<PAGE>
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K
(Mark one)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934.

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
Or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

        For the transition period from _______________ to ______________

                         COMMISSION FILE NUMBER 0-7201.

                              BROWN & BROWN, INC.
             (Exact name of Registrant as specified in its charter)


<TABLE>
<S>                                                                 <C>
                 FLORIDA                                                          59-0864469
(State or other jurisdiction of incorporation or                    (I.R.S. Employer Identification Number)
              organization)
</TABLE>


              220 SOUTH RIDGEWOOD AVENUE, DAYTONA BEACH, FL 32114
              (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (386) 252-9601

          Securities registered pursuant to Section 12(b) of the Act:


<TABLE>
<CAPTION>
     Title of each class                               Name of each exchange on which Registered
     -------------------                               -----------------------------------------
<S>                                                    <C>
COMMON STOCK, $0.10 PAR VALUE                                       NEW YORK STOCK EXCHANGE
RIGHTS TO PURCHASE COMMON STOCK                                    NEW YORK STOCK EXCHANGE
</TABLE>


        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.  Yes [X]   No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
Registrant (i.e., other than directors, officers, or holders of more than 5%
of the Registrant's common stock) computed by reference to the last reported
price at which the stock was sold on February 13, 2002, was $1,764,196.

THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, $.10 PAR VALUE,
OUTSTANDING AS OF FEBRUARY 11, 2002 WAS 63,333,912.


<PAGE>


                              BROWN & BROWN, INC.

                            FORM 10-K ANNUAL REPORT
                      FOR THE YEAR ENDED DECEMBER 31, 2001


                                     PART I


ITEM 1.  BUSINESS

GENERAL
 
We are the largest insurance agency and brokerage headquartered in the
southeastern United States and the eighth largest in the country, based on 2000
total revenues. The name of the company following the 1993 combination of Brown
& Brown, Inc., which commenced doing business in 1939, and Poe & Associates,
Inc., which commenced doing business in 1959, was Poe & Brown, Inc. The name was
changed to Brown & Brown, Inc. in 1999.
 
We market and sell to our clients insurance products and services, primarily in
the property and casualty area. As an agent and broker, we do not assume
underwriting risks. Instead, we provide our clients with quality insurance
contracts, as well as other targeted, customized risk management products.
 
We are compensated for our services primarily by commissions paid by insurance
companies and fees paid by clients for certain services. The commission is
usually a percentage of the premium paid by the insured. Commission rates
generally depend upon the type of insurance, the particular insurance company
and the nature of the services provided by us. In some cases, a commission is
shared with other agents or brokers who have acted jointly with us in a
transaction. We may also receive from an insurance company a contingent
commission that is generally based on the profitability and volume of business
placed with it by us over a given period of time. Fees are principally generated
by our Services Division, which offers third-party administration, benefit
consulting and managed healthcare services primarily in the workers'
compensation and employee benefit markets. The amount of our income from
commissions and fees is a function of, among other factors, continued new
business production, retention of existing clients, acquisitions and
fluctuations in insurance premium rates and insurable exposure units.
 
Premium pricing within the property and casualty insurance underwriting industry
has historically been cyclical, displaying a high degree of volatility based on
prevailing economic and competitive conditions. From the mid-1980s through 1999,
the property and casualty insurance industry experienced a "soft market" during
which the underwriting capacity of insurance companies expanded, stimulating an
increase in competition and a decrease in premium rates and related commissions.
The effect of this softness in rates on our revenues was somewhat offset by our
acquisitions and new business production. As a result of increasing "loss
ratios" (the comparison of incurred losses plus adjustment expense against
earned premiums) of insurance companies through 1999, there was a general
increase in premium rates beginning in the first quarter of 2000 and continuing
through the fourth quarter of 2001. Although premium increases vary by line of
business, geographical region, insurance company and specific underwriting
factors, we believe this was the first time since 1987 that we operated in an
environment of increased premiums for eight consecutive quarters. Additionally,
in light of the events of September 11, 2001, insurance companies, as well as
reinsurers, may extend this trend of increasing premium rates. While we cannot
predict the timing or extent of premium pricing changes as a result of market
fluctuations or their effect on our operations in the future, we believe that
premium rates will continue to increase through at least 2002.
 
Beginning in 1993 through 2001, we acquired 86 insurance agency operations
(excluding acquired books of business) that had aggregate estimated annual
revenues of $240.0 million for the 12 calendar months immediately following the
date of acquisition. Of these, 26 operations were acquired during 2001, with
aggregate estimated annual revenues of $148.0 million for the 12 calendar months
immediately following the date of acquisition, including our asset acquisition
of the insurance agency business-related assets of Riedman Corporation,
effective January 1, 2001,



                                       2

<PAGE>
 
with estimated annual revenues of $54.0 million for the 12 calendar months
immediately following the date of acquisition. The large number of acquisitions
in 2001 was largely due to the then-anticipated elimination of
pooling-of-interests accounting for stock acquisitions, which encouraged the
shareholders of certain agencies, especially "C" corporations, to accelerate the
sale of their stock to us. As of December 31, 2000, our activities were
conducted in 39 locations in 12 states; however, with the acquisitions
consummated during 2001, we had 140 locations in 28 states:
 

<Table>
<S>                               <C>        <C>                               <C>
Florida.........................   45        Connecticut.....................    2
New York........................   20        Michigan........................    2
Virginia........................    8        New Jersey......................    2
Louisiana.......................    7        Pennsylvania....................    2
Minnesota.......................    6        Wisconsin.......................    2
Colorado........................    5        Indiana.........................    1
North Dakota....................    5        Iowa............................    1
South Carolina..................    5        Missouri........................    1
Georgia.........................    4        Nevada..........................    1
Texas...........................    4        North Carolina..................    1
Arizona.........................    3        Ohio............................    1
California......................    3        Oklahoma........................    1
New Mexico......................    3        Tennessee.......................    1
Washington......................    3        Wyoming.........................    1
</Table>

 
Our business is divided into four segments: (1) the Retail Division; (2) the
National Programs Division; (3) the Services Division; and (4) the Brokerage
Division. The Retail Division provides a broad range of insurance products and
services to commercial, governmental, professional and individual clients. The
National Programs Division is comprised of two units: Professional Programs,
which provides professional liability and related package products for certain
professionals; and Special Programs, which markets targeted products and
services designated for specific industries, trade groups and market niches.
These programs and products are marketed and sold primarily through independent
agencies and agents across the United States. For these programs, we receive an
"override commission," which is a commission based upon the commissions
generated by these independent agencies. The Services Division provides
insurance-related services, including third-party administration, consulting for
the workers' compensation and employee benefit self-insurance markets and
managed healthcare services. The Brokerage Division markets and sells excess and
surplus commercial insurance and reinsurance, primarily through independent
agents and brokers. In 2001, we generated commission and fee revenues of $359.7
million.
 
The following table sets forth a summary of (1) the commission and fee revenues
generated by each of our operating segments for 2001, 2000 and 1999, and (2) the
percentage of our total commission and fee revenues represented by each segment
for each such period:
 

<Table>
<Caption>
----------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT
PERCENTAGES)                        2001         %        2000         %        1999         %
----------------------------------------------------------------------------------------------
<S>                             <C>         <C>       <C>         <C>       <C>         <C>
Retail Division(1)..........    $281,118      78.2    $195,222      75.6    $178,667      77.2
National Programs Division..      42,176      11.7      34,011      13.2      29,988      13.0
Services Division...........      24,509       6.8      21,299       8.2      16,874       7.3
Brokerage Division..........      11,894       3.3       7,777       3.0       5,908       2.5
                                --------------------------------------------------------------
          Total.............    $359,697     100.0    $258,309     100.0    $231,437     100.0
----------------------------------------------------------------------------------------------
</Table>

 
(1) Numbers and percentages have been restated to give effect to acquisitions
accounted for under the pooling-of-interests method of accounting. In addition,
we made acquisitions accounted for under the purchase method of accounting
during those periods, which affect the comparability of results. See
"Management's discussion and analysis of financial condition and results of
operations: General" and notes 2 and 3 of the notes to our consolidated
financial statements for a description of our acquisitions.
 
                                       3


<PAGE>
 
DIVISIONS
 
RETAIL DIVISION
 
As of December 31, 2001, our Retail Division operated in 26 states and employed
approximately 2,320 persons. Our retail insurance agency business provides a
broad range of income products and sources to commercial, governmental,
professional and individual clients. The categories of insurance principally
sold by us are: Property insurance against physical damage to property and
resultant interruption of business or extra expense caused by fire, windstorm or
other perils; and Casualty insurance relating to legal liabilities, workers'
compensation, commercial and private passenger automobile coverages, and
fidelity and surety insurance. We also sell and service group and individual
life, accident, disability, health, hospitalization, medical and dental
insurance.
 
No material part of our retail business is attributable to a single client or a
few clients. During 2001, commissions and fees from our largest single Retail
Division client represented less than one percent of the Retail Division's total
commission and fee revenues.
 
In connection with the selling and marketing of insurance coverages, we provide
a broad range of related services to our clients, such as risk management
surveys and analysis, consultation in connection with placing insurance
coverages and claims processing. We believe these services are important factors
in securing and retaining clients.
 
NATIONAL PROGRAMS DIVISION
 
As of December 31, 2001, our National Programs Division employed approximately
200 persons. Our National Programs Division consists of two units: Professional
Programs and Special Programs.
 
Professional Programs.  Professional Programs provides professional liability
and related package products for certain professionals delivered through
nationwide networks of independent agents. Professional Programs tailors
insurance products to the needs of a particular professional group, negotiates
policy forms, coverages and commission rates with an insurance company and, in
certain cases, secures the formal or informal endorsement of the product by a
professional association. The professional groups serviced by the National
Programs Division include dentists, lawyers, physicians, optometrists and
opticians. These programs are marketed and sold primarily through a national
network of independent agencies. We also market a variety of these products
through certain of our retail offices. Under agency agreements with the
insurance companies that underwrite these programs, we often have authority to
bind coverages, subject to established guidelines, to bill and collect premiums
and, in some cases, to process claims.
 
Below are brief descriptions of the programs offered to these major professional
groups:
 
- Dentists:  The Professional Protector Plan(R) is a package insurance policy
that provides comprehensive coverage for dentists, dental schools and dental
students, including practice protection and professional liability. This
program, initiated in 1969, is endorsed by a number of state and local dental
societies and is offered in 49 states, the District of Columbia, the U.S. Virgin
Islands and Puerto Rico. We believe that this program presently insures
approximately 20% of the eligible practicing dentists within our marketing
territories.
 
- Lawyers:  We began marketing lawyers' professional liability insurance in
1973, and the national Lawyer's Protector Plan(R) was introduced in 1983. This
program is presently offered in 47 states, the District of Columbia and Puerto
Rico.
 
- Physicians:  We market professional liability insurance for physicians,
surgeons and other health care providers through a program known as the
Physicians Protector Plan(R). This program, initiated in 1980, is currently
offered in five states.

                                       4

<PAGE>
 
- Optometrists and Opticians:  The Optometric Protector Plan(R) ("OPP(R)") and
the Optical Services Protector Plan(R) ("OSPP(R)") were created in 1973 and
1987, respectively, to provide optometrists and opticians with a package of
practice and professional liability coverage. These programs insure optometrists
and opticians in all 50 states and Puerto Rico.
 
Special Programs.  This unit markets targeted products and services designated
for specific industries, trade groups and market niches. Special Programs
consists of the following:
 
- Florida Intracoastal Underwriters, Limited Company ("FIU") is a managing
general agency that specializes in providing insurance coverage for coastal and
inland high-value condominiums and apartments. FIU has developed a specialty
reinsurance facility to support the underwriting activities associated with
these risks. One of our subsidiaries has a 75% ownership interest in FIU.
 
- Parcel Insurance Plan(R) ("PIP(R)") is a specialty insurance agency providing
insurance coverage to commercial and private shippers for small packages and
parcels with insured values of less than $25,000 each.
 
- Program Management Services is a managing general agent that offers unique
property and casualty insurance products targeted at governmental entities on a
national basis.
 
- Apollo Financial Corporation offers targeted insurance products to social
services organizations.
 
- Commercial Programs serves the insurance needs of certain specialty
trade/industry groups. Programs offered include:
 
    - Manufacturers Protector Plan(R).  Introduced in 1997, this program
    provides specialized coverages for manufacturers, with an emphasis on
    selected niche markets.
 
    - Wholesalers & Distributors Preferred Program(R).  Introduced in 1997, this
    program provides property and casualty protection for businesses principally
    engaged in the wholesale-distribution industry.
 
    - Railroad Protector Plan(R).  Also introduced in 1997, this program is
    designed for contractors, manufacturers and other entities that service the
    needs of the railroad industry.
 
    - Environmental Protector Plan(R).  This program was introduced in 1998 and
    is currently offered in 36 states. It provides a variety of specialized
    environmental coverages, with an emphasis on municipal Mosquito Control and
    Water Control Districts.
 
    - Food Processors Preferred Program(SM).  This program, introduced in 1998,
    provides property and casualty insurance protection for businesses involved
    in the handling and processing of various foods.
 
During 2001, we discontinued the following Commercial Programs due to loss of
underwriting insurance companies: Towing Operators Protector Plan(R); Automobile
Dealers Protector Plan(R); Automobile Transporters Protector Plan(R); Automotive
Aftermarket Protector Plan(R); High-Tech Target Program(SM) and Assisted Living
Facilities Protector Plan(R). We are currently evaluating the continued
viability of these and certain other programs.
 
SERVICES DIVISION
 
At December 31, 2001, the Services Division employed approximately 325 persons
and consisted of subsidiaries that provide the following services: (1)
insurance-related services as a third-party administrator and consultant for
employee health and welfare benefit plans; (2) insurance-related services
providing comprehensive risk management and third-party administration to
insurance
 
                                       5

<PAGE>
 
entities and self-funded or fully-insured workers' compensation and liability
plans; and (3) certified managed care and utilization management services for
both insurance programs and self-funded plans.
 
In connection with its employee benefit plan administrative services, the
Services Division provides third-party administration and consulting related to
benefit plan design and costing, arrangement for the placement of stop-loss
insurance and other employee benefit coverages, and settlement of claims.
Services Division units also provide utilization management services such as
pre-admission review, concurrent/retrospective review, pre-treatment review of
certain non-hospital treatment plans and medical and psychiatric case
management. In addition to the administration of self-funded health care plans,
this unit offers administration of flexible benefit plans, including plan
design, employee communication, enrollment and reporting.
 
The Services Division's workers' compensation and liability third-party
administration include claim administration, access to major reinsurance
markets, cost containment consulting, services for secondary disability and
subrogation recoveries and risk management services such as loss control. In
2001, our largest workers' compensation contract represented approximately 38%
of our workers' compensation third-party administration revenues, or
approximately 1.6% of our total commission and fee revenues. In addition, the
Services Division provides managed care services certified by the American
Accreditation Health Care Commission, which include medical networks, case
management and utilization review services.
 
BROKERAGE DIVISION
 
The Brokerage Division markets excess and surplus commercial insurance and
reinsurance to retail agencies primarily in the southeastern United States, as
well as throughout the United States, including through our Retail Division. The
Brokerage Division represents various U.S. and U.K. surplus lines companies and
is also a Lloyd's of London correspondent. In addition to surplus lines
insurance companies, the Brokerage Division represents admitted insurance
companies for smaller agencies that do not have access to large insurance
company representation. Excess and surplus products include commercial
automobile, garage, restaurant, builder's risk and inland marine lines.
Difficult-to-insure general liability and products liability coverages are a
specialty, as is excess workers' compensation coverage. Retail agency business
is solicited through mailings and direct contact with retail agency
representatives. At December 31, 2001, the Brokerage Division employed
approximately 80 persons.
 
In January 2002, the operations of Champion Underwriters, Inc., a subsidiary
based in Ft. Lauderdale, Florida that specializes in the marketing and selling
of excess and surplus commercial insurance, were combined with Peachtree Special
Risk Brokers, LLC, an affiliate headquartered in Atlanta Georgia that
specializes in the marketing and selling of excess and surplus lines of property
insurance.
 
In September 2001, we established Brown & Brown Re, Inc., a subsidiary based in
Stamford, Connecticut that specializes in treaty and facultative reinsurance
brokerage services.
 
EMPLOYEES
 
At December 31, 2001, we had approximately 3,000 employees. We have contracts
with our sales employees and certain other employees that include provisions
restricting their right to solicit our clients and employees after termination
of employment with us. The enforceability of such contracts varies from state to
state depending upon state statutes, judicial decisions and factual
circumstances. The majority of these contracts are terminable by either party;
however, the
 
                                       6

<PAGE>
 
agreements not to solicit our clients and employees generally continue for a
period of two or three years after employment termination.
 
None of our employees is represented by a labor union, and we consider our
relations with our employees to be satisfactory.
 
