gender, the words in a singular
         number held to include the plural, when the sentence so requires.

     i)  Counterparts. This Agreement may be executed in several counterparts,
         each of which so executed shall be deemed to be an original, and said
         counterparts shall together constitute and be one and the same
         instrument.

     j)  Entire Agreement. This Agreement contains all of the oral and/or
         previously written agreements, representations, and arrangements
         between the Parties hereto with respect to the subject matter of this
         Agreement, and all right which the respective Parties may have had
         under any written agreements and/or oral agreements with respect to the
         subject matter of this Agreement are hereby canceled and terminated,
         and all Parties agree that there are no representations or warranties
         other than those set forth herein.

     k)  Invalidation. Should any part of this Agreement for any reason be
         declared invalid, such decision shall not effect the validity of any
         remaining portion, which remaining portion shall remain in full force
         and effect as if this Agreement had been executed with the invalid
         portion thereof eliminated. It is, therefore, declared the intention of
         the Parties hereto that each of them will have executed the remaining
         portion of this Agreement without including therein any such part,
         parts or portion which may, for any reason, be hereafter declared void.

     l)  Modification. No change or modification of this Agreement shall be
         valid unless the same shall be in writing and signed by each of the
         Parties hereto.

     m)  Notices. Any and all notices, designations, consents, offers,
         acceptances, or any other communication provided for herein shall be
         given in writing by hand delivery, by overnight carrier, by registered
         or certified mail or by facsimile transmission and shall be addressed
         as follows:

             As to Borrower:          Bankers Insurance Group, Inc.
                                      360 Central Avenue, 17th Floor
                                      St. Petersburg, Florida 33701

                                    9 of 10
<PAGE>
                                      Att: David B. Snyder
                                      Telephone: (727) 823-4000
                                      Telefax: (727) 823-6518

                                      and

                                      Bankers Underwriters, Inc.
                                      360 Central Avenue, 17th Floor
                                      St. Petersburg, Florida 33701
                                      Att: David B. Snyder
                                      Telephone: (727) 823-4000
                                      Telefax: (727)  823-6518

              As to Lender:           Insurance Management Solutions Group, Inc.
                                      360 Central Avenue, 16th Floor
                                      St. Petersburg, Florida 33701
                                      Att: David Howard, President
                                      Tel#: (727) 803-2040
                                      Fax: (727) 803-4093

     Notices sent by hand delivery shall be deemed effective on the date of hand
     delivery. Notices being sent by overnight carrier shall be deemed effective
     on the next business day after being placed into the hands of the overnight
     carrier. Notices sent by registered or certified mail shall be deemed
     effective on the third business day after being deposited into the post
     office. Notices sent by facsimile transmission shall be deemed to be
     effective on day when sent if sent prior to 5:00 p.m. (the time being
     determined by the time zone of the recipient) otherwise they shall be
     deemed effective on the next business day.

 n)  Representation Acknowledged.  The Parties acknowledge that each Party and
     its counsel have reviewed and revised this Agreement and that the normal
     rules of construction to the effect that any ambiguities are to be resolved
     against the drafting party shall not be employed in the interpretation of
     this Agreement or any amendments or exhibits hereto.

 o)  Applicable Law/Venue.  This Agreement shall be construed in accordance with
     and governed by the laws of the State of Florida, without regard to choice
     of law provisions. Further, the venue for any action brought to enforce any
     of the provisions hereof shall be in a state court of competent
     jurisdiction in Pinellas County, Florida and any action commenced in any
     other forum may be removed to a state court of competent jurisdiction in
     Pinellas County, Florida.

IN WITNESS WHEREOF, the Parties hereto have set their hands and seals, the day
and year first above written.

"BIG"
BANKERS INSURANCE GROUP, INC.,
a Florida corporation

By:     /s/ David B. Snyder
    ---------------------------
        Its Vice President,
        Assistant Secretary
         (CORPORATE SEAL)

                                    10 of 10

<PAGE>
"BUI"
BANKERS UNDERWRITERS, INC.
a Florida Corporation

By:          /s/ David B. Snyder
    ---------------------------------------
              Its Vice President
             Assistant Secretary
               (CORPORATE SEAL)

"Lender"
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC.,
a Florida corporation

By:            /s/ D. M. Howard
    ---------------------------------------
               Its President/CEO
               (CORPORATE SEAL)

                                    10 of 10

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