Document:

<PAGE>   1

EXHIBIT 10.2

                             MASTER PROMISSORY NOTE

$5,000,000.00                                                    August 14, 2001

         FOR VALUE RECEIVED, the undersigned, BANKERS INSURANCE GROUP, INC., a
Florida corporation (herein, "Debtor"), promises to pay to the order of
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC., a Florida corporation, together with
any other holder hereof (herein, "Holder"), the principal sum of Five-Million
and no/100 ($5,000,000.00) U.S. dollars, together with interest thereon from the
date hereon at a rate of the "Prime Rate" (as hereinafter defined) plus 1.5% per
annum, both principal and interest being payable at Holder's place of business,
360 Central Avenue, St. Petersburg, Florida 33701 or at such other places as
Holder may designate from time to time, in the following manner:

                Commencing on the first day of September 2001, all accrued and
                unpaid interest shall be due and payable on the first day of
                each calendar month of each and every year (a "Payment Date").
                All unpaid principal and interest shall be due and payable in
                full on February 28th, 2002.

Credit and Security Agreement. Unless the context shall otherwise require,
capitalized terms not defined herein shall have the meanings assigned thereto in
the Credit and Security Agreement dated of even date herewith being executed and
delivered by and between Debtor and Holder.

Rate. For the purposes of this Note, the "Prime Rate" shall mean the base rate
on corporate loans posted by at least 75% of the nation's 30 largest banks, as
quoted in the "Money Rates" section of the Wall Street Journal, or if such rate
is discontinued, then the Holder shall substitute an index, as determined by
Holder, to be comparable, in its sole discretion.

Proceeds. It is contemplated that all proceeds extended to Debtor under this
Note shall be used exclusively for advances to Bankers Underwriters, Inc., a
Florida corporation and wholly owned subsidiary of Debtor as well as for various
working capital requirements related to Debtor's ongoing operation.

Master Note. This Note is a master note, and it is contemplated that any amounts
and liability incurred in the ongoing operation thereof on behalf of Debtor and
as evidenced hereby will be advanced from time to time to the Debtor by Holder
in installments, as requested by the Debtor and agreed to by Holder, under the
Credit and Security Agreement of even date hereof between Debtor and Holder.

Advances. It is further contemplated that any amounts advanced under this Note
may be prepaid from time to time by the Debtor. Debtor may borrow, repay and
reborrow hereunder at any time, up to a maximum aggregate amount outstanding at
any one time equal to the principal amount of this Note, provided that Debtor is
not in default under any provision of this Note, any other documents executed in
connection with this Note, or any other note or other loan documents now or
hereafter executed in connection with any other obligation of Debtor to Holder,
and provided that the borrowings hereunder do not exceed any borrowing base or
other limitation on borrowings by Debtor. By reason of such prepayments hereon
there may be times when no indebtedness is owing hereunder, and notwithstanding
any such occurrence, this Note shall remain valid and shall be in full force and
effect as to each subsequent principal advance made hereunder. Each principal
advance and each payment made pursuant to this Note shall be reflected by
notations made by Holder on the grid attached hereto and Holder is

<PAGE>   2
                         MASTER PROMISSORY NOTE (cont.)

hereby authorized to record on such grid all such principal advances and
payments. The aggregate unpaid amounts reflected by the notations made by Holder
on the attached grid shall be deemed rebuttably presumptive evidence of the
principal amount remaining outstanding and unpaid on this Note. No failure of
Holder so to record any advance or payment shall limit or otherwise affect the
obligation of the Debtor hereunder with respect to any advance, and no payment
of principal by the Debtor shall be affected by the failure of Holder so to
record the same.

Advance Obligations. Nothing herein contained shall obligate or require Holder
to make any advances hereunder and all advances shall be made at the option of
Holder. Holder shall incur no liability for its refusal to advance funds based
upon its determination that any conditions of further advances have not been met
by Debtor. This Note shall be valid and enforceable as to the aggregate amount
advanced at any time hereunder, whether or not the full-face amount hereof is
advanced.

Application of Payments. Each payment on the indebtedness evidenced hereby will
first reduce charges related to this Note owed by the Debtor that are neither
principal nor interest. The remainder of each such payment will be applied first
to the interest then accrued on said principal sum remaining unpaid, and then to
the reduction of such unpaid principal. Any partial prepayments of principal
will be applied to installments due in the inverse order of their maturity and
no such partial prepayment of principal will have the effect of postponing,
satisfying, reducing, or otherwise affecting any scheduled installment before
the principal of and interest on this Note is, and all other charges due
hereunder are, paid in full. Principal and interest shall be payable in lawful
money of the United States of America.

Prepayment. The Holders hereof shall not incur any penalty upon the prepayment
of all or any part of the indebtedness evidenced hereby.

Interest Calculation. Interest shall be calculated on all amounts advanced based
on the actual number of days said amounts are outstanding. Interest shall be
computed on the basis of a year of actual number of days per year [i.e.
three-hundred-sixty-five (365) days] and charged for the actual number of days
in the payment period.

Maximum Rate. Debtor shall have no obligation to pay interest or payments in the
nature of interest in excess of the maximum rate of interest allowed to be
contracted for by law, as changed from time to time, applicable to this Note
(herein, "Maximum Rate"). Any interest in excess of the Maximum Rate paid by
Debtor (herein, "Excess Sum") shall be credited as a payment of principal, or,
if Debtor so requests in writing, returned to Debtor, or, if the indebtedness
and other obligations evidenced by this Note have been paid in full, returned to
Debtor together with interest at the same rate as was paid by Debtor during such
period. Any Excess Sum credited to principal shall be credited as of the date
paid to Holder. Holder may, without such action constituting a breach of any
obligations to Debtor, seek judicial determination of the applicable rate of
interest, and its obligation to pay or credit any proposed Excess Sum to Debtor.

Collateral. The obligations under this Note are secured by and subject to the
terms and conditions of the Credit and Security Agreement and various other loan
documents of even date hereof executed by and between Debtor and Holder,
respectively.

Past Due. Time is of the essence hereunder. If any payment of principal or
interest hereby required is overdue for more than ten (10) days, the Holder of
this Note may, at its option, and without notice, declare the entire balance of
principal then remaining unpaid to be immediately due and payable, and any

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<PAGE>   3
                         MASTER PROMISSORY NOTE (cont.)

failure to exercise said option shall not constitute a waiver of the right to
exercise the same at any other time. Further, Holder of this Note may, at its
option, and without notice, adjust the interest due on the aggregate principal
amount remaining due and unpaid, together with accrued interest, upward, to the
rate of eighteen (18.0%) per centum per annum, or the Maximum Rate of interest
permitted by law, whichever rate shall be the lesser, which rate of interest, as
adjusted upward, shall be paid on all sums due hereunder until the said sums
have been paid in full, regardless of any payments made by the maker hereof, and
accepted by the Holder, after said option has been exercised. Upon default in
making any payment hereby required, Debtor promises to pay all costs and
expenses, including reasonable attorney's fees (including the cost of any
appeals), of not less than ten (10.0%) percent, incurred in collecting this Note
by legal proceedings or through an attorney.

Remedies. The remedies of Holder herein and in the Credit and Security Agreement
shall be cumulative and concurrent, and may be pursued singularly, successively,
or together, at the sole discretion of Holder, and may be exercised as often as
occasion therefor shall arise. No action or omission of Holder, including
specifically any failure to exercise or forbearance in the exercise of any
remedy, shall be deemed to be a waiver or release of the same, such waiver or
release to be effected only through a written document executed by Holder and
then only to the extent specifically recited therein. A waiver or release with
reference to any one event shall not be construed as continuing or as
constituting a course of dealing, nor shall it be construed as a bar to, or as a
waiver or release of, any subsequent remedy as to a subsequent event.

Set-Off. In addition to all liens upon, and rights of set-off against, any
monies, securities, or other property of any of the Debtor given to Holder by
law, Holder shall have a lien upon and a right of set-off against all monies,
securities and other property of any of the Debtor now or hereafter in the
possession of, or on deposit with, Holder, whether held in a general or special
account or deposit, for safekeeping, in trust or otherwise, and every such lien
and right of set-off as may be exercised without demand upon or notice to any
Debtor, and the Holder shall have no liability with respect to any of Debtor's
checks or other items which may be returned or other funds transfers which may
not be made due to insufficient funds thereafter.

Exercise/Modification. Neither any failure nor any delay on the part of Holder
in exercising any right, power, or privilege under this Note shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right, power, or
privilege. No modification, amendment, or waiver of any provisions of this Note
shall be effective unless in writing and signed by a duly authorized officer of
Holder, and then the same shall be effective only in the specific instance and
for the purpose for which given. No notice to, or demand on, any Debtor in any
case shall entitle any Debtor to any other or further notice or demand in the
same, similar, or other circumstances.

Severability. Any provision of this Note which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

Waiver. Debtor and any other person liable for the payment hereof respectively,
hereby expressly waive any valuation and appraisal, presentment, demand for
payment, notice of dishonor, protest, notice of nonpayment or protest, all other
forms of notice whatsoever, and diligence in collection.

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                         MASTER PROMISSORY NOTE (cont.)

No Waiver. Acceptance of payments marked "payment in full" or "in satisfaction"
or words to similar effect shall not affect the duty of Debtor to pay all
obligations due hereunder, and shall not affect the right of Holder to pursue
all remedies available to it hereunder or under any other agreement between the
Debtor hereof and the Holder, including but not limited to the Credit and
Security Agreement and Stock Option Agreement each dated of even date herewith.

Jury Trial. DEBTORS AND ANY OTHER PERSON LIABLE FOR PAYMENT HEREOF, BY EXECUTING
THIS NOTE OR ANY OTHER DOCUMENT CREATING SUCH LIABILITY, WAIVE THEIR RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, WHETHER ARISING IN CONTRACT OR TORT, BY STATUTE OR
OTHERWISE, IN ANY WAY RELATED TO THIS NOTE. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR HOLDER'S EXTENDING CREDIT TO DEBTORS AND NO WAIVER OR LIMITATION
OF HOLDER'S RIGHTS UNDER THIS PARAGRAPH SHALL BE EFFECTIVE UNLESS IN WRITING AND
MANUALLY SIGNED ON HOLDER'S BEHALF.

Jury Trial Consideration. Debtor acknowledge that the above paragraph has been
expressly bargained for by Holder as part of the loan evidenced hereby and that,
but for Debtor's agreement and the agreement of any other person liable for
payment hereof thereto, Holder would not have extended the loan for the term and
with the interest rate provided herein.

Binding. The provisions of this Note shall be binding upon the heirs,
successors, and assigns of Debtor, except that Debtor may not assign or transfer
its obligation hereunder without the written consent of Holder, and shall inure
to the benefit of Holder, its successors, and assigns.

Governing Law. This Note is to be governed by and construed under the laws of,
the State of Florida, without regard to choice of law provisions as amended,
except as modified by the laws and regulations of the United States of America.

Venue. Debtor hereby consents and submits to the jurisdiction of the courts of
the State of Florida, and, notwithstanding his, her, their, or its place of
residence or organization or the place of execution of this Note, any litigation
relating hereto, whether arising in contract or tort, by statute or otherwise,
shall be brought in (and, if brought elsewhere, may be transferred to) a State
court of competent jurisdiction in Pinellas County, Florida.

Paragraph Headings; Gender and Number. The headings inserted at the beginning of
each paragraph are for convenience of reference only and shall not limit or
otherwise affect or be used in the construction of any of the terms or
provisions hereof. The plural shall include the singular and the singular, the
plural, wherever the context so admits. The masculine shall include the feminine
and the neuter; the feminine, the masculine and the neuter; and the neuter, the
masculine and the feminine.

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<PAGE>   5

                         MASTER PROMISSORY NOTE (cont.)

         IN WITNESS WHEREOF, Debtor has caused this Note to be signed, sealed
and delivered in its name on the day and year first above written.

                                        DEBTOR:
                                        Bankers Insurance Group, Inc.

                                                 s/s G. Kristin Delano
                                        ----------------------------------------

                                        By:               G. Kristin Delano
                                                 -------------------------------
                                        As Its:           Secretary
                                                 -------------------------------

                                     5 of 5<PAGE>   1
EXHIBIT 10.3

                       COLLATERAL ASSIGNMENT OF FLOOD BOOK

         THIS COLLATERAL ASSIGNMENT is executed as of this 14 day August, 2001,
by Bankers Underwriters, Inc., a Florida corporation with its principal place of
business located in St. Petersburg, Florida (herein, "Pledgor").

                                R E C I T A L S:

         1. Insurance Management Solutions Group, Inc., a Florida corporation
with its principal place of business located in St. Petersburg, Florida,
(herein, "Lender") has established a line of credit (herein, "Credit Line") in
favor of Bankers Insurance Group, Inc., a Florida corporation (herein,
"Borrower"), in the amount of Five million ($5,000,000.00) dollars evidenced by
Borrower's Master Promissory Note (herein, "Note") of even date herewith and in
like principal amount.

         2. In connection with the establishment of the Credit Line, Borrower
and Pledgor have executed and delivered the following documents, all dated of
even date herewith (herein together with the within document shall be called,
"Loan Documents") - Note, Credit and Security Agreement, Absolute Assignment of
Flood Book (herein, "Absolute Assignment"), Further Assurances and Compliance
Agreement and Stock Option Agreement.

         3. Borrower, as the immediate parent of Pledgor, has agreed to advance
up to the entire amount of the proceeds of the Credit Line to Pledgor.

         4. Pledgor, as a Florida general insurance agent for Bankers Insurance
Company and First Community Insurance Company is the owner of the Flood Book.
For purposes hereof the Flood Book shall mean all of Pledgor's right, title and
interest in and to all of the following, whether now owned or hereafter
acquired, together with all replacements therefor and proceeds (including but
without limitation, insurance policies) thereof:

                  Accounts and contract rights, as those terms are defined by
                  the Uniform Commercial Code as adopted by the State of
                  Florida, with insurance agents, including but not limited to
                  general agents with respect to the sale of federal flood
                  insurance

         5. Lender has, as a condition precedent to establishing such line of
credit, required the execution of this Assignment.

         NOW, THEREFORE, in consideration of the aforesaid Credit Line as well
as for other good and valuable consideration, Pledgor hereby grants to Lender a
first lien security interest in and to the Flood Book to Lender as security for
the repayment of all sums advanced on the Credit Line and for the performance by
Borrower and Pledgor of all covenants and agreements under the Loan Documents in
accordance with the following terms and conditions. Unless the context shall
otherwise require, capitalized terms used and not defined herein shall have the
meanings assigned thereto in the Credit and Security Agreement dated of even
date herewith between Lender and Borrower (herein, "Credit Agreement").

<PAGE>   2

         1. POWER OF ATTORNEY. Pledgor irrevocably nominates, constitutes and
appoints Lender its true and lawful attorney in fact, with full power of
substitution and revocation for it, in its name, place and stead and either in
the name of Lender or in the name of Pledgor to assign any agency agreements
between Pledgor and agents responsible for the production of federal flood
insurance policies as well as any other instruments, agreements or certificates
necessary or appropriate to give full force an effect to such assignment which
assignment may be to Lender, to First Community Insurance Company or to such
other party as Lender may, in the exercise of its absolute discretion select
whether pursuant to the delivery of the Absolute Assignment or otherwise, but
Lender shall not be under any duty to exercise any such authority or power or in
any way be responsible for the collection of any sums owing under the Flood
Book. All rights, powers and authority of said attorney-in-fact to exercise any
and all rights and powers herein granted shall commence and be in full force and
effect as of the date of this Agreement and such rights, powers and authority
shall remain in full force and effect thereafter until the obligations of
Borrower and Pledgor under the Loan Documents have been satisfied in full
However, Lender shall not deliver the Absolute Assignment or otherwise exercise
its rights under this Power of Attorney until there is an occurrence of an Event
of Default hereunder. The power set forth herein is a power coupled with an
interest.

         2. AFFIRMATIVE COVENANTS. Pledgor hereby covenants with Lender that
until the obligations of Borrower and Pledgor under the Loan Documents have been
satisfied in full and for so long as any amount remains outstanding under the
Credit Line, Pledgor will keep the Flood Book free from all liens, encumbrances
and security interests and pay and discharge when due all taxes, levies and
other charges upon them and defend them against all claims of any kind.

         3. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Lender that it is the lawful owner and holder of the Flood Book described above,
that:

                (a)     Pledgor has good right to sell, transfer and assign the
                        same as aforesaid.

                (b)     There are no actions, suits or proceedings pending or,
                        to the knowledge of Pledgor, threatened against or
                        affecting it whether civil, criminal, administrative or
                        investigative, and it is not in default with respect to
                        any judgment, decision, order, writ, injunction, decree
                        or demand of any court or governmental authority;

                (c)     The consummation of the transactions hereby contemplated
                        in performance of this Agreement or of any of the Loan
                        Documents 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 or
                        other instrument to which Pledgor is a party, or by
                        which it is bound or affected;

                (d)     Pledgor is a corporation duly organized, validly
                        existing and in good standing under the laws of the
                        State of Florida; Pledgor has all corporate powers to
                        own its properties and to engage in the business it
                        conducts, and 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;

<PAGE>   3

                (e)     All of the representations and warranties set forth in
                        this paragraph 3 shall survive the execution and
                        delivery of this Agreement and the other Loan Documents
                        until obligations of Borrower and Pledgor under the Loan
                        Documents have been satisfied in full and all
                        outstanding amounts due under the Credit Line are paid
                        in full.

         4. EVENTS OF DEFAULT. The phrase Event of Default shall have the
definition assigned to such phrase under the Credit Agreement, and any Event of
Default under the Credit Agreement shall constitute an Event of Default
hereunder.

         5. DEFAULT REMEDIES. Upon any Event of Default, all or any portion of
amounts due or to become due from Borrower to Lender under the Note, shall, at
the option of Lender, without demand, presentment or dishonor all of which
Pledgor 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. The 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 of 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 under the Credit Line shall have
been fully satisfied.

         6. TERMINATION OF AGREEMENT. This Agreement shall terminate upon the
satisfaction in full of all obligations of Borrower and Pledgor under the Loan
Documents, including but not limited to payment in full of all amounts
outstanding under the Loan Documents.

         7. MODIFICATION. No change or modification of this Agreement shall be
valid unless the same shall be in writing and signed by all of the parties
hereto.

         8. CAPTIONS. The paragraph captions as to contents of the particular
paragraphs 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.

         9. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which so executed shall deem to be an original and said
counterpart shall, together constitute and be one and the same instrument.

         10. 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.

         11. 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 force and effect as if the
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.

         12. ATTORNEY'S FEES. Subject to reasonable construction and sound
business practices, if Borrower, Pledgor or Lender should bring a Court action
alleging breach of this Agreement or seeking to enforce, rescind, renounce,
declare, void or terminate this Agreement or

<PAGE>   4

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 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.

         13. 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, Borrower has set its hand and seal the day and year
first above written.

Signed sealed and delivered                     Bankers Insurance Group, Inc.
In the presence of:                             a Florida corporation

s/s Lisa M. Powell                              By:      G. Kristin Delano
------------------------------------                --------------------------
Signature                                       As its:  Secretary

s/s Harold David Holland
------------------------------------
Name legibly printed, typewritten or stamped

Signed sealed and delivered                     Bankers Underwriters, Inc.
In the presence of:                             a Florida corporation

s/s Lisa M. Powell                              By:      Richard Torra
------------------------------------                --------------------------
Signature                                       As its:  Corporate Secretary

s/s Harold David Holland
--------------------------------------------
Name legibly printed, typewritten or stamped

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