COMPETITION
 
The insurance agency and brokerage business is highly competitive, and numerous
firms actively compete with us for clients and insurance companies. Although we
are the largest insurance agency and brokerage headquartered in the southeastern
United States and were ranked in 2001, based on 2000 revenues, as the nation's
eighth largest by Business Insurance magazine, a number of firms with
substantially greater resources and market presence compete with us in the
southeastern United States and elsewhere. This situation is particularly
pronounced outside of Florida. Competition in the insurance business is largely
based on innovation, quality of service and price.
 
A number of insurance companies are engaged in the direct sale of insurance,
primarily to individuals, and do not pay commissions to third-party agents and
brokers. In addition, the Internet continues to be a source for direct placement
of personal lines business. To date, such direct writing has had relatively
little effect on our operations, primarily because our Retail Division is
commercially oriented.
 
In addition, to the extent that the Gramm-Leach-Bliley Financial Services
Modernization Act of 1999 and regulations recently enacted thereunder permit
banks, securities firms and insurance companies to affiliate, the financial
services industry may experience further consolidation, which in turn could
result in increased competition from diversified financial institutions,
including competition for acquisition candidates.
 
REGULATION, LICENSING AND AGENCY CONTRACTS
 
We or our designated employees must be licensed to act as agents by state
regulatory authorities in the states in which we conduct business. Regulations
and licensing laws vary in individual states and are often complex.
 
The applicable licensing laws and regulations in all states are subject to
amendment or reinterpretation by state regulatory authorities, and such
authorities are vested in most cases with relatively broad discretion as to the
granting, revocation, suspension and renewal of licenses. The possibility exists
that we or our employees could be excluded or temporarily suspended from
carrying on some or all of our activities in, or otherwise subjected to
penalties by, a particular state.
 
 
                                       7

<PAGE>


I
TEM 2.  PROPERTIES

We lease our executive offices, which are located at 220 South Ridgewood Avenue,
Daytona Beach, Florida 32114, and 401 East Jackson Street, Suite 1700, Tampa,
Florida 33602. We lease offices at every location with the exception of our
Ocala, Florida; Opelousas and Ruston, Louisiana; Washington, New Jersey;
Dansville, Hornell and Jamestown New York; and Grand Forks, North Dakota
offices, where we own the buildings. In addition, we own buildings in
Loreauville and Scott, Louisiana, and Penn Yan, New York, where we no longer
have offices, as well as a parcel of undeveloped property outside of Lafayette,
Louisiana. There is a mortgage on the Ocala, Florida building with an
outstanding balance as of December 31, 2001 of $0.6 million. There is also a
mortgage on the Grand Forks, North Dakota building with an outstanding balance
as of December 31, 2001 of $0.1 million. There are no outstanding mortgages on
our other owned properties. Set forth below is information relating to our
office locations as of December 31, 2001, summarized by business segment:
 
Retail Division Office Locations:
 
- Arizona:  Phoenix, Prescott, Tucson
 
- California:  Novato, Oakland, Thousand Oaks
 
- Colorado:  Colorado Springs, Denver, Ft. Collins, Longmont, Steamboat Springs
 
- Connecticut:  Newington
 
- Florida: Brooksville, Clearwater, Daytona Beach, Ft. Lauderdale, Ft. Myers,
Ft. Pierce, Jacksonville, Leesburg, Melbourne, Miami Lakes, Monticello, Naples,
Ocala, Orlando, Panama City, Pensacola, Perry, Port Charlotte, Sarasota, St.
Petersburg, Tallahassee, Tampa, Titusville, West Palm Beach, Winter Haven
 
- Georgia:  Atlanta, Canton, Rome
 
- Indiana:  Indianapolis
 
- Iowa:  Des Moines
 
- Louisiana:  Abbeville, Baton Rouge, Breaux Bridge, Lafayette, New Iberia,
Opelousas, Ruston
 
- Michigan:  Flint, Jackson
 
- Minnesota:  Duluth, East Grand Forks, Fairmont, Mankato, New Ulm, St. Cloud
 
- Nevada:  Las Vegas
 
- New Jersey:  Clark, Washington
 
- New Mexico:  Albuquerque, Roswell, Taos
 
- New York:  Avon, Clifton Park, Dansville, East Greenbush, Endicott, Geneva,
Hornell, Ithaca, Jamestown, Naples, Rochester, Rome, Sodus, Spencerport,
Syracuse, Wellsville, Williamsville, Wolcott
 
- North Dakota:  Bismarck, Fargo, Grand Forks, Jamestown, Minot
 
- Ohio:  Toledo
 
- Oklahoma:  Pryor
 
- Pennsylvania:  Bethlehem
 
- South Carolina:  Charleston, Georgetown, Greenville, Spartanburg, Union
 
- Tennessee:  Kingsport
 
- Texas:  El Paso, Houston
 
- Virginia:  Bristol, Manassas, Norfolk, Norton, Richlands, Richmond, Salem,
Virginia Beach
 
- Washington:  Seattle, Tacoma, Wenatachee
 
- Wisconsin:  Hartland, LaCrosse


                                       8

<PAGE>
 
- Wyoming:  Cheyenne
 
National Programs Division Office Locations:
 
- Professional Programs:  Tampa, Florida
 
- Special Programs:
 
    - Florida: Altamonte Springs, Miami Lakes, Plantation, Tampa
 
    - Missouri: St. Louis
 
    - New York: Mechanicville
 
    - Pennsylvania: Bethlehem
 
    - Texas: San Antonio
 
Services Division Office Locations:
 
- Florida:  Altamonte Springs, Daytona Beach, Orlando, Oviedo, St. Petersburg
 
- Louisiana:  Lafayette
 
Brokerage Division Office Locations:
 
- Connecticut:  Stamford
 
- Florida:  Daytona Beach, Ft. Lauderdale, Lake Mary, Orlando, St. Petersburg
 
- Georgia:  Atlanta
 
- New York:  Massapequa, Rochester
 
- North Carolina:  Charlotte
 
Our operating leases expire on various dates. These leases generally contain
renewal options and escalation clauses based on increases in the lessors'
operating expenses and other charges. We expect that most leases will be renewed
or replaced upon expiration. From time to time, we may have unused space and
seek to sublet such space to third parties, depending on the demand for office
space in the locations involved. See note 13 of the notes to our consolidated
financial statements for additional information on our lease commitments.


                                       9


<PAGE>


ITEM 3.       LEGAL PROCEEDINGS

On January 19, 2000, a complaint was filed in the Superior Court of Henry
County, Georgia, captioned Gresham & Associates, Inc. vs. Anthony T. Strianese,
et al. The complaint names us, certain of our subsidiaries and affiliates, and
two of their employees as defendants. The complaint alleges, among other things,
that we tortiously interfered with the contractual relationship between the
plaintiff and certain of its employees. The plaintiff alleges that we hired such
persons and actively encouraged them to violate the restrictive covenants
contained in their employment agreements with plaintiff. The complaint seeks
compensatory damages from us with respect to each of the two employees in
amounts "not less than $750,000" and seeks punitive damages for alleged
intentional wrongdoing in an amount "not less than $10,000,000." The complaint
also sought a declaratory judgment regarding the enforceability of the
restrictive covenants in the employment agreements and an injunction prohibiting
the violation of those agreements. The plaintiff subsequently dismissed the
claims for a declaratory judgment and an injunction, as well as its claims of
breach of contract against the two individual employees named as defendants.
Those individuals, and Peachtree Special Risk Brokers, LLC, one of our
affiliates named as a defendant in this action, have filed counterclaims against
the plaintiff, seeking damages, and seeking a declaratory judgment holding that
the restrictive covenants in the employment agreements are not enforceable. We
believe that we have meritorious defenses to each of the claims remaining in
this action, and intend to contest this action vigorously.
 
We are involved in various other pending or threatened proceedings by or against
us or one or more of our subsidiaries that involve routine litigation relating
to insurance risks placed by us and other contractual matters. Our management
does not believe that any of such pending or threatened proceedings will have a
materially adverse effect on our consolidated financial position or future
operations.


                                      10

<PAGE>


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of security holders during our
fourth quarter ended December 31, 2001.


                                      11

<PAGE>



                                    PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is listed on the New York Stock Exchange (NYSE) under the 
symbol "BRO". The table below sets forth, for the periods indicated, the
intra-day high and low sales prices for our common stock as reported on the
NYSE Composite Tape and dividends declared on our common stock. The stock
prices and dividends reflect the two-for-one common stock split on August 23,
2000 and the two-for-one common stock split on November 21, 2001. Each such
stock split was effected as a stock dividend.
 

<Table>
<Caption>
------------------------------------------------------------------------------------------------
                                                                 BROWN & BROWN
                                                                  COMMON STOCK
                                                         ---------------------              CASH
                                                           HIGH            LOW         DIVIDENDS
------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>            <C>
2000
  First Quarter......................................    $10.06         $ 7.81          $0.0325
  Second Quarter.....................................     13.11           9.50           0.0325
  Third Quarter......................................     16.00          11.86           0.0325
  Fourth Quarter.....................................     17.94          14.88           0.0375
2001
  First Quarter......................................    $19.96         $14.38          $0.0375
  Second Quarter.....................................     23.05          16.95           0.0375
  Third Quarter......................................     26.30          20.50           0.0375
  Fourth Quarter.....................................     31.50          23.70           0.0475
2002
  First Quarter (through February 13, 2002)..........    $36.33         $26.03          $0.0475
------------------------------------------------------------------------------------------------
</Table>

 
The last reported sale price of our common stock on the New York Stock Exchange
on February 13, 2002 was $35.10 per share. At February 11, 2002, there were
63,333,912 shares of our common stock outstanding, held by approximately 973
shareholders of record.


                                       12

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA


<Table>
<Caption>
------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,(1)
(IN THOUSANDS, EXCEPT PER SHARE DATA
AND PERCENTAGES)                            2001        2000        1999        1998        1997
------------------------------------------------------------------------------------------------
<S>                                     <C>         <C>         <C>         <C>         <C>
INCOME STATEMENT DATA:
Revenues
  Commissions and fees.............     $359,697    $258,309    $231,437    $211,722    $188,366
  Investment income................        3,686       4,887       3,535       4,350       5,431
  Other income.....................        1,646       2,209       2,551         718       2,315
                                        --------------------------------------------------------
          Total revenues...........      365,029     265,405     237,523     216,790     196,112
Expenses
  Employee compensation and
     benefits......................      187,653     149,836     131,270     119,879     111,277
  Other operating expenses.........       56,815      44,372      41,893      41,228      38,043
  Amortization.....................       15,860       9,226       8,343       6,329       6,057
  Depreciation.....................        6,536       6,158       5,892       5,216       4,764
  Interest.........................        5,703       1,266       1,360       1,233       1,684
  Non-cash stock grant
     compensation..................        1,984         483       1,263         732         176
                                        --------------------------------------------------------
          Total expenses...........      274,551     211,341     190,021     174,617     162,001
                                        --------------------------------------------------------
Income before income taxes and
  minority interest................       90,478      54,064      47,502      42,173      34,111
Income taxes.......................       34,834      20,146      18,331      16,179      13,408
Minority interest, net of income
  taxes............................        1,731       1,125         900         848         862
                                        --------------------------------------------------------
          Net income...............     $ 53,913    $ 32,793    $ 28,271    $ 25,146    $ 19,841
                                        --------------------------------------------------------
PER SHARE DATA:
Net income per share:
  Basic............................     $   0.86    $   0.53    $   0.46    $   0.41    $   0.32
  Diluted..........................     $   0.85    $   0.53    $   0.46    $   0.41    $   0.32
Weighted average number of shares
  outstanding:
  Basic............................       62,563      61,845      61,639      61,524      61,267
  Diluted..........................       63,222      62,091      61,655      61,524      61,267
Dividends declared per share.......     $ 0.1600    $ 0.1350    $ 0.1150    $ 0.1025    $ 0.0883
BALANCE SHEET DATA (PERIOD END):
Total assets.......................     $488,737    $324,677    $286,416    $285,028    $254,636
Long-term debt.....................       78,195      10,660      10,905      24,522      15,993
Shareholders' equity(2)............      175,285     118,372     100,355      82,073      72,377
</Table>


(1) All share and per share information has been restated to give effect to the
two-for-one common stock split that became effective November 21, 2001, the
two-for-one common stock split that became effective August 23, 2000 and the
three-for-two common stock split that became effective February 27, 1998. Each
stock split was effected as a stock dividend. Prior years' results have been
restated to give effect to acquisitions accounted for under the
pooling-of-interests method of accounting. In addition, we made acquisitions
accounted for under the purchase method of accounting during those periods,
which affect the comparability of results. See "Management's discussion and
analysis of financial condition and results of operations: General" and notes 2
and 3 of the notes to our consolidated financial statements for a description
of our acquisitions in 2001, 2000 and 1999.

(2) Shareholders' equity as of December 31, 2001, 2000, 1999, 1998 and 1997
included net increases (in thousands) of $4,393, $2,495, $4,922, $5,540 and
$6,744, respectively, as a result of our application of Statement of Financial
Accounting Standards (SFAS) No. 115, ""Accounting for Certain Investments in
Debt and Equity Securities."


                                      13

<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS
GENERAL

The following discussion should be read in conjunction with our consolidated
financial statements and notes to those consolidated financial statements,
included elsewhere in this report.
 
We are a general insurance agency and brokerage headquartered in Daytona Beach
and Tampa, Florida. Since the early 1980s, our stated corporate objective has
been to increase our net income per share by at least 15% every year. We have
increased revenues from $95.6 million in 1993 (as originally stated, without
giving effect to any subsequent acquisitions accounted for under the
pooling-of-interests method of accounting) to $365.0 million in 2001, a compound
annual growth rate of 18.2%. In the same period, we increased net income from
$8.0 million (as originally stated, without giving effect to any subsequent
acquisitions accounted for under the pooling-of-interests method of accounting)
to $53.9 million in 2001, a compound annual growth rate of 26.9%. We have also
increased net income per share 15.0% or more for nine consecutive years,
excluding the effect of a one-time investment gain of $1.3 million in 1994 and
favorable adjustments to our income tax reserves of $0.7 million in 1994 and
$0.5 million in 1995. Since 1993, excluding the historical impact of poolings,
our pre-tax margins improved in all but one year, and in that year, the pre-tax
margin was essentially flat. These improvements have resulted primarily from net
new business growth (new business production offset by lost business) and
continued operating efficiencies. Our growth in 2001 was primarily the result of
a higher than historical number of acquisitions, driven in large part by the
then-anticipated elimination of pooling-of-interests accounting treatment for
acquisitions, coupled with a general increase in premium rates and stronger net
new business growth.
 
Our revenues are comprised principally of commissions paid by insurance
companies, fees paid directly by clients and investment income. Commission
revenues generally represent a percentage of the premium paid by the insured and
are materially affected by fluctuations in both premium rate levels charged by
insurance underwriters and the insureds' underlying "insurable exposure units,"
which are units that insurers use to measure or express insurance exposed to
risk (such as property values, sales and payroll levels) so as to determine what
premium to charge the policyholder. These premium rates are established by
insurance companies based upon many factors, including reinsurance rates, none
of which we control. Beginning in 1987 and continuing through 1999, revenues
were adversely influenced by a consistent decline in premium rates resulting
from intense competition among property and casualty insurers for market share.
Among other factors, this condition of a prevailing decline in premium rates,
commonly referred to as a "soft market," generally resulted in flat to reduced
commissions on renewal business. The effect of this softness in rates on our
revenues was somewhat offset by our acquisitions and new business production.
As a result of increasing "loss ratios" (the comparison of incurred losses plus
adjustment expense against earned premiums) of insurance companies through 
1999, there was a general increase in premium rates beginning in the first
quarter of 2000 and continuing through the fourth quarter of 2001. Although 
premium rates vary by line of business, geographical region, insurance company
and specific underwriting factors, we believe this was the first time since
1987 that we operated in an environment of increased premiums for eight
consecutive quarters. Additionally, in light of the events of September 11,
2001, insurance companies, as well as reinsurers, may extend this trend of
increasing premium rates. While we cannot predict the timing or extent of
premium pricing changes as a result of market fluctuations or their effect on
our operations in the future, we believe that premium rates will continue to
increase through at least 2002.

The volume of business from new and existing clients, fluctuations in insurable
exposure units and changes in general economic and competitive conditions
further impact our revenues. For example, stagnant rates of inflation and the
general decline of economic activity in recent years have generally limited the
increases in the values of insurable exposure units. Conversely, the increasing
costs of litigation settlements and awards have caused some clients to seek
higher levels of insurance coverage. Still, our revenues continue to grow
through acquisitions and an intense focus


                                      14

<PAGE>
 
on net new business growth. We anticipate that results of operations for 2002
will continue to be influenced by these competitive and economic conditions.
 
We also earn "contingent commissions," which are revenue-sharing commissions
from insurance companies based upon the volume and the growth and/or
profitability of the business placed with such companies during the prior year.
These commissions are primarily received in the first and second quarters of
each year, and over the last three years, have averaged approximately 4.6% of
total commissions and fees. Contingent commissions are included in our total
commissions and fees in the consolidated statements of income in the year
received. The term "core commissions and fees" excludes contingent commissions
and represents the revenues earned directly from each specific insurance policy
sold or from fee-based services rendered.
 
Fee revenues are generated primarily by our Services Division, which provides
insurance-related services, including third-party administration, consulting for
the workers' compensation and employee benefit self-insurance markets and
managed healthcare services. In each of the past three years, fee revenues
generated by the Services Division have averaged approximately 6.8% of total
commissions and fees.
 
Investment income consists primarily of interest earnings on premiums and
advance premiums collected and held in a fiduciary capacity before being
remitted to insurance companies. Our policy is to invest available funds in
high-quality, short-term fixed income investment securities. Investment income
also includes gains and losses realized from the sale of investments.
 
ACQUISITIONS AND THE IMPACT OF THE POOLING-OF-INTERESTS METHOD OF ACCOUNTING
 
During 2001, we acquired the following 12 agency groups in stock-for-stock
transactions accounted for under the pooling-of-interests method of accounting:
 
- The Huval Companies
 
- Spencer & Associates, Inc. and SAN of East Central Florida, Inc.
 
- The Young Agency, Inc.
 
- Layne & Associates, Ltd.
 
- Agency of Insurance Professionals, Inc., CompVantage Insurance Agency, LLC and
Agency of Indian Programs Insurance, LLC
 
- Finwall & Associates Insurance, Inc.
 
- The Connelly Insurance Group, Inc.
 
- The Benefit Group, Inc.
 
- Logan Insurance Agency, Inc. and Automobile Insurance Agency of Virginia, Inc.
 
- Froelich-Paulson-Moore, Inc. and M&J Buildings, LLC
 
- McKinnon & Mooney, Inc.
 
- Raleigh, Schwarz & Powell, Inc.
 
We also acquired the assets of 12 general insurance agencies, several books of
business (client accounts) and the outstanding stock of two general insurance
agencies in transactions accounted for under the purchase method of accounting.
 
                                       15

<PAGE>
 
During 2000, we acquired the following four agency groups in stock-for-stock
transactions accounted for under the pooling-of-interests method of accounting:
 
- Bowers, Schumann & Welch
 
- The Flagship Group, Ltd.
 
- WMH, Inc. and Huffman & Associates, Inc.
 
- Mangus Insurance & Bonding, Inc.
 
We also acquired the assets of five general insurance agencies, several books of
business and the outstanding stock of two general insurance agencies in
transactions accounted for under the purchase method of accounting.
 
During 1999, we acquired the following two agency groups in stock-for-stock
transactions accounted for under the pooling-of-interests method of accounting:
 
- Ampher Insurance, Inc. and Ross Insurance of Florida, Inc.
 
- Signature Insurance Group, Inc. and C,S&D, a Florida general partnership.
 
We also acquired the assets of seven general insurance agencies, several books
of business and the outstanding stock of three general insurance agencies in
transactions accounted for under the purchase method of accounting.
 
The revenues and expenses of entities that were acquired and accounted for under
the purchase method of accounting are recognized only from the date of
acquisition, and therefore did not impact our previously reported historical
results. However, the applicable accounting rules require that our consolidated
financial statements be restated for all periods to include the results of
operations, financial positions and cash flows of entities acquired in
transactions accounted for under the pooling-of-interests method. Because most
of the pooled entities were operated as privately-held companies that paid
significant year-end bonuses and compensation to their principals and owners
during the periods prior to our acquisition of such entities, the combination of
their lower net income results with our results diluted our historically
reported profit margins, defined as income before income taxes and minority
interest as a percentage of total revenues. As restated, our profit margins were
24.8%, 20.4% and 20.0% in 2001, 2000 and 1999, respectively. Without giving
effect to any acquisitions accounted for under the pooling-of-interests method
in the year of acquisition or in any prior year, our profit margins were 27.9%,
27.4% and 26.2% in 2001, 2000 and 1999, respectively. We believe that, as we
continue to integrate these acquired entities, our profit margins will continue
to improve.
 
The pooling-of-interests method of accounting has been eliminated for all
business combinations initiated after June 30, 2001. This change in accounting
rules was the impetus for many of our acquisitions in 2001. The pace of our
ongoing acquisition activities may be significantly slower than it was in 2001,
although we will continue to seek qualified acquisition candidates. Future
acquisitions will be accounted for under the purchase method of accounting. See
note 1 of the notes to our consolidated financial statements.
 
See notes 2 and 3 of the notes to our consolidated financial statements for a
description of our acquisitions.
 
The following discussion and analysis regarding results of operations and
liquidity and capital resources should be considered in conjunction with the
accompanying consolidated financial statements and related notes.
 
                                       16

<PAGE>
 
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
 
COMMISSIONS AND FEES
 
Commissions and fees increased 39% in 2001, 12% in 2000 and 9% in 1999. Core
commissions and fees increased 11.3% in 2001, 11.1% in 2000 and 0.4% in 1999,
excluding commissions and fees generated from operations acquired that were
accounted for under the purchase method of accounting and excluding divested
operations. The 2001 and 2000 results reflect stronger premium rate increases
that began in the first quarter of 2000 and continued through 2001.
Additionally, the 2001 increase was impacted by the higher than historical
number of acquisitions consummated during that year. During 1999, property and
casualty insurance premium prices declined from the previous year, and this
decline was primarily responsible for the lower growth rate.
 
INVESTMENT INCOME
 
Investment income decreased to $3.7 million in 2001, compared with $4.9 million
in 2000 and $3.5 million in 1999. The decrease in 2001 is primarily a result of
lower available investment cash balances due to increased acquisition activity,
although lower investment yields also contributed to reduced income. The
increase in 2000 was primarily a result of higher levels of invested cash.
Investment income also included gains of approximately $0.3 million in 2001,
$0.2 million in 2000 and $0.1 million in 1999 realized from the sale of
investments in various equity securities and partnership interests.
 
OTHER INCOME
 
Other income consists primarily of gains and losses from the sale and
disposition of assets. In 2001, gains of $0.8 million were recognized from the
sale of client accounts that were primarily related to the Auto Dealer
Protector Plan(R), based in central Florida. Gains from the sale of client
accounts were $0.1 million in 2000, compared with gains of $0.4 million in 1999.
This decrease from 1999 to 2000 was primarily due to the gain on sales of
certain accounts in 1999 within the Lawyer's Protector Plan(R) of our National
Programs Division.
 
EMPLOYEE COMPENSATION & BENEFITS
 
Employee compensation and benefits increased approximately 25% in 2001, 14% in
2000 and 10% in 1999, primarily as a result of acquisitions and an increase in
commissions paid to new and existing employees. Employee compensation and
benefits as a percentage of total revenues was 51% in 2001, 56% in 2000 and 55%
in 1999. The percentages are higher in 2000 and 1999 due to higher compensation
and year-end bonuses paid to the principals and owners of pooled entities prior
to the dates of acquisition. We had approximately 3,000 full-time employees at
December 31, 2001, compared with approximately 2,140 at December 31, 2000 and
approximately 2,000 at December 31, 1999.
 
OTHER OPERATING EXPENSES
 
Other operating expenses increased 28% in 2001, 6% in 2000, and 2% in 1999.
Other operating expenses as a percentage of total revenues decreased to 16% in
2001 from 17% in 2000 and 18% in 1999. The continuing decline in other operating
expenses, expressed as a percentage of total revenues, is attributable to the
effective cost containment measures brought about by an initiative designed to
identify areas of excess expense, and to the fact that, in an increasing premium
rate environment, certain significant other operating expenses such as office
rent, office supplies and
 
                                       17

<PAGE>
 
telephone costs, increase at a slower rate than commission and fee revenues
increase during the same period.
 
DEPRECIATION
 
Depreciation increased 6% in 2001, 5% in 2000 and 13% in 1999. These increases
were primarily due to the purchase of new computer equipment and the
depreciation associated with acquired assets.
 
AMORTIZATION
 
Amortization expense increased $6.6 million, or 72%, in 2001, $0.9 million, or
11%, in 2000, and $2.0 million, or 32%, in 1999. The increase each year is due
to the additional amortization of intangibles as a result of new acquisitions.
See notes 1, 3 and 6 of the notes to our consolidated financial statements.
 
INTEREST EXPENSE
 
Interest expense increased $4.4 million, or 350%, in 2001, and decreased $0.9
million, or 7%, in 2000. On January 3, 2001, we obtained a $90 million term
loan, primarily to acquire the insurance agency business-related assets of
Riedman Corporation, which accounts for the increase in 2001. The average London
Interbank Offered Rate (LIBOR) for the interest paid on that loan in 2001 was
4.4%. Effective January 2, 2002, we entered into an interest rate swap agreement
to lock in an effective fixed interest rate of 4.53% for the remaining six years
of the term loan, excluding our "credit risk spread" (additional interest paid
to offset risk of default) between 0.5% and 1.0%. The decrease in 2000 was the
result of reduced outstanding debt.
 
NON-CASH STOCK GRANT COMPENSATION
 
Non-cash stock grant compensation expense represents the expense required to be
recorded under Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," relating to our stock performance plan, which is more
fully described in note 11 of the notes to our consolidated financial
statements.
 
The annual cost of this stock performance plan increases only when our average
stock price over a 20 trading day period increases by increments of 20% or more
from the price at the time of the original grant, or when more shares are
granted and the stock price increases.
 
During 2001, after the first vesting condition for most of the previously
granted performance stock was satisfied as a result of increases in our average
stock price over a 20 trading day period, we granted additional shares of
performance stock. With the awards granted in 2001 and the increase in our stock
price during that year, the expense for the stock performance plan increased to
$2.0 million in 2001 from $0.5 million in 2000. If our stock price continues to
increase in 2002, this expense could increase to as much as $3.0 million,
excluding the cost of any new shares granted.
 
INCOME TAXES
 
The effective tax rate on income from operations was 38.5% in 2001, 37.3% in
2000 and 38.6% in 1999.
 
                                       18

<PAGE>
 
RESULTS OF OPERATIONS--SEGMENT INFORMATION
 
As discussed in note 15 of the notes to our consolidated financial statements,
we operate in four business segments: the Retail, National Programs, Services
and Brokerage Divisions.
 
The Retail Division is our insurance agency business that provides a broad range
of insurance products and services to commercial, governmental, professional and
individual clients. Over 95% of the Retail Division's revenues are
commission-based. As a majority of our operating expenses do not change as
premiums fluctuate, we believe that a majority of any fluctuation in commissions
received by us will be reflected in our pre-tax income. The Retail Division's
revenues accounted for 77% to 80% of our total consolidated commissions and fees
over the last three years. The Retail Division's total revenues in 2001
increased $88.0 million to $287.6 million, a 44.1% increase over 2000. Of this
increase, approximately $69.8 million related to commissions and fees from
acquisitions accounted for under the purchase method of accounting that had no
comparable revenues in 2000. The remaining increase is primarily due to net new
business growth, which benefited from rising premium rates during 2001. Income
before income taxes and minority interest in 2001 increased $21.9 million to
$52.0 million, a 72.7% increase over 2000. This increase is due to acquired
revenues, increases in premium rates and the lack of comparable year-end bonuses
paid in 2000 related to the pooled entities. Total revenues in 2000 increased
$17.0 million to $199.5 million, a 9.3% increase over 1999. This increase is
primarily due to net new business growth and rising premium rates during 2000.
Income before income taxes and minority interest in 2000 increased $2.0 million
to $30.1 million, a 6.8% increase over 1999. This increase is due to net new
business growth, acquired revenues and rising premium rates.
 
The National Programs Division is comprised of two units: Professional Programs,
which provides professional liability and related package products for certain
professionals delivered through nationwide networks of independent agents; and
Special Programs, which markets targeted products and services designated for
specific industries, trade groups and market niches. Similar to the Retail
Division, essentially all of the National Programs Division's revenues are
commission-based. Total revenues in 2001 increased $7.0 million to $43.8
million, an 18.9% increase over 2000, of which $2.4 million was related to net
new business growth. All of this net new business growth was related to our
Special Programs Division, but was partially offset by the loss of approximately
$3.4 million of auto industry-related business that was terminated. Revenues
related to our Professional Programs Division were essentially flat for 2001;
however, prior to 2001, we experienced at least three years of 10% to 20% of
annual revenue declines in this business. Income before income taxes and
minority interest in 2001 increased $2.9 million to $17.9 million, a 19.6%
increase over 2000, due primarily to net increases in revenues. Total revenues
in 2000 increased $4.2 million to $36.8 million, a 12.8% increase over 1999, due
to net new business growth in the Special Programs Division, which was partially
offset by an 11.7% decline in the Professional Programs Division. Income before
income taxes and minority interest in 2000 increased $2.6 million to $14.9
million, a 20.7% increase over 1999, primarily due to revenue increases in
Special Programs.
 
The Services Division provides insurance-related services, including third-party
administration, consulting for the workers' compensation and employee benefit
self-insurance markets and managed healthcare services. Unlike our other
segments, over 90% of the Services Division's revenues are fees, which are not
significantly affected by fluctuations in general insurance premiums. The
Services Division's total revenues in 2001 increased $3.3 million to $25.0
million, a 15.4% increase over 2000. Of this increase, $2.3 million was the
result of net new business growth and the remaining portion was acquired. Income
before income taxes and minority interest in 2001 increased $0.9 million to $4.0
million, a 29.3% increase over 2000, primarily due to strong net new business
growth. Total revenues in 2000 increased $4.5 million to $21.6 million, a 26.6%
increase
 
                                      19

<PAGE>
 
over 1999. Of this increase, $2.7 million was the result of net new business
growth and the remaining portion was acquired. Income before income taxes and
minority interest in 2000 increased $0.5 million to $3.1 million, a 18.8%
increase over 1999, again due primarily to strong net new business growth.
 
The Brokerage Division markets and sells excess and surplus commercial insurance
and reinsurance, primarily through independent agents and brokers. Similar to
our Retail and National Programs Divisions, essentially all of the Brokerage
Division's revenues are commission-based. Total Brokerage revenues in 2001
increased $4.2 million to $12.2 million, a 53.1% increase over 2000, due
entirely to net new business growth. As a result of the Brokerage Division's
strong net new business growth, income before income taxes and minority interest
in 2001 increased $1.4 million to $4.1 million, a 51.5% increase over 2000.
Brokerage revenue in 2000 increased $1.6 million to $8.0 million, a 24.6%
increase over 1999, solely due to net new business growth. Income before income
taxes and minority interest for 2000 increased $0.6 million to $2.7 million, a
27.3% increase over 1999, again due to net new business growth.
 
QUARTERLY OPERATING RESULTS
 
The following table sets forth our quarterly operating results for 2001 and
2000:
 

<Table>
<Caption>
------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)  FIRST QUARTER   SECOND QUARTER   THIRD QUARTER   FOURTH QUARTER
------------------------------------------------------------------------------------------------------
<S>                                    <C>             <C>              <C>             <C>
2001
Total revenues.....................          $89,410          $89,933         $89,809          $95,877
Income before income taxes and
  minority interest................           21,753           21,229          21,623           25,873
Net income.........................           12,876           12,420          13,402           15,215
Net income per share:
  Basic............................          $  0.21          $  0.20         $  0.21          $  0.24
  Diluted..........................          $  0.20          $  0.20         $  0.21          $  0.24
------------------------------------------------------------------------------------------------------
2000
Total revenues.....................          $67,951          $65,002         $65,069          $67,383
Income before income taxes and
  minority interest................           16,272           13,504          14,593            9,695
Net income.........................            9,910            8,299           8,819            5,765
Net income per share:
  Basic............................          $  0.16          $  0.13         $  0.14          $  0.09
  Diluted..........................          $  0.16          $  0.13         $  0.14          $  0.09
------------------------------------------------------------------------------------------------------
</Table>

 
LIQUIDITY AND CAPITAL RESOURCES
 
Our cash and cash equivalents of $16.0 million at December 31, 2001 reflects a
decrease of $21.0 million from our December 31, 2000 balance of $37.0 million.
During 2001, $70.0 million of cash was provided from operating activities and
$90.1 million was received from long-term debt financing. From this borrowing
and existing cash balances, $131.0 million was used for acquisitions, $33.3
million was used to repay long-term debt, $9.7 million was used to pay dividends
and $11.0 million was used for additions to fixed assets.
 
Our cash and cash equivalents of $37.0 million at December 31, 2000 reflects an
increase of $2.3 million from the December 31, 1999 balance of $34.7 million.
During 2000, $42.3 million of cash
 
                                      20

<PAGE>
 
was provided from operating activities and $0.5 million was received from
long-term debt financing. From this financing and existing cash balances, $17.7
million was used for acquisitions, $5.5 million was used for purchases of our
stock, $4.5 million was used to repay long-term debt, $7.5 million was used to
pay dividends and $5.6 million was used for additions to fixed assets.
 
Our cash and cash equivalents of $34.7 million at December 31, 1999 reflects a
decrease of $5.6 million from the December 31, 1998 balance of $40.4 million.
During 1999, $44.2 million of cash was provided from operating activities and
$0.7 million was received from long-term debt financing. From this financing and
existing cash balances, $16.2 million was used for acquisitions, $1.2 million
was used for purchases of our stock, $17.9 million was used to repay long-term
debt, $6.2 million was used to pay dividends and $6.2 million was used for
additions to fixed assets.
 
Our ratio of current assets to current liabilities (the "current ratio") was
0.78 and 0.94 at December 31, 2001 and 2000, respectively. The decrease in the
current ratio in 2001 is primarily attributable to the use of cash and increased
debt to fund the higher level of acquisition activity.
 
In January 2001, we entered into a $90 million seven-year term loan agreement
with SunTrust Banks, Inc. Borrowings under this facility bear interest based
upon the 30-, 60- or 90-day LIBOR plus a margin ranging from 0.50% to 1.00%,
depending upon our quarterly ratio of funded debt to earnings before interest,
taxes, depreciation and amortization. Ninety-day LIBOR was 1.88% as of December
31, 2001. The loan was fully funded on January 3, 2001 and a balance of $77.1
million remained outstanding as of December 31, 2001. This loan is to be repaid
in equal quarterly principal installments of $3.2 million through December 2007.
Effective January 2, 2002, we entered into an interest rate swap agreement with
SunTrust Banks, Inc. to lock in an effective fixed interest rate of 4.53% for
the remaining six years of the term loan, excluding our credit risk spread
between 0.50% and 1.00%.
 
We also have a revolving credit facility with SunTrust Banks, Inc. that provides
for available borrowings of up to $50 million, with a maturity date of October
2002. Borrowings under this facility bear interest based upon the 30-, 60- or
90-day LIBOR plus a margin ranging from 0.45% to 1.00%, depending upon our
quarterly ratio of funded debt to earnings before interest, taxes, depreciation
and amortization. A commitment fee of 0.15% to 0.25% per year is assessed on the
unused balance. As noted above, 90-day LIBOR was 1.88% as of December 31, 2001.
There were no borrowings under this facility at December 31, 2001 or December
31, 2000.
 
We continue to maintain our credit agreement with Continental Casualty Company
(CNA) under which $2.0 million (the maximum amount available for borrowing) was
outstanding at December 31, 2001. The available amount will decrease by $1.0
million each August through 2003.
 
All three of our credit agreements require us to maintain certain financial
ratios and comply with certain other covenants. We were in compliance with all
such covenants as of December 31, 2001.
 
We believe that our existing cash, cash equivalents, short-term investment
portfolio, funds generated from operations and the availability of the bank line
of credit will be sufficient to satisfy our normal liquidity needs through at
least the end of 2002. Additionally, we believe that funds generated from future
operations will be sufficient to satisfy our normal liquidity needs, including
the required annual principal payments on our long-term debt.
 
In December 2001, a universal "shelf" registration statement that we filed with
the Securities and Exchange Commission covering the public offering and sale,
from time to time, of up to an aggregate of $250 million of debt and/or equity
securities, was declared effective. The primary use of this capital would be to
fund acquisitions. 
 
                                      21

<PAGE>



DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

         We make "forward-looking statements" within the "safe harbor" provision
of the Private Securities Litigation Reform Act of 1995 throughout this report
and in the documents we incorporate by reference into this report. You can
identify these statements by forward-looking words such as "may," "will,"
"expect," "anticipate," "believe," "estimate," "plan" and "continue" or similar
words. We have based these statements on our current expectations about future
events. Although we believe that our expectations reflected in or suggested by
our forward-looking statements are reasonable, our actual results may differ
materially from what we currently expect. Important factors which could cause
our actual results to differ materially from the forward-looking statements in
this report include:

         -       material adverse changes in economic conditions in the markets
                 we serve;

         -       future regulatory actions and conditions in the states in which
                 we conduct our business;

         -       competition from others in the insurance agency and brokerage
                 business;

         -       the integration of our operations with those of businesses or
                 assets we have acquired or may acquire in the future and the
                 failure to realize the expected benefits of such integration;
                 and

         -       other risks and uncertainties as may be detailed from time to
                 time in our public announcements and Securities and Exchange
                 Commission filings.

         You should carefully read this report completely and with the
understanding that our actual future results may be materially different from
what we expect. All forward-looking statements attributable to us are expressly
qualified by these cautionary statements.

         We do not undertake my obligation to publicly update or revise any
forward-looking statements.


I
TEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risk is the potential loss arising from adverse changes in
market rates and prices, such as interest rates and equity prices. We are
exposed to market risk through our investments, revolving credit line and term
loan agreements.

         Our invested assets are held as cash and cash equivalents, restricted
cash, available-for-sale marketable equity securities, non-marketable equity
securities and certificates of deposit. These investments are subject to
interest rate risk and equity price risk. The fair values of our cash and cash
equivalents, restricted cash, and certificates of deposit at December 31, 2001
and 2000 approximated their respective carrying values due to their short-term
duration and therefore such market risk is not considered to be material.

         We do not actively invest or trade in equity securities. In addition,
we generally dispose of any significant equity securities received in
conjunction with an acquisition shortly after the acquisition date. However, we
have no current intentions to add or dispose of any of the 559,970 common stock
shares of Rock-Tenn Company, a publicly-held NYSE company, which we have owned
for over ten years. The investment in Rock-Tenn Company accounted for 85% and
48% of the total value of available-for-sale


                                      22

<PAGE>


marketable equity securities, non-marketable equity securities and certificates
of deposit as of December 31, 2001 and 2000, respectively. Rock-Tenn Company's
closing stock price at December 31, 2001 and 2000 was $14.40 and $7.44
respectively. Our exposure to equity price risk is primarily related to the
Rock-Tenn Company investment. As of December 31, 2001, the value of the 
Rock-Tenn Company investment was $8,064,000.

         To hedge the risk of increasing interest rates from January 2, 2002
through the remaining six years of our seven-year $90 million term loan, on
December 5, 2001 we entered into an interest rate swap agreement that
effectively converted the floating rate LIBOR-based interest payments to fixed
interest rate payments at 4.53%. As of December 31, 2001, the fair value of the
derivative liability was $88,000. We do not otherwise enter into derivatives,
swaps or other similar financial instruments for trading or speculative
purposes.


                                       23

<PAGE>


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
To Brown & Brown, Inc.
 
We have audited the accompanying consolidated balance sheets of Brown & Brown,
Inc. and subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Brown & Brown, Inc. and
subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.
 
/s/ ARTHUR ANDERSEN LLP
Orlando, Florida
January 18, 2002

 
                                       24

<PAGE>
 
                      BROWN & BROWN, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
 

<Table>
<Caption>
----------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA)                             2001        2000        1999
----------------------------------------------------------------------------------------------
<S>                                                           <C>         <C>         <C>
Revenues:
  Commissions and fees......................................  $359,697    $258,309    $231,437
  Investment income.........................................     3,686       4,887       3,535
  Other income..............................................     1,646       2,209       2,551
                                                              --------------------------------
          Total revenues....................................   365,029     265,405     237,523
Expenses:
  Employee compensation and benefits........................   187,653     149,836     131,270
  Other operating expenses..................................    56,815      44,372      41,893
  Amortization..............................................    15,860       9,226       8,343
  Depreciation..............................................     6,536       6,158       5,892
  Interest..................................................     5,703       1,266       1,360
  Non-cash stock grant compensation.........................     1,984         483       1,263
                                                              --------------------------------
          Total expenses....................................   274,551     211,341     190,021
                                                              --------------------------------
Income before income taxes and minority interest............    90,478      54,064      47,502
Income taxes................................................    34,834      20,146      18,331
Minority interest, net of income taxes......................     1,731       1,125         900
                                                              --------------------------------
          Net income........................................  $ 53,913    $ 32,793    $ 28,271
                                                              --------------------------------
Net income per share:
  Basic.....................................................  $   0.86    $   0.53    $   0.46
                                                              --------------------------------
  Diluted...................................................  $   0.85    $   0.53    $   0.46
                                                              --------------------------------
Weighted average number of shares outstanding:
  Basic.....................................................    62,563      61,845      61,639
                                                              --------------------------------
  Diluted...................................................    63,222      62,091      61,655
----------------------------------------------------------------------------------------------
</Table>

 
See accompanying notes to our consolidated financial statements.
 
                                       25

<PAGE>
 
                      BROWN & BROWN, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
 

<Table>
<Caption>
------------------------------------------------------------------------------------
AT DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA)                               2001        2000
------------------------------------------------------------------------------------
<S>                                                             <C>         <C>
ASSETS
Current Assets:
  Cash and cash equivalents.................................    $ 16,048    $ 37,027
  Restricted cash...........................................      50,328      32,017
  Short-term investments....................................         451       2,149
  Premiums, commissions and fees receivable.................     101,449      96,952
  Other current assets......................................       8,230       9,007
                                                                --------------------
  Total current assets......................................     176,506     177,152
Fixed assets, net...........................................      25,544      17,357
Intangibles, net............................................     268,311     113,031
Investments.................................................       8,983       6,457
Deferred income taxes, net..................................       1,519       2,873
Other assets................................................       7,874       7,807
                                                                --------------------
  Total assets..............................................    $488,737    $324,677
                                                                --------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Premiums payable to insurance companies...................    $151,649    $142,183
  Premium deposits and credits due clients..................      12,078       8,347
  Accounts payable..........................................      10,085       5,508
  Accrued expenses..........................................      31,930      27,624
  Current portion of long-term debt.........................      20,855       4,387
                                                                --------------------
  Total current liabilities.................................     226,597     188,049
Long-term debt..............................................      78,195      10,660
Other liabilities...........................................       6,308       5,937
Commitments and contingencies (Note 13)
Minority interest...........................................       2,352       1,659
Shareholders' equity:
  Common stock, par value $0.10 per share; authorized 
     140,000 shares; issued and outstanding, 63,194 at 2001
     and 62,164 at 2000.....................................       6,319       6,216
  Additional paid-in capital................................      11,181          --
  Retained earnings.........................................     153,392     109,661
  Accumulated other comprehensive income, net of tax effect
     of $2,750 at 2001 and $1,595 at 2000...................       4,393       2,495
                                                                --------------------
  Total shareholders' equity................................     175,285     118,372
                                                                --------------------
  Total liabilities and shareholders' equity................    $488,737    $324,677
------------------------------------------------------------------------------------
</Table>

 
See accompanying notes to our consolidated financial statements.
 
                                       26

<PAGE>
 
                      BROWN & BROWN, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------
                                                 COMMON STOCK                             ACCUMULATED
                                         --------------------   ADDITIONAL                      OTHER           TOTAL
(IN THOUSANDS, EXCEPT                         SHARES      PAR      PAID-IN   RETAINED   COMPREHENSIVE   SHAREHOLDERS'
PER SHARE DATA)                          OUTSTANDING    VALUE      CAPITAL   EARNINGS   INCOME (LOSS)          EQUITY
---------------------------------------------------------------------------------------------------------------------
<S>                                      <C>           <C>      <C>          <C>        <C>             <C>
Balance at January 1, 1999............        61,793   $6,179    $      --   $ 70,353      $    5,540     $    82,072
---------------------------------------------------------------------------------------------------------------------
 
Net income............................                                         28,271                          28,271
 
Net decrease in unrealized
  appreciation of available-for-sale
  securities..........................                                                           (618)           (618)
                                                                                                          -----------
 
Comprehensive income..................                                                                         27,653
 
Common stock issued for employee stock
  benefit plans.......................            99       10        2,923                                      2,933
 
Common stock purchased for employee
  stock benefit plans.................          (136)     (14)      (1,141)                                    (1,155)
 
Net distributions from pooled
  entities............................          (165)     (16)                 (5,752)                         (5,768)
 
Principal payments made on ESOP
  obligations from pooled entities....                                            857                             857
 
Cash dividends paid ($0.115 per
  share)..............................                                         (6,237)                         (6,237)
---------------------------------------------------------------------------------------------------------------------
 
Balance at December 31, 1999..........        61,591    6,159        1,782     87,492           4,922         100,355
---------------------------------------------------------------------------------------------------------------------
 
Net income............................                                         32,793                          32,793
 
Net decrease in unrealized
  appreciation of available-for-sale
  securities..........................                                                         (2,427)         (2,427)
                                                                                                          -----------
 
Comprehensive income..................                                                                         30,366
 
Common stock issued for employee stock
  benefit plans.......................           947       95        2,134                                      2,229
 
Common stock purchased for employee
  stock benefit plans.................          (365)     (37)      (3,916)    (1,583)                         (5,536)
 
Net distributions from pooled
  entities............................            (9)      (1)                 (1,869)                         (1,870)
 
Principal payments made on ESOP
  obligations from pooled entities....                                            353                             353
 
Cash dividends paid ($0.135 per
  share)..............................                                         (7,525)                         (7,525)
---------------------------------------------------------------------------------------------------------------------
 
Balance at December 31, 2000..........        62,164    6,216           --    109,661           2,495         118,372
---------------------------------------------------------------------------------------------------------------------
 
Net income............................                                         53,913                          53,913
 
Net increase in unrealized
  appreciation of available-for-sale
  securities..........................                                                          1,951           1,951
 
Net losses on cash-flow hedging
  derivatives.........................                                                            (53)            (53)
                                                                                                          -----------
 
Comprehensive income..................                                                                         55,811
 
Common stock issued for employee stock
  benefit plans.......................           786       79        4,749                                      4,828
 
Common stock issued for agency
  acquisition.........................           244       24        6,432                                      6,456
 
Net distributions from pooled
  entities............................                                           (849)                           (849)
 
Adjustment to conform fiscal year-end
  for pooled entity...................                                            385                             385
 
Cash dividends paid ($0.160 per
  share)..............................                                         (9,718)                         (9,718)
---------------------------------------------------------------------------------------------------------------------
 
Balance at December 31, 2001..........        63,194   $6,319    $  11,181   $153,392      $    4,393     $   175,285
---------------------------------------------------------------------------------------------------------------------
</Table>

 
See accompanying notes to our consolidated financial statements.
 
                                       27

<PAGE>
 
                      BROWN & BROWN, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 

<Table>
<Caption>
-------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
(IN THOUSANDS)                                                       2001        2000        1999
-------------------------------------------------------------------------------------------------
<S>                                                             <C>          <C>         <C>
Cash Flows from Operating Activities:
  Net income................................................    $  53,913    $ 32,793    $ 28,271
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Depreciation............................................        6,536       6,158       5,892
    Amortization............................................       15,860       9,226       8,343
    Non-cash stock grant compensation.......................        1,984         483       1,263
    Deferred income taxes...................................          199      (2,721)       (495)
    Net gains on sales of investments, fixed assets and
      client accounts.....................................         (870)       (712)       (422)
    Adjustment to conform fiscal year-end for pooled
      entities..............................................          385          --          --
    Restricted cash increase................................      (18,311)    (12,051)     (1,665)
    Premiums, commissions and fees receivable (increase)
      decrease..............................................       (2,611)    (18,432)      3,996
    Other assets decrease (increase)........................          838       2,343        (905)
    Premiums payable to insurance companies increase
      (decrease)............................................        6,308      17,689      (3,066)
    Premium deposits and credits due clients increase
      (decrease)............................................        3,731         576        (608)
    Accounts payable increase...............................        2,279      (1,660)      2,666
    Accrued expenses increase...............................        4,306       7,316         563
    Other liabilities decrease..............................       (7,423)       (570)     (1,107)
    Minority interest in earnings...........................        2,814       1,829       1,464
                                                                ---------------------------------
         Net cash provided by operating activities..........       69,938      42,267      44,190
                                                                ---------------------------------
Cash Flows from Investing Activities:
  Additions to fixed assets.................................      (11,017)     (5,553)     (6,180)
  Payments for businesses acquired, net of cash acquired....     (131,039)    (17,651)    (16,220)
  Proceeds from sales of fixed assets and client
    accounts................................................        1,619       1,755       2,063
  Purchases of investments..................................       (3,006)       (781)       (942)
  Proceeds from sales of investments........................        5,605       1,026       1,502
                                                                ---------------------------------
         Net cash used in investing activities..............     (137,838)    (21,204)    (19,777)
                                                                ---------------------------------
Cash Flows from Financing Activities:
  Proceeds from long-term debt..............................       90,062         493         738
  Payments on long-term debt................................      (33,297)     (4,494)    (17,945)
  Issuances of common stock for employee stock benefit
    plans...................................................        2,844       1,746       1,670
  Purchases of common stock for employee stock benefit
    plans...................................................           --      (5,536)     (1,155)
  Net distributions from pooled entities....................         (849)     (1,870)     (5,781)
  Cash dividends paid.......................................       (9,718)     (7,525)     (6,237)
  Cash distribution to minority interest shareholders.......       (2,121)     (1,597)     (1,318)
                                                                ---------------------------------
         Net cash provided by (used in) financing
           activities.......................................       46,921     (18,783)    (30,028)
                                                                ---------------------------------
Net (decrease) increase in cash and cash equivalents........      (20,979)      2,280      (5,615)
Cash and cash equivalents at beginning of year..............       37,027      34,747      40,362
                                                                ---------------------------------
Cash and cash equivalents at end of year....................    $  16,048    $ 37,027    $ 34,747
-------------------------------------------------------------------------------------------------
</Table>

 
See accompanying notes to our consolidated financial statements.
 
                                       28

<PAGE>
 

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
NATURE OF OPERATIONS
 
Brown & Brown, Inc., a Florida corporation, and its subsidiaries ("Brown &
Brown") is a diversified insurance agency and brokerage that markets and sells
to its clients insurance products and services, primarily in the property and
casualty area. Brown & Brown's business is divided into four segments: the
Retail Division, which provides a broad range of insurance products and services
to commercial, governmental, professional and individual clients; the National
Programs Division, which is comprised of two units--Professional Programs, which
provides professional liability and related package products for certain
professionals delivered through nationwide networks of independent agents, and
Special Programs, which markets targeted products and services designated for
specific industries, trade groups and market niches; the Services Division,
which provides insurance-related services, including third-party administration,
consulting for the workers' compensation and employee benefit self-insurance
markets, and managed healthcare services; and the Brokerage Division, which
markets and sells excess and surplus commercial insurance and reinsurance,
primarily through independent agents and brokers.
 
PRINCIPLES OF CONSOLIDATION
 
The accompanying consolidated financial statements include the accounts of Brown
& Brown, Inc. and its subsidiaries. All significant intercompany account
balances and transactions have been eliminated in consolidation. Outside or
third party interest in Brown & Brown's net income and net assets is reflected
as minority interest in the accompanying consolidated financial statements.
 
As more fully described in Note 2--Pooling-of-interests acquisitions, the
accompanying consolidated financial statements for all periods presented have
been restated to show the effect of the acquisitions accounted for under the
pooling-of-interests method of accounting.
 
REVENUE RECOGNITION
 
Commission income is recognized as of the effective date of the insurance policy
or the date the client is billed, whichever is later. At that date, the
earnings process has been completed and Brown & Brown can reliably estimate the
impact of policy cancellations for refunds and establish reserves accordingly.
The reserve for policy cancellations is periodically evaluated and adjusted as
necessary. Subsequent commission adjustments are recognized upon notification
from the insurance companies. Commission revenues are reported net of sub-broker
commissions. Contingent commissions from insurance companies are recognized when
determinable, which is when such commissions are received. Fee income is
recognized as services are rendered.
 
USE OF ESTIMATES
 
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, as
well as disclosures of contingent assets and liabilities, at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
 
                                       29

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
CASH AND CASH EQUIVALENTS
 
Cash and cash equivalents principally consist of demand deposits with financial
institutions and highly liquid investments having maturities of three months or
less when purchased.
 
RESTRICTED CASH, AND PREMIUMS, COMMISSIONS AND FEES RECEIVABLE
 
In its capacity as an insurance agent or broker, Brown & Brown typically
collects premiums from insureds and, after deducting its authorized commissions,
remits the premiums to the appropriate insurance companies. Accordingly, as
reported in the consolidated balance sheets, "premiums" are receivable from
insureds. Unremitted insurance premiums are held in a fiduciary capacity until
disbursed by Brown & Brown. In certain states where Brown & Brown operates, the
use and investment alternatives for these funds are regulated by various state
agencies. Brown & Brown invests these unremitted funds only in cash, money
market accounts and commercial paper, and reports such amounts as restricted
cash on the consolidated balance sheets. The interest income earned on these
unremitted funds is reported as investment income in the consolidated statements
of income.
 
In other circumstances, the insurance companies collect the premiums directly
from the insureds and remit the applicable commissions to Brown & Brown.
Accordingly, as reported in the consolidated balance sheets, "commissions" are
receivable from insurance companies. "Fees" are primarily receivable from
clients of Brown & Brown's Services Division.
 
INVESTMENTS
 
Brown & Brown's marketable equity securities have been classified as
"available-for-sale" and are reported at estimated fair value, with the
accumulated other comprehensive income (unrealized gains and losses), net of
tax, reported as a separate component of shareholders' equity. Realized gains
and losses and declines in value below cost that are judged to be
other-than-temporary on available-for-sale securities are included in investment
income. The cost of securities sold is based on the specific identification
method. Interest and dividends on securities classified as available-for-sale
are included in investment income in the consolidated statements of income.
 
As of December 31, 2001 and 2000, Brown & Brown's marketable equity securities
principally represented a long-term investment of 559,970 shares of common stock
in Rock-Tenn Company. Brown & Brown's President and Chief Executive Officer
serves on the board of directors of Rock-Tenn Company. Brown & Brown has no
current intentions to add to or to sell these shares.
 
Non-marketable equity securities and certificates of deposit having maturities
of more than three months when purchased are reported at cost and are adjusted
for other-than-temporary market value declines.
 
Accumulated other comprehensive income reported in shareholders' equity was
$4,393,000 at December 31, 2001 and $2,495,000 at December 31, 2000, net of
deferred income taxes of $2,750,000 and $1,595,000, respectively.
 
FIXED ASSETS
 
Fixed assets are stated at cost. Expenditures for improvements are capitalized,
and expenditures for maintenance and repairs are charged to operations as
incurred. Upon sale or retirement, the cost and related accumulated depreciation
and amortization are removed from the accounts and the
 
                                       30

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
resulting gain or loss, if any, is reflected in income. Depreciation has been
determined using the straight-line method over the estimated useful lives of the
related assets, which range from three to ten years. Leasehold improvements are
amortized on the straight-line method over the term of the related lease.
 
INTANGIBLES
 
Intangible assets are stated at cost less accumulated amortization and consist
of purchased client accounts, noncompete agreements, acquisition costs, and
the excess of costs over the fair value of identifiable net assets acquired
(goodwill). Purchased client accounts, noncompete agreements and acquisition
costs are being amortized on a straight-line basis over the related estimated
lives and contract periods, which range from five to 20 years. The weighted
average life of purchased client accounts, noncompete agreements and
acquisitions costs is 17.5 years, 7.9 years and 8.0 years as of December 31,
2001, and 15.4 years, 8.1 years, 8.4 years as of December 21, 2000,
respectively. Goodwill is amortized on a straight-line basis over 15 to 40 years
and has a weighted average life of 25.6 years and 32.9 years as of December 31,
2001 and 2000, respectively. Purchased client accounts are records and files
obtained from acquired businesses that contain information on insurance policies
and the related insured parties that is essential to policy renewals.
 
The carrying value of intangibles attributable to each agency division
comprising Brown & Brown is periodically reviewed by management to determine if
the facts and circumstances suggest that they may be impaired. In the insurance
agency and brokerage industry, it is common for agencies or client accounts to
be acquired at a price determined as a multiple of their corresponding revenues.
Accordingly, Brown & Brown assesses the carrying value of its intangibles by
comparison of a reasonable multiple applied to corresponding revenues, as well
as considering the undiscounted cash flows generated by the corresponding agency
division. Any impairment identified through this assessment may require that the
carrying value of related intangibles be adjusted; however, no impairments have
been recorded for the years ended December 31, 2001, 2000 and 1999.
 
DERIVATIVES
 
Brown & Brown utilizes a derivative financial instrument to reduce interest rate
risks. Brown & Brown does not hold or issue derivative financial instruments for
trading purposes. In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards (SFAS) No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which was
subsequently amended by SFAS Nos. 137 and 138. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments and
hedging activities. These standards require that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
condition and measure those instruments at fair value. Changes in the fair value
of those instruments will be reported in earnings or other comprehensive income,
depending on the use of the derivative and whether it qualifies for hedge
accounting. The accounting for gains and losses associated with changes in the
fair value of the derivative and the resulting effect on the consolidated
financial statements will depend on the derivative's hedge designation and
whether the hedge is highly effective in achieving offsetting changes in the
fair value of cash flows as compared to changes in the fair value of the
liability being hedged.
 
                                       31

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
INCOME TAXES
 
Brown & Brown files a consolidated federal income tax return. Deferred income
taxes are provided for in the consolidated financial statements and relate
principally to expenses charged to income for financial reporting purposes in
one period and deducted for income tax purposes in other periods, unrealized
appreciation of available-for-sale securities, and basis differences of
intangible assets.
 
NET INCOME PER SHARE
 
Basic net income per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for the
period. Basic net income per share excludes dilution. Diluted net income per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted to common stock.
 
The following table sets forth the computation of basic net income per common
share and diluted net income per common and common equivalent share:
 

<Table>
<Caption>
---------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA)                              2001       2000       1999
---------------------------------------------------------------------------------------------
<S>                                                             <C>        <C>        <C>
Net income..................................................    $53,913    $32,793    $28,271
                                                                -----------------------------
Weighted average number of common shares outstanding........     62,563     61,845     61,639
Dilutive effect of stock options using the treasury stock
  method....................................................        659        246         16
                                                                -----------------------------
Weighted average number of common and common equivalent
  shares outstanding........................................     63,222     62,091     61,655
                                                                -----------------------------
Basic net income per share..................................    $  0.86    $  0.53    $  0.46
                                                                -----------------------------
Diluted net income per common and common equivalent share...    $  0.85    $  0.53    $  0.46
---------------------------------------------------------------------------------------------
</Table>

 
All share and per share amounts in the consolidated financial statements have
been restated to give effect to the two-for-one common stock split effected by
Brown & Brown on November 21, 2001 and the two-for-one common stock split
effected by Brown & Brown on August 23, 2000. Each stock split was effected as a
stock dividend.
 
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The carrying amounts of Brown & Brown's financial assets and liabilities,
including cash and cash equivalents, investments, premiums, commissions and fees
receivable, premiums payable to insurance companies, premium deposits and
credits due clients and accounts payable, at December 31, 2001 and 2000,
approximate fair value because of the short maturity of these instruments. The
carrying amount of Brown & Brown's long-term debt approximates fair value at
December 31, 2001 and 2000 since the debt is at floating rates.
 
NEW ACCOUNTING PRONOUNCEMENTS
 
In June 2001, the FASB issued SFAS No. 141, "Business Combinations," which
requires all business combinations initiated after June 30, 2001 to be accounted
for using the purchase method. Brown & Brown has historically used the
pooling-of-interests method to record those acquisitions that met
 
                                       32

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
the now-superseded APB No. 16, and the purchase method of accounting for other
acquisitions. Acquisitions that met the now-superseded APB No. 16's
pooling-of-interests criteria and that were initiated prior to June 30, 2001
with executed letters of intent outlining the major terms of the acquisition
plan, including the ratio of exchange of stock, were accounted for as
pooling-of-interests transactions. All of Brown & Brown's future acquisitions
will be consummated using the purchase method.
 
Also in June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which addresses how intangible assets that are acquired individually or
as a group of other assets should be accounted for in financial statements upon
their acquisition. This statement also addresses how goodwill and other
intangible assets should be accounted for after they have been initially
recognized in the financial statements. Goodwill, which historically has been
amortized over a 20-to 40-year time period, will no longer be subject to
amortization. Instead, goodwill will be tested at least annually for impairment
by applying a fair-value-based test. Goodwill and intangible assets acquired
after June 30, 2001 were immediately subject to the provisions of SFAS No. 142;
otherwise, the provisions of this statement became effective January 1, 2002.
Exclusive of non-amortization of goodwill, Brown & Brown does not expect the
adoption of SFAS No. 142 during the first quarter of 2002 to have a material
impact on Brown & Brown's consolidated financial statements.
 
Additionally, in June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations," which addresses the financial accounting and reporting
for obligations associated with the retirement of tangible long-lived assets and
the associated retirement costs. SFAS No. 143 is effective for fiscal years
beginning after June 15, 2002. Brown & Brown does not expect the adoption of
SFAS No. 143 to have a material impact on Brown & Brown's consolidated financial
statements.
 
In August 2001, the FASB issued SFAS No. 144, "Accounting for the Disposal or
Impairment of Long-Lived Assets," which now requires that a single accounting
impairment model be used for long-lived assets to be disposed of by sale,
whether previously held and used or newly acquired, and broadens the
presentation of discontinued operations to include more disposal transactions.
SFAS No. 144 is effective for fiscal years beginning after December 15, 2001.
Brown & Brown does not expect the adoption of SFAS No. 144 to have a material
impact on Brown & Brown's consolidated financial statements.
 
RECLASSIFICATIONS
 
Certain prior year amounts have been reclassified to conform to the current year
presentation.
 
                                       33

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
2. POOLING-OF-INTERESTS ACQUISITIONS
 
In 2001, Brown & Brown acquired all of the outstanding stock of the following
insurance agency or brokerage firms. These transactions have been accounted for
under the pooling-of-interests method of accounting and, accordingly, Brown &
Brown's consolidated financial statements and related notes have been restated
for all periods prior to the dates of acquisition to include the results of
operations, financial positions and cash flows of these companies. The following
table reflects the effects of its 2001 acquisitions on the 2001, 2000 and 1999
individual and combined operating results of Brown & Brown:

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------
                                                                          2001                              2000       1999
                                      COMMON   -------------------------------   -------------------------------   --------
(IN THOUSANDS, EXCEPT                 SHARES                  NET   NET INCOME                  NET   NET INCOME
SHARE AND PER SHARE DATA)             ISSUED    REVENUE    INCOME    PER SHARE    REVENUE    INCOME    PER SHARE    REVENUE
---------------------------------------------------------------------------------------------------------------------------
<S>                                <C>         <C>        <C>       <C>          <C>        <C>       <C>          <C>
Brown & Brown, as previously
 reported for 2000 and 1999......              $307,050   $50,941     $   0.87   $209,706   $33,186     $   0.58   $188,391
 
The Huval Companies..............    654,758      7,981       458                   7,784       147                   6,374
Spencer & Associates, Inc. and
 SAN of East Central Florida,
 Inc. ...........................    191,176      1,971       191                   2,050       (67)                  1,741
The Young Agency, Inc. ..........  1,142,858     11,784       771                  11,207      (606)                  9,911
Layne & Associates, Ltd. ........    482,334      6,707       234                   6,808    (1,098)                  5,701
Agency of Insurance
 Professionals, Inc., CompVantage
 Insurance Agency, LLC, and
 Agency of Indian Programs
 Insurance, LLC..................    240,268      2,591       257                   2,168        24                   1,726
Finwall & Associates Insurance,
 Inc. ...........................    167,466      1,685       102                   1,701       215                   1,522
The Connelly Insurance Group,
 Inc. ...........................    515,176      5,984       415                   5,155       270                   4,569
The Benefit Group, Inc. .........    119,708        865       166                   1,066       426                     692
Logan Insurance Agency, Inc. and
 Automobile Insurance Agency of
 Virginia, Inc. .................     16,736        488        68                     459        54                     478
Froelich-Paulson-Moore, Inc. and
 M&J Buildings, LLC..............     62,200      1,193        83                   1,266       109                   1,276
McKinnon & Mooney, Inc...........     42,018        671        (6)                    805        19                     761
Raleigh, Schwarz & Powell,
 Inc.............................  1,130,112     16,059       233                  15,230       114                  14,381
---------------------------------              ------------------                ------------------             -----------
Brown & Brown, as combined.......              $365,029   $53,913     $   0.85   $265,405   $32,793     $   0.53   $237,523
---------------------------------------------------------------------------------------------------------------------------
 
<Caption>
---------------------------------  --------------------
                                                   1999
                                   --------------------
(IN THOUSANDS, EXCEPT                  NET   NET INCOME
SHARE AND PER SHARE DATA)           INCOME    PER SHARE
---------------------------------  --------------------
<S>                                <C>       <C>
Brown & Brown, as previously
 reported for 2000 and 1999......  $26,789     $   0.47
The Huval Companies..............      470
Spencer & Associates, Inc. and
 SAN of East Central Florida,
 Inc. ...........................      (93)
The Young Agency, Inc. ..........      289
Layne & Associates, Ltd. ........     (408)
Agency of Insurance
 Professionals, Inc. CompVantage
 Insurance Agency, LLC, and
 Agency of Indian Programs
 Insurance, LLC..................        9
Finwall & Associates Insurance,
 Inc. ...........................      129
The Connelly Insurance Group,
 Inc. ...........................      194
The Benefit Group, Inc. .........      128
Logan Insurance Agency, Inc. and
 Automobile Insurance Agency of
 Virginia, Inc. .................       58
Froelich-Paulson-Moore, Inc. and
 M&J Buildings, LLC..............      140
McKinnon & Mooney, Inc...........       67
Raleigh, Schwarz & Powell,
 Inc.............................      499
---------------------------------  -------
Brown & Brown, as combined.......  $28,271     $   0.46
-----------------------------------------------------------------------------------------------
</Table>

 
                                       34

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
In 2000, Brown & Brown acquired all of the outstanding stock of the following
insurance agency or brokerage firms. These transactions have been accounted for
under the pooling-of-interests method of accounting and, accordingly, Brown &
Brown's consolidated financial statements and related notes have been restated
for all periods prior to the dates of acquisition to include the results of
operations, financial positions and cash flows of these companies. The following
table reflects the effects of its 2000 acquisitions on the 2000, 1999 and 1998
individual and combined operating results of Brown & Brown:

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------------------
                                                                                  2000                             1999       1998
                                                        ------------------------------   ------------------------------   --------
(IN THOUSANDS,                                 COMMON                              NET                              NET
EXCEPT SHARE AND                               SHARES                  NET      INCOME                  NET      INCOME
PER SHARE DATA)                                ISSUED    REVENUE    INCOME   PER SHARE    REVENUE    INCOME   PER SHARE    REVENUE
----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>         <C>        <C>       <C>         <C>        <C>       <C>         <C>
Brown & Brown, as previously reported for
 1999 and 1998............................              $197,162   $32,088       $0.58   $176,413   $27,172       $0.50   $158,947
Bowers, Schumann & Welch..................  1,087,176      5,223       594                  5,133      (506)                 5,337
The Flagship Group, Ltd...................    379,828      3,931       246                  3,850       244                  4,316
WMH, Inc. and Huffman & Associates, Inc...    361,660      2,516       169                  2,240       154                  2,167
Mangus Insurance & Bonding, Inc...........    115,910        874        89                    755      (275)                   718
------------------------------------                    ------------------               ------------------               --------
Brown & Brown, as combined................              $209,706   $33,186       $0.58   $188,391   $26,789       $0.47   $171,485
----------------------------------------------------------------------------------------------------------------------------------
 
<Caption>
------------------------------------------  -------------------
                                                           1998
                                            -------------------
(IN THOUSANDS,                                              NET
EXCEPT SHARE AND                                NET      INCOME
PER SHARE DATA)                              INCOME   PER SHARE
------------------------------------------  -------------------
<S>                                         <C>       <C>
Brown & Brown, as previously reported for
 1999 and 1998............................  $23,349       $0.42
Bowers, Schumann & Welch..................     (252)
The Flagship Group, Ltd...................      314
WMH, Inc. and Huffman & Associates, Inc...      157
Mangus Insurance & Bonding, Inc...........       (6)
------------------------------------        -------                                                
Brown & Brown, as combined................  $23,562       $0.42
----------------------------------------------------------------------------------------------------------------------------------
</Table>

 
In 1999, Brown & Brown acquired all of the outstanding stock of the following
insurance agency or brokerage firms. These transactions have been accounted for
under the pooling-of-interests method of accounting and, accordingly, Brown &
Brown's consolidated financial statements and related notes have been restated
for all periods prior to the dates of acquisition to include the results of
operations, financial positions and cash flows of these companies. The following
table reflects the effects of its 1999 acquisitions on the 1999 and 1998
individual and combined operating results of Brown & Brown:
 

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                            1999                             1998
                                                                  ------------------------------   ------------------------------
                                                         COMMON                              NET                              NET
(IN THOUSANDS, EXCEPT                                    SHARES                  NET      INCOME                  NET      INCOME
SHARE AND PER SHARE DATA)                                ISSUED    REVENUE    INCOME   PER SHARE    REVENUE    INCOME   PER SHARE
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>       <C>        <C>       <C>         <C>        <C>       <C>
Brown & Brown, as previously reported for 1998........            $171,879   $26,737       $0.50   $153,791   $23,053       $0.43
Ampher Insurance Inc. and Ross Insurance of Florida,
 Inc..................................................  669,312      1,730        44                  2,994        86
Signature Insurance Group, Inc. and C,S&D General
 Partnership..........................................  421,540      2,804       391                  2,162       210
--------------------------------------------------                ------------------               ------------------
Brown & Brown, as combined............................            $176,413   $27,172       $0.50   $158,947   $23,349       $0.42
---------------------------------------------------------------------------------------------------------------------------------
</Table>

 
3. PURCHASE ACQUISITIONS
 
On January 1, 2001, Brown & Brown acquired the insurance-related assets of The
Riedman Corporation ("Riedman"). Riedman was a provider of a broad range of
insurance products and services in 13 states. As a result of the acquisition,
Brown & Brown acquired operations that generated $54,193,000 in commissions and
fees in 2000, and established locations in 12 new states. The aggregate purchase
price was $92,310,000, including $62,398,000 of cash, issuance of $10,546,000 in
notes payable and the assumption of $19,366,000 of liabilities, which was
primarily debt related to prior acquisitions by Riedman. The results of
Riedman's operations have been included in the consolidated financial statements
since January 1, 2001.
 
                                       35

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
On May 1, 2001, Brown & Brown acquired the insurance-related assets of Parcel
Insurance Plan, Inc. ("PIP"). PIP was a specialty insurance agency providing
insurance coverage to commercial and private shippers for small packages and
parcels with insured values of less than $25,000 each. As a result of the
acquisition, Brown & Brown expanded into a new insurance brokerage niche. The
aggregate purchase price was $23,012,000, including $22,869,000 of cash and the
assumption of $143,000 of liabilities. The results of PIP's operations have been
included in the consolidated financial statements since May 1, 2001.
 
On October 1, 2001, Brown & Brown acquired the insurance-related assets of Henry
S. Lehr, Inc. and Apollo Financial Corporation ("Lehr"). Lehr was a provider of
a broad range of insurance products and services including targeted insurance
products and services for social-services organizations. As a result of the
acquisition, Brown & Brown expanded its retail insurance presence in the
northeastern United States. The aggregate purchase price was $11,600,000,
consisting entirely of cash. The results of Lehr's operations have been included
in the consolidated financial statements since October 1, 2001.
 
In addition, Brown & Brown acquired the assets of nine general insurance
agencies, several books of business (client accounts) and the outstanding
stock of two general insurance agencies. The aggregate purchase price was
$47,174,000, including $36,056,000 of net cash payments, the issuance of notes
payable in the amount of $4,662,000 and the issuance of 244,028 shares of Brown
& Brown's common stock with an approximate fair market value as of the
respective acquisition dates of $6,456,000 based on the average stock price for
the 20 trading days ending three days prior to the respective closing dates. The
results of these operations have been included in the consolidated financial
statements since the dates of each acquisition.
 
The following table summarizes the estimated fair values of the assets acquired
at the date of each acquisition and are based on preliminary purchase price
allocations:
 

<Table>
<Caption>
----------------------------------------------------------------------------------------------
(IN THOUSANDS)                                RIEDMAN       PIP      LEHR     OTHER      TOTAL
----------------------------------------------------------------------------------------------
<S>                                          <C>        <C>       <C>       <C>       <C>
Current assets.............................  $     --   $    --   $    --   $ 4,114   $  4,114
Fixed assets...............................     2,899       546       174       633      4,252
Purchased client accounts................    43,265    10,077     5,513    23,451     82,306
Noncompete agreements......................     2,800     2,300       400     1,871      7,371
Acquisition costs..........................        81        12        --        76        169
Goodwill...................................    43,265    10,077     5,513    22,662     81,517
Other assets...............................        --        --        --        17         17
                                             -------------------------------------------------
  Total assets acquired....................    92,310    23,012    11,600    52,824    179,746
Current liabilities........................    (9,388)     (143)       --    (5,333)   (14,864)
Long-term debt ............................    (8,616)       --        --        --     (8,616)
Non-current liabilities....................    (1,362)       --        --      (317)    (1,679)
                                             -------------------------------------------------
  Total liabilities assumed................   (19,366)     (143)       --    (5,650)   (25,159)
                                             -------------------------------------------------
  Total net assets acquired................  $ 72,944   $22,869   $11,600   $47,174   $154,587
----------------------------------------------------------------------------------------------
</Table>

 
The weighted-average useful lives for the acquired intangible assets are as
follows: purchased client accounts--20 years; noncompete agreements--5 years;
and acquisition costs--5 years.
 
                                       36

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
Goodwill of $81,517,000 was assigned to the Retail and National Programs
Divisions in the amounts of $71,440,000 and $10,077,000, respectively. Of that
total amount, $75,741,000 is expected to be deductible for tax purposes.
 
The results of operations for the acquisitions completed during 2001 have been
combined with those of Brown & Brown since their respective acquisition dates.
If the acquisitions had occurred at the beginning of the year 2000, Brown &
Brown's results of operations would be as shown in the following table. These
unaudited pro forma results are not necessarily indicative of the actual results
of operations that would have occurred had the acquisitions actually been made
at the beginning of the respective periods.
 

<Table>
<Caption>
------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
(IN THOUSANDS, EXCEPT PER SHARE DATA)                               2001        2000
------------------------------------------------------------------------------------
                                                                    (UNAUDITED)
<S>                                                             <C>         <C>
Total revenues..............................................    $387,805    $358,583
Income before income taxes and minority interest............      94,479      62,724
Net income..................................................      56,374      37,449
Net income per share:
  Basic.....................................................    $   0.90    $   0.60
  Diluted...................................................    $   0.89    $   0.60
Weighted average number of shares outstanding:
  Basic.....................................................      62,767      62,089
  Diluted...................................................      63,426      62,335
------------------------------------------------------------------------------------
</Table>

 
The results of operations for the Riedman acquisition were combined with Brown &
Brown effective January 1, 2001. Riedman's unaudited revenues, income before
income taxes and minority interest and net income included in the 2000 pro forma
data summarized above approximate $54,193,000, $1,075,000 and $661,000,
respectively. The impact of Riedman on the 2000 pro forma data on diluted net
income per share approximates $0.01 per share.
 
Additional consideration paid to sellers or consideration returned to Brown &
Brown by sellers as a result of purchase price adjustment provisions are
recorded as adjustments to intangibles when the contingencies are settled. The
net payments by Brown & Brown as a result of these adjustments totaled
$2,342,000, $1,220,000 and $1,611,000 in 2001, 2000 and 1999, respectively. As
of December 31, 2001, the maximum future contingency payments related to
acquisitions totaled $10,852,000.
 
In 2000, Brown & Brown acquired the assets of five general insurance agencies,
several books of business (client accounts) and the outstanding stock of two
general insurance agencies. The aggregate purchase price was $19,669,000,
including $19,058,000 of net cash payments and the issuance of notes payable in
the amount of $611,000. Of that total amount, $12,000 was assigned to goodwill
in the National Programs Division. Each of these acquisitions was accounted for
as a purchase, and substantially the entire cost was assigned to purchased
client accounts, noncompete agreements and goodwill. The results of these
operations have been included in the consolidated financial statements since the
dates of each acquisition.
 
In 1999, Brown & Brown acquired the assets of seven general insurance agencies,
several books of business (client accounts) and the outstanding stock of three
general insurance agencies. The
 
                                       37

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
aggregate purchase price was $21,011,000, including $18,533,000 of net cash
payments and the issuance of notes payable in the amount of $2,478,000. Of that
total amount, $4,949,000 was assigned to goodwill in the Retail Division. Each
of these acquisitions was accounted for as a purchase, and substantially the
entire cost was assigned to purchased client accounts, noncompete agreements
and goodwill. The results of these operations have been included in the
consolidated financial statements since the dates of each acquisition.
 
4. INVESTMENTS
 
Investments at December 31 consisted of the following:
 

<Table>
<Caption>
--------------------------------------------------------------------------------------------------
                                                                          2001                2000
                                                                CARRYING VALUE      CARRYING VALUE
                                                             -----------------   -----------------
                                                                          NON-                NON-
(IN THOUSANDS)                                               CURRENT   CURRENT   CURRENT   CURRENT
--------------------------------------------------------------------------------------------------
<S>                                                          <C>       <C>       <C>       <C>
Available-for-sale marketable equity securities............   $ 96     $8,064    $1,701    $4,165
Non-marketable equity securities and certificates of
  deposit..................................................    355        919       448     2,292
                                                             -------------------------------------
Total investments..........................................   $451     $8,983    $2,149    $6,457
--------------------------------------------------------------------------------------------------
</Table>

 
The following table summarizes available-for-sale securities at December 31:
 

<Table>
<Caption>
--------------------------------------------------------------------------------------------------
                                                                    GROSS        GROSS   ESTIMATED
                                                               UNREALIZED   UNREALIZED        FAIR
(IN THOUSANDS)                                          COST        GAINS       LOSSES       VALUE
--------------------------------------------------------------------------------------------------
<S>                                                   <C>      <C>          <C>          <C>
MARKETABLE EQUITY SECURITIES:
2001................................................  $  534     $7,637        $(11)        $8,160
2000................................................   2,141      3,738         (13)         5,866
--------------------------------------------------------------------------------------------------
</Table>

 
The following table summarizes the proceeds and realized gains/(losses) on
investments for the year ended December 31:
 

<Table>
<Caption>
--------------------------------------------------------------------------------------------
                                                                            GROSS      GROSS
                                                                         REALIZED   REALIZED
(IN THOUSANDS)                                                PROCEEDS      GAINS     LOSSES
--------------------------------------------------------------------------------------------
<S>                                                           <C>        <C>        <C>
2001
Available-for-sale marketable equity securities.............  $  1,607   $     --   $     --
Non-marketable equity securities and certificates of
  deposit...................................................     3,998        289         --
                                                              ------------------------------
  Total.....................................................  $  5,605   $    289   $     --
                                                              ------------------------------
2000
Available-for-sale marketable equity securities.............  $    474   $    144   $    (15)
Non-marketable equity securities and certificates of
  deposit...................................................       552         70        (19)
                                                              ------------------------------
  Total.....................................................  $  1,026   $    214   $    (34)
                                                              ------------------------------
1999
Available-for-sale marketable equity securities.............  $     88   $     14   $    (25)
Non-marketable equity securities and certificates of
  deposit...................................................     1,413        140        (42)
                                                              ------------------------------
  Total.....................................................  $  1,501   $    154   $    (67)
--------------------------------------------------------------------------------------------
</Table>

 
                                       38

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
5. FIXED ASSETS
 
Fixed assets at December 31 consisted of the following:
 

<Table>
<Caption>
------------------------------------------------------------------------------------
(IN THOUSANDS)                                                      2001        2000
------------------------------------------------------------------------------------
<S>                                                             <C>         <C>
Furniture, fixtures and equipment...........................    $ 56,759    $ 48,043
Land, buildings and improvements............................       3,324       2,680
Leasehold improvements......................................       3,662       2,538
                                                                --------------------
                                                                  63,745      53,261
Less accumulated depreciation and amortization..............     (38,201)    (35,904)
                                                                --------------------
                                                                $ 25,544    $ 17,357
------------------------------------------------------------------------------------
</Table>

 
Depreciation expense amounted to $6,536,000 in 2001, $6,158,000 in 2000 and
$5,892,000 in 1999.
 
                                       39

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
6. INTANGIBLES
 
Intangibles at December 31 consisted of the following:
 

<Table>
<Caption>
------------------------------------------------------------------------------------
(IN THOUSANDS)                                                      2001        2000
------------------------------------------------------------------------------------
<S>                                                             <C>         <C>
Purchased client accounts.................................      $191,272    $108,964
Goodwill....................................................     123,814      42,298
Noncompete agreements.......................................      29,970      22,839
Acquisition costs...........................................       2,140       1,913
                                                                --------------------
                                                                 347,196     176,014
Less accumulated amortization...............................     (78,885)    (62,983)
                                                                --------------------
                                                                $268,311    $113,031
------------------------------------------------------------------------------------
</Table>

 
Amortization expense amounted to $15,860,000 in 2001, $9,226,000 in 2000, and
$8,343,000 in 1999.
 
Amortization of $4,203,000 was expensed in 2001 relating to goodwill. The
consolidated income statements in 2002 will have no goodwill amortization
expense in accordance with SFAS No. 142.
 
The FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets," in June
2001. SFAS No. 142 disallows amortization of goodwill for any acquisition
completed subsequent to June 30, 2001. Brown & Brown completed ten acquisitions
under the purchase method of accounting after June 30, 2001 and as the result of
the application of SFAS No. 142, $274,000 of goodwill that would have been
amortized in 2001 under the pre-SFAS No. 142 rule was not amortized.
 
7. ACCRUED EXPENSES
 
Accrued expenses at December 31 consisted of the following:
 

<Table>
<Caption>
----------------------------------------------------------------------------------
(IN THOUSANDS)                                                     2001       2000
----------------------------------------------------------------------------------
<S>                                                             <C>        <C>
Accrued bonuses.............................................    $13,230    $ 8,476
Accrued compensation and benefits...........................      8,818     11,880
Other.......................................................      9,882      7,268
                                                                ------------------
Total.......................................................    $31,930    $27,624
----------------------------------------------------------------------------------
</Table>

 
                                       40

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
8. LONG-TERM DEBT
 
Long-term debt at December 31 consisted of the following:
 

<Table>
<Caption>
-----------------------------------------------------------------------------------
(IN THOUSANDS)                                                      2001       2000
-----------------------------------------------------------------------------------
<S>                                                             <C>         <C>
Term loan agreements........................................    $ 79,143    $ 3,000
Revolving credit facility...................................          --         --
Notes payable from purchases of common stock................          --        138
Acquisition notes payable...................................      18,493      4,624
Other notes payable.........................................       1,414      7,285
                                                                -------------------
                                                                  99,050     15,047
Less current portion........................................     (20,855)    (4,387)
                                                                -------------------
Long-term debt..............................................    $ 78,195    $10,660
-----------------------------------------------------------------------------------
</Table>

 
In January 2001, Brown & Brown entered into a $90 million unsecured seven-year
term loan agreement with a national banking institution, bearing an interest
rate based upon the 30-, 60- or 90-day London Interbank Offered Rate (LIBOR)
plus 0.50% to 1.00%, depending upon Brown & Brown's quarterly ratio of funded
debt to earnings before interest, taxes, depreciation and amortization. The
90-day LIBOR was 1.88% as of December 31, 2001. The loan was fully funded on
January 3, 2001 and as of December 31, 2001 had an outstanding balance of $77.1
million. This loan is to be repaid in equal quarterly installments of $3.2
million through December 2007.
 
In 1991, Brown & Brown entered into a long-term unsecured credit agreement with
a major insurance company that provided for borrowings at an interest rate equal
to the prime rate (4.75% and 9.50% at December 31, 2001 and 2000, respectively)
plus 1.00%. At December 31, 2001, the maximum amount of $2.0 million currently
available for borrowings was outstanding. In accordance with an August 1, 1998
amendment to the credit agreement, the outstanding balance will be repaid in
annual installments of $1.0 million each August through 2003.
 
Brown & Brown also has a revolving credit facility with a national banking
institution that provides for available borrowings of up to $50 million, with a
maturity date of October 2002, bearing an interest rate based upon the 30-, 60-
or 90-day LIBOR plus 0.45% to 1.00%, depending upon Brown & Brown's quarterly
ratio of funded debt to earnings before interest, taxes, depreciation and
amortization. A commitment fee of 0.15% to 0.25% per annum is assessed on the
unused balance. The 90-day LIBOR was 1.88% as of December 31, 2001. There were
no borrowings against this facility at December 31, 2001 or December 31, 2000.
 
All three of our credit agreements require Brown & Brown to maintain certain
financial ratios and comply with certain other covenants. Brown & Brown was in
compliance with all such covenants as of December 31, 2001.
 
Acquisition notes payable represent debt incurred to former owners of certain
agencies acquired by Brown & Brown. These notes, including future contingent
payments, are payable in monthly and annual installments through February 2014,
including interest in the range from 5.0% to 9.0%.
 
Interest paid in 2001, 2000 and 1999 was $5,324,000, $1,364,000 and $1,301,000,
respectively.
 
                                       41

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
At December 31, 2001, maturities of long-term debt were $20,855,000 in 2002,
$18,198,000 in 2003, $13,518,000 in 2004, $12,060,000 in 2005, $11,464,000 in
2006 and $22,955,000 in 2007 and beyond.
 
To hedge the risk of increasing interest rates from January 2, 2002 through the
remaining six years of its seven-year $90 million term loan, Brown & Brown
entered into an interest rate swap agreement that effectively converted the
floating rate LIBOR-based interest payments to fixed interest rate payments at
4.53%. This agreement did not impact or change the required 0.5% to 1.00% credit
risk spread portion of the term loan. In accordance with SFAS No. 133, as
amended, Brown & Brown recorded a liability as of December 31, 2001 for the fair
value of the interest rate swap at December 31, 2001 for approximately $53,000,
net of taxes of approximately $33,000. Brown & Brown has designated and assessed
the derivative as a highly effective cash flow hedge, and accordingly, the
effect is reflected in other comprehensive income in the accompanying
Consolidated statements of shareholders' equity.
 
9. INCOME TAXES
 
At December 31, 2001, Brown & Brown had a net operating loss carryforward of
$1,900,000 for income tax reporting purposes, portions of which expire in the
years 2011 through 2021. This carryforward was derived from agencies acquired by
Brown & Brown in 2001 and 1998. For financial reporting purposes, a valuation
allowance of $38,000 has been recognized to offset the deferred tax asset
related to this carryforward.
 
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the corresponding amounts used for income tax reporting purposes.
Significant components of Brown & Brown's deferred tax liabilities and assets as
of December 31 are as follows:
 

<Table>
<Caption>
----------------------------------------------------------------------------------
(IN THOUSANDS)                                                     2001       2000
----------------------------------------------------------------------------------
<S>                                                             <C>        <C>
Deferred tax liabilities:
  Fixed assets..............................................    $    --    $   738
  Net unrealized appreciation of available-for-sale
     securities.............................................      2,750      1,595
  Prepaid insurance and pension.............................        616        542
  Intangible assets.........................................      1,186        460
                                                                ------------------
Total deferred tax liabilities..............................    $ 4,552    $ 3,335
Deferred tax assets:
  Fixed assets..............................................    $    57    $    --
  Deferred compensation.....................................      2,987      3,440
  Accruals and reserves.....................................      2,044      1,394
  Net operating loss carryforwards..........................        731      1,085
  Other.....................................................        290        327
  Valuation allowance for deferred tax assets...............        (38)       (38)
                                                                ------------------
Total deferred tax assets...................................    $ 6,071    $ 6,208
                                                                ------------------
Net deferred tax (asset)/liability..........................    $(1,519)   $(2,873)
----------------------------------------------------------------------------------
</Table>

 
                                       42

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
Significant components of the provision (benefit) for income taxes for the year
ended December 31 are as follows:
 

<Table>
<Caption>
---------------------------------------------------------------------------------------------
(IN THOUSANDS)                                                     2001       2000       1999
---------------------------------------------------------------------------------------------
<S>                                                             <C>        <C>        <C>
Current:
  Federal...................................................    $30,731    $19,642    $16,171
  State.....................................................      4,302      3,225      2,655
                                                                -----------------------------
Total current provision.....................................    $35,033    $22,867    $18,826
                                                                -----------------------------
Deferred:
  Federal...................................................    $  (179)   $(2,337)   $  (425)
  State.....................................................        (20)      (384)       (70)
                                                                -----------------------------
Total deferred (benefit) provision..........................    $  (199)   $(2,721)   $  (495)
                                                                -----------------------------
Total tax provision.........................................    $34,834    $20,146    $18,331
---------------------------------------------------------------------------------------------
</Table>

 
A reconciliation of the differences between the effective tax rate and the
federal statutory tax rate for the year ended December 31 is as follows:
 

<Table>
<Caption>
---------------------------------------------------------------------------------------
                                                                 2001     2000     1999
---------------------------------------------------------------------------------------
<S>                                                             <C>      <C>      <C>
Federal statutory tax rate..................................    35.0%    35.0%    35.0%
State income taxes, net of federal income tax benefit.......     3.0      3.3      3.7
Interest exempt from taxation and dividend exclusion........    (0.3)    (0.4)    (0.3)
Non-deductible goodwill amortization........................     0.4      0.4      0.5
Other, net..................................................     0.4     (1.0)    (0.3)
                                                                -----------------------
Effective tax rate..........................................    38.5%    37.3%    38.6%
---------------------------------------------------------------------------------------
</Table>

 
Income taxes paid in 2001, 2000 and 1999 were $33,840,000, $18,740,000, and
$16,132,000, respectively.
 
10. EMPLOYEE SAVINGS PLAN
 
Brown & Brown has an Employee Savings Plan (401(k)) under which substantially
all employees with more than 30 days of service are eligible to participate.
Under this plan, Brown & Brown makes matching contributions, subject to a
maximum of 2.5% of each participant's salary. Further, Brown & Brown provides
for a discretionary profit sharing contribution for all eligible employees.
Brown & Brown's contributions to the plan totaled $4,357,000 in 2001, $3,663,000
in 2000 and $3,126,000 in 1999.
 
11. STOCK-BASED COMPENSATION AND INCENTIVE PLANS
 
STOCK PERFORMANCE PLAN
 
Brown & Brown has adopted a stock performance plan, under which up to 3,600,000
shares of Brown & Brown's stock ("Performance Stock") may be granted to key
employees contingent on the employees' future years of service with Brown &
Brown and other criteria established by the Compensation Committee of Brown &
Brown's Board of Directors. Shares must be vested before participants take full
title to Performance Stock. Of the grants currently outstanding, specified
 
                                       43

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
portions will satisfy the first condition for vesting based on increases in the
market value of Brown & Brown's common stock from the initial price specified by
Brown & Brown. Dividends are paid on unvested shares of Performance Stock that
have satisfied the first vesting condition, and participants may exercise voting
privileges on such shares which are considered to be "awarded shares." Awarded
shares are included as issued and outstanding common stock shares and are
included in the calculation of basic and diluted earnings per share. Awarded
shares satisfy the second condition for vesting on the earlier of (i) 15 years
of continuous employment with Brown & Brown from the date shares are granted to
the participants; (ii) attainment of age 64; or (iii) death or disability of the
participant. At December 31, 2001, 2,893,488 shares had been granted under the
plan at initial stock prices ranging from $3.79 to $24.00. As of December 31,
2001, 2,545,702 shares had met the first condition for vesting and had been
awarded; and 59,988 shares had satisfied both conditions for vesting and had
been distributed to participants.
 
The compensation element for Performance Stock is equal to the fair market value
of the shares at the date the first vesting condition is satisfied and is
expensed over the remainder of the vesting period. Compensation expense related
to this Plan totaled $1,984,000 in 2001, $483,000 in 2000 and $1,263,000 in
1999.
 
EMPLOYEE STOCK PURCHASE PLAN
 
Brown & Brown has adopted an employee stock purchase plan ("the Stock Purchase
Plan"), which allows for substantially all employees to subscribe to purchase
shares of Brown & Brown's stock at 85% of the lesser of the market value of such
shares at the beginning or end of each annual subscription period. Of the
3,000,000 shares authorized for issuance under the Stock Purchase Plan as of
December 31, 2001, 847,566 shares remained available and reserved for future
issuance.
 
INCENTIVE STOCK OPTION PLAN
 
On April 21, 2000, Brown & Brown adopted a qualified incentive stock option plan
(the "Incentive Stock Option Plan") that provides for the granting of stock
options to certain key employees. The objective of this plan is to provide
additional performance incentives to grow Brown & Brown's pre-tax earnings in
excess of 15% annually. Brown & Brown is authorized to grant options for up to
2,400,000 common shares, of which 1,152,000 were granted on April 21, 2000 at
the most recent trading day's closing market price of $9.67 per share. All of
the outstanding options vest over a one-to-ten-year period, with a potential
acceleration of the vesting period to three to six years based on achievement of
certain performance goals. All of the options expire ten years after the grant
date. As of December 31, 2001, 72,380 option shares were exercisable. During
2001, no additional option shares were granted or exercised, and 20,000 shares
were canceled.
 
The weighted average fair value of the incentive stock options granted during
2000 estimated on the date of grant using the Black-Scholes option-pricing
model, was $4.73 per share. The fair value of these options granted is estimated
on the date of grant using the following assumptions: dividend yield of 0.86%;
expected volatility of 29.6%; risk-free interest rate of 6.3%; and an expected
life of ten years.
 
                                       44

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
PRO FORMA EFFECT OF PLANS
 
Brown & Brown accounts for the Stock Purchase Plan and the Incentive
Stock Option Plan using the intrinsic value method prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees,"
under which no compensation cost is required. Had compensation expense for these
plans been determined consistent with SFAS No. 123, "Accounting for Stock-Based
Compensation," Brown & Brown's net income and net income per share for the year
ended December 31 would have been reduced to the pro forma amounts indicated
below:
 

<Table>
<Caption>
---------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)                  2001       2000       1999
---------------------------------------------------------------------------------------------
<S>                                                             <C>        <C>        <C>
NET INCOME:
  As reported...............................................    $53,913    $32,793    $28,271
  Pro forma.................................................     51,382     31,795     28,090
NET INCOME PER SHARE:
  As reported...............................................    $  0.85    $  0.53    $  0.46
  Pro forma.................................................    $  0.81    $  0.51    $  0.46
---------------------------------------------------------------------------------------------
</Table>

 
12. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
Brown & Brown's significant non-cash investing and financing activities for the
year ended December 31 are as follows:
 

<Table>
<Caption>
-------------------------------------------------------------------------------------------
(IN THOUSANDS)                                                     2001       2000     1999
-------------------------------------------------------------------------------------------
<S>                                                             <C>        <C>        <C>
Unrealized holding gain (loss) on available-for-sale
  securities, net of tax effect of $1,188 for 2001; net of
  tax benefit of $1,552 for 2000, and $395 for 1999.........    $ 1,951    $(2,427)   $(618)
Net losses on cash flow-hedging derivatives, net of tax
  benefit of $33 for 2001...................................        (53)        --       --
Notes payable issued or assumed for purchased client
  accounts..................................................     34,767        611    2,478
Notes received on the sale of fixed assets and client
  accounts..................................................        192        467    1,305
Common stock issued for acquisitions accounted for under the
  purchase method of accounting.............................      6,456         --       --
-------------------------------------------------------------------------------------------
</Table>

 
13. COMMITMENTS AND CONTINGENCIES
 
Brown & Brown leases facilities and certain items of office equipment under
noncancelable operating lease arrangements expiring on various dates through
2015. The facility leases generally contain renewal options and escalation
clauses based on increases in the lessors' operating expenses and other charges.
Brown & Brown anticipates that most of these leases will be renewed
 
                                       45

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
or replaced upon expiration. At December 31, 2001, the aggregate future minimum
lease payments under all noncancelable lease agreements in excess of one year
were as follows:
 

<Table>
<Caption>
----------------------------------------------------------------------
(IN THOUSANDS)
----------------------------------------------------------------------
<S>                                                            <C>
2002........................................................   $14,253
2003........................................................    11,851
2004........................................................     8,996
2005........................................................     6,062
2006........................................................     3,705
Thereafter..................................................     6,000
                                                               -------
Total minimum future lease payments.........................   $50,867
----------------------------------------------------------------------
</Table>

 
Rental expense in 2001, 2000 and 1999 for operating leases totaled $14,608,000,
$11,109,000 and $8,965,000, respectively.
 
Brown & Brown is not a party to any legal proceedings other than various claims
and lawsuits arising in the normal course of business. Management of Brown &
Brown does not believe that any such claims or lawsuits will have a material
effect on Brown & Brown's financial condition or results of operations.
 
14. BUSINESS CONCENTRATIONS
 
Substantially all of Brown & Brown's premiums receivable from clients and
premiums payable to insurance companies arise from policies sold on behalf of
insurance companies. Brown & Brown, as agent and broker, typically collects
premiums, retains its commission and remits the balance to the insurance
companies. A significant portion of business written by Brown & Brown is for
clients located in Arizona, Florida and New York. Accordingly, the occurrence of
adverse economic conditions or an adverse regulatory climate in Arizona, Florida
and/or New York could have a material adverse effect on Brown & Brown's
business, although no such conditions have been encountered in the past.
 
For the years ended December 31, 2001, 2000 and 1999, approximately 5.2%, 6.5%
and 11.2%, respectively, of Brown & Brown's total revenues were derived from
insurance policies underwritten by one insurance company. Should this carrier
seek to terminate its arrangement with Brown & Brown, Brown & Brown believes
other insurance companies are available to underwrite the business, although
some additional expense and loss of market share could possibly result. No other
insurance company accounts for 5% or more of Brown & Brown's total revenues.
 
15. SEGMENT INFORMATION
 
Brown & Brown's business is divided into four segments: the Retail Division,
which provides a broad range of insurance products and services to commercial,
professional and individual clients; the National Programs Division, which is
comprised of two units--Professional Programs, which provides professional
liability and related package products for certain professionals delivered
through nationwide networks of independent agents, and Special Programs, which
markets targeted products and services designated for specific industries, trade
groups and market niches; the Services Division, which provides
insurance-related services, including third-party administration, consulting for
the workers' compensation and employee benefit self-insurance markets, and
 
                                      46

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
managed healthcare services; and the Brokerage Division, which markets and sells
excess and surplus commercial insurance and reinsurance, primarily through
independent agents and brokers. Brown & Brown conducts all of its operations
within the United States of America.
 
The accounting policies of the reportable segments are the same as those
described in Note 1 of Notes to Consolidated Financial Statements. Brown & Brown
evaluates the performance of its segments based upon revenues and income before
income taxes and minority interest. Intersegment revenues are not significant.
 
In 2001, Brown & Brown reclassified two profit centers into the National
Programs Division that were previously reported in the Brokerage Division. Total
revenues for these profit centers in 2000 and 1999 were $15,185,000 and
$8,822,000 respectively. Segment information for 2000 and 1999 has been
reclassified to conform to the current year presentation.
 
Summarized financial information concerning Brown & Brown's reportable segments
is shown in the following table. The "Other" column includes corporate-related
items and any income and expenses not allocated to reportable segments.
 

<Table>
<Caption>
------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2001           NATIONAL
(IN THOUSANDS)               RETAIL    PROGRAMS    SERVICES    BROKERAGE       OTHER       TOTAL
------------------------------------------------------------------------------------------------
<S>                        <C>         <C>         <C>         <C>          <C>         <C>
Total revenues.........    $287,555    $ 43,790    $24,968     $ 12,228     $ (3,512)   $365,029
Investment income......       4,383       1,718        365          113       (2,893)      3,686
Interest expense.......      13,345       1,108        277           --       (9,027)      5,703
Depreciation...........       4,627         879        508          178          344       6,536
Amortization...........      13,366       2,334         24           54           82      15,860
Income before income
  taxes and minority
  interest.............      52,013      17,864      3,969        4,087       12,545      90,478
Total assets...........     417,799     116,257      8,088       25,266      (78,673)    488,737
Capital expenditures...       6,104         299        376          437        3,801      11,017
------------------------------------------------------------------------------------------------
</Table>

 

<Table>
<Caption>
------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2000           NATIONAL
(IN THOUSANDS)               RETAIL    PROGRAMS    SERVICES    BROKERAGE       OTHER       TOTAL
------------------------------------------------------------------------------------------------
<S>                        <C>         <C>         <C>         <C>          <C>         <C>
Total revenues.........    $199,527    $ 36,838    $21,643     $  7,985     $   (588)   $265,405
Investment income......       3,349       2,135        278          118         (993)      4,887
Interest expense.......       2,590          51         28           --       (1,403)      1,266
Depreciation...........       4,141       1,134        518          150          215       6,158
Amortization...........       7,729       1,406          4           55           32       9,226
Income before income
  taxes and minority
  interest.............      30,114      14,937      3,070        2,697        3,246      54,064
Total assets...........     236,787      96,477      6,277       15,087      (29,951)    324,677
Capital expenditures...       3,682         489        867          266          249       5,553
------------------------------------------------------------------------------------------------
</Table>

 
                                      47

<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 

<Table>
<Caption>
------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999           NATIONAL
(IN THOUSANDS)               RETAIL    PROGRAMS    SERVICES    BROKERAGE       OTHER       TOTAL
------------------------------------------------------------------------------------------------
<S>                        <C>         <C>         <C>         <C>          <C>         <C>
Total revenues.........    $182,480    $ 32,644    $17,094     $  6,409     $ (1,104)   $237,523
Investment income......       2,828       1,452        224           90       (1,059)      3,535
Interest expense.......       1,778          --         34           --         (452)      1,360
Depreciation...........       3,899       1,237        425          116          215       5,892
Amortization...........       7,172       1,067         --           64           40       8,343
Income before income
  taxes and minority
  interest.............      28,199      12,372      2,584        2,118        2,229      47,502
Total assets...........     202,167      80,228      6,484        9,042      (11,505)    286,416
Capital expenditures...       4,043         544        346          153        1,094       6,180
------------------------------------------------------------------------------------------------
</Table>

 

I
TEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         Not Applicable.


                                      48

<PAGE>


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Set forth below is certain information concerning our executive
officers and directors. All directors and officers hold office for one-year
terms or until their successors are elected and qualified.
 

<Table>
<Caption>
--------------------------------------------------------------------------------------------------------
                                                                                       YEAR FIRST BECAME
NAME                             POSITIONS                                    AGE             A DIRECTOR
--------------------------------------------------------------------------------------------------------
<S>                              <C>                                          <C>      <C>
J. Hyatt Brown                   Chairman of the Board, President and         64             1993
                                 Chief Executive Officer
Jim W. Henderson                 Executive Vice President, Assistant          55             1993
                                 Treasurer and Director
Samuel P. Bell, III              Director                                     62             1993
Bradley Currey, Jr.              Director                                     71             1995
Theodore J. Hoepner              Director                                     60             1994
David H. Hughes                  Director                                     58             1997
Toni Jennings                    Director                                     52             1999
John R. Riedman                  Director                                     73             2001
Jan E. Smith                     Director                                     62             1997
C. Roy Bridges                   Regional Executive Vice President            52               --
Linda S. Downs                   Regional Executive Vice President            51               --
Kenneth D. Kirk                  Regional Executive Vice President            41               --
J. Scott Penny                   Regional Executive Vice President            35               --
Thomas E. Riley                  Regional Executive Vice President            46               --
Cory T. Walker                   Vice President, Chief Financial Officer      44               --
                                 and Treasurer
Laurel L. Grammig                Vice President, Secretary and General        43               --
                                 Counsel
Thomas M. Donegan, Jr.           Vice President, Assistant Secretary and      31               --
                                 Assistant General Counsel
M. Catherine Wellman             Vice President, Assistant Secretary and      28               --
                                 Assistant General Counsel
--------------------------------------------------------------------------------------------------------
</Table>

 
         J. Hyatt Brown. Mr. Brown has been our President and Chief Executive
Officer since 1993, and the Chairman of the Board of Directors since 1994. Mr.
Brown was President and Chief Executive Officer of our predecessor corporation
from 1961 to 1993. He was a member of the Florida House of Representatives from
1972 to 1980, and Speaker of the House from 1978 to 1980. Mr. Brown serves on
the Board of Directors of SunTrust Banks, Inc., SunTrust Bank/East Central
Florida, International Speedway Corporation, The FPL Group, Inc., BellSouth
Corporation, Rock-Tenn Company, and SCPIE Holdings Inc., each a publicly held
company. He also serves on the Board of Trustees of Stetson University, of which
he is a past Chairman, and serves as a member of the YMCA Advisory Board, the
March of Dimes Board of Directors, and the Salvation Army Advisory Council. He
is also the treasurer of the Council of Insurance Agents and Brokers.
 
         Jim W. Henderson. Mr. Henderson served as our Senior Vice President
from 1993 to 1995, and was elected Executive Vice President in 1995. He served
as Senior Vice President of our predecessor corporation from 1989 to 1993, and
as Chief Financial Officer from 1985 to 1989.
 
         Samuel P. Bell, III. Mr. Bell has been a shareholder of the law firm of
Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. since January 1, 1998 and also
serves as Of Counsel to the law firm of Cobb Cole & Bell. Prior to that, he was
a shareholder and managing partner of Cobb Cole & Bell. He has served as counsel
to us and our predecessor corporation since 1964. Mr. Bell was a member of the
Florida House of Representatives from 1974 to 1988.
 

                                      49

<PAGE>

         Bradley Currey, Jr. Mr. Currey served as Chief Executive Officer of
Rock-Tenn Company, a manufacturer of packaging and recycled paperboard products,
from 1989 to 1999 and as Chairman of the Board of Rock-Tenn Company from 1993 to
January 31, 2000, when he retired. He also previously served as President
(1978-1995) and Chief Operating Officer (1978-1989) of Rock-Tenn Company. Mr.
Currey is a member of the Board of Directors and the Executive Committee of
Rock-Tenn Company; the Board of Directors, the Executive Committee and the
Compensation Committee of Genuine Parts Company; and the Board of Directors of
Enzymatic Deinking Technologies, Inc. Mr. Currey is Trustee Emeritus and a past
Chairman of the Board of Trustees of Emory University. He is also a past
Chairman of the Federal Reserve Bank of Atlanta.

         Theodore J. Hoepner. Mr. Hoepner has been Vice Chairman of SunTrust
Banks, Inc. since 2000. From 1995 to 2000, Mr. Hoepner served as Chairman of the
Board, President and Chief Executive Officer of SunTrust Banks, Inc. f/k/a
SunTrust Banks of Florida, Inc. From 1990 through 1995, he served as Chairman of
the Board, President and Chief Executive Officer of SunBank, N.A. From 1983
through 1990, he was the Chairman of the Board and Chief Executive Officer of
SunBank/Miami, N.A.

         David H. Hughes. Mr. Hughes has been Chief Executive Officer of Hughes
Supply, Inc., a publicly held business-to-business distributor of construction
and industrial supplies, since 1974, and has been Chairman of the Board since
1986. Mr. Hughes is a member of the Board of Directors of SunTrust Banks, Inc.
and Darden Restaurants, Inc., a publicly held company.

         Toni Jennings. Ms. Jennings has been President of Jack Jennings & Sons,
Inc., a commercial construction firm based in Orlando, Florida, since 1982. Ms.
Jennings also serves as Secretary and Treasurer of Jennings & Jennings, Inc., an
architectural millwork firm based in Orlando, Florida. Ms. Jennings was a member
of the Florida Senate from 1980 to 2000, and President of the Florida Senate
from 1996 to 2000. She previously served in the Florida House of Representatives
from 1976 to 1980. She currently serves on the Salvation Army Advisory Board;
the Rollins College Board of Trustees and the Board of Directors of SunTrust
Bank/Central Florida, Hughes Supply, Inc. and the Florida Chamber of Commerce.

         John R. Riedman. Mr. Riedman was elected to our Board of Directors in
January 2001. He has served as Chairman of Riedman Corporation, based in
Rochester, New York, since 1992. In January 2001, we acquired the insurance
agency operations of Riedman Corporation, at which time Mr. Riedman joined us as
an Executive Vice President and was elected as Vice Chairman of Brown & Brown of
New York, Inc., one of our subsidiaries. Mr. Riedman is a Trustee and Finance
Committee member of ViaHealth, a Rochester-based healthcare services network; an
honorary Trustee of WXXI Public Broadcasting Corporation; and a member of the
Executive Committee of the Greater Rochester Chamber of Commerce. He serves as
President of 657 East Avenue Corp. (a subsidiary of Rochester Museum and Science
Center) and of the Monroe County Sheriff's Foundation, and as Chairman of the
Greater Rochester Sports Authority. He serves on the Board of Directors of High
Falls Brewing Company, Sage, Rutty & Company, Inc., a Rochester-based financial
services firm; the New York State Thruway Authority; and the New York State
Canal Corporation. Mr. Riedman also served as a director and Chairman of the
Audit Committee of Fleet Financial Group, a publicly-held company, from 1988 to
1999.
 
         Jan E. Smith. Mr. Smith has served as President of Jan Smith & Company,
a commercial real estate and business investment firm, since 1978. Mr. Smith is
also the managing general partner of Ramblers Rest Resort, Ltd., a recreational
vehicle park in Venice, Florida, and President of Travel Associates, Inc. Mr.
Smith serves on the Board of Directors of SunTrust Bank/Gulf Coast, and is a
member of the University of South Florida Foundation Board of Trustees. He also
serves as a member of the Florida Education Governance Reorganization Transition
Task Force and as a

                                      50

<PAGE>


member of the Tampa Bay Business Hall of Fame. He is a past member of the
Advisory Council of the Federal Reserve Bank of Atlanta.
 
         C. Roy Bridges. Mr. Bridges was elected as one of our Regional
Executive Vice Presidents in January 2002. Since 1998, Mr. Bridges has overseen
our profit center operations in northern and Western Florida, as well as in
Louisiana and Oklahoma. Prior to undertaking his current duties, Mr. Bridges
served as profit center manager of our Ft. Myers, Florida retail office from
1993 to 1998. Mr. Bridges also served as profit center manager of our Tampa,
Florida retail office from 1998 to 2001 and was previously a profit center
manager of our Brooksville, Florida retail office.
 
         Linda S. Downs. Ms. Downs was elected as one of our Regional Executive
Vice Presidents in January 2002. Since 1998, Ms. Downs has overseen various
profit center operations for us, including operations in Tennessee, Virginia,
and Orlando, Florida, as well as our professional and commercial insurance
programs. Prior to undertaking her current duties, Ms. Downs served as profit
center manager of our Orlando, Florida retail office from 1980 to 1998.
 
         Kenneth D. Kirk. Mr. Kirk was elected as one of our Regional Executive
Vice Presidents in January 2002. Since 1995, Mr. Kirk has overseen our profit
center operations in Arizona, California, Colorado, New Mexico, Nevada,
Washington and Wyoming, as well as in El Paso, Texas. Prior to undertaking his
current duties, Mr. Kirk served as profit center manager of our Phoenix, Arizona
retail office from 1995 to 2000.
 
         J. Scott Penny. Mr. Penny was elected as one of our Regional Executive
Vice Presidents in January 2002. Mr. Penny oversees our profit center operations
in Indiana, Iowa, Ohio, Michigan, Minnesota, North Dakota and Wisconsin. Since
1999, Mr. Penny has served as profit center manager of our Indianapolis, Indiana
retail office. Prior to that, Mr. Penny served as profit center manager of our
Jacksonville, Florida retail office from 1997 to 1999.
 
         Thomas E. Riley. Mr. Riley was elected as one of our Regional Executive
Vice Presidents in January 2002. Since 1999, Mr. Riley has overseen our profit
center operations in southeastern Florida, as well as in Connecticut, New
Jersey, New York, and Pennsylvania. Prior to undertaking his current duties, Mr.
Riley served as profit center manager of our Fort Lauderdale, Florida retail
office from 1992 to 2001 and served as Chief Financial Officer from 1990 to
1991.
 
         Cory T. Walker. Mr. Walker has been our Vice President, Treasurer and
Chief Financial Officer since 2000. Mr. Walker previously served as our Vice
President and Chief Financial Officer from 1992 to 1994. Between 1995 and 2000,
Mr. Walker served as profit center manager for our Oakland, California retail
office. Before joining us, Mr. Walker was a Senior Audit Manager for Ernst &
Young LLP.

                                      51

<PAGE>

         Laurel L. Grammig. Ms. Grammig has been our Vice President, Secretary
and General Counsel since 1994. Before joining us, Ms. Grammig was a partner of
the law firm of Holland & Knight LLP in Tampa, Florida.
 
         Thomas M. Donegan, Jr. Mr. Donegan has been our Vice President,
Assistant Secretary and Assistant General Counsel since 2000. Before joining us,
Mr. Donegan was an associate with the law firm of Smith, Gambrell & Russell LLP
in Atlanta, Georgia.

         M. Catherine Wellman. Ms. Wellman has been our Assistant General
Counsel since 2000 and was elected as our Vice President and Assistant Secretary
in January 2001. Before joining us, Ms. Wellman was an associate with the law
firm of Meier, Lengauer, Bonner, Muszynski & Doyle, P.A. in Orlando, Florida.

            SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers and directors, and persons who own more than 10% of our
outstanding shares of common stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
10% shareholders are required by SEC regulations to furnish us with copies of
all Section 16(a) reports they file.

Based solely on our review of the copies of such reports furnished to us and
written representations from certain reporting persons that no SEC Form 5s were
required to be filed by those persons, we believe that during 2001, our
officers, directors and 10% beneficial owners timely complied with all
applicable filing requirements, except for David H. Hughes, a director, who was
late in filing one Form 4 with respect to one transaction (the subject
transaction has since been reported), and C. Roy Bridges, Linda S. Downs,
Kenneth D. Kirk, Thomas E. Riley, and Dan W. Williamson, who did not timely
file a Form 3 after qualifying in October 2001 as our "executive officers"
under the SEC's rules (Form 5s including the information required on Form 3 have
since been filed for each of these individuals). (Mr. Williamson resigned as an
"executive officer" in January 2002 but continues to serve as profit center
manager of our Toledo, Ohio retail office.)


ITEM 11. EXECUTIVE COMPENSATION

         The following table sets forth the compensation received by our Chief
Executive Officer, and the four other highest paid executive officers in 2001
(the "Named Executive Officers") for services rendered to us in such capacity
for each of the three years, as applicable, in the period ended December 31,
2001:

                                      52

<PAGE>


SUMMARY COMPENSATION TABLE



<TABLE>
<CAPTION>
                                                                                                 LONG-TERM COMPENSATION
                                                      ANNUAL COMPENSATION                                AWARDS
                                      -----------------------------------------------------     -------------------------
                                                                                   OTHER
                                                                                  ANNUAL        SECURITIES     ALL OTHER
                                                                               COMPENSATION     UNDERLYING   COMPENSATION
NAME AND PRINCIPAL POSITION               YEAR        SALARY($)    BONUS($)        ($)(1)       OPTIONS (#)     ($)(2)
---------------------------           -----------  ------------- -----------  -------------    ------------- ------------
<S>                                   <C>          <C>           <C>          <C>              <C>           <C>
J. Hyatt Brown..................         2001      $   529,167   $   502,205           --               --   $     6,800
 Chairman of the Board,.........         2000          493,835       342,568           --               --         6,800
 President & Chief Executive....         1999          426,381       292,364           --               --         6,400
  Officer

Jim W. Henderson(3).............         2001      $   346,466   $   526,799  $    16,118               --   $     6,800
 Executive Vice President.......         2000          334,375       325,000       10,306          239,116         6,800
                                         1999          325,350       254,000        6,900               --         6,400


Thomas E. Riley(4)..............         2001      $   246,270   $   510,000  $    16,118               --   $     6,800
 Regional Executive Vice  President

Kenneth D. Kirk(5)..............         2001      $   271,687   $   404,942  $    15,945               --   $     6,800
 Regional Executive Vice  President

C. Roy Bridges(6)...............         2001      $   267,105   $   404,966  $    13,254               --   $     6,800
 Regional Executive Vice
  President
</TABLE>


(1)      Certain of the Named Executive Officers have been granted shares of
         performance stock under our stock performance plan. For a
         description of the terms of such grants, the number of shares granted
         and the value of such shares, see "Executive Compensation - Long-Term
         Incentive Plans - Awards in Last Fiscal Year," below. These dollar
         amounts reflect cash dividends paid to officer-grantees on those
         granted performance stock shares that have met the first condition
         for vesting.

(2)      Amounts shown represent our 401(k) plan profit sharing and matching
         contributions.

(3)      Mr. Henderson was originally granted 59,779 options under our
         incentive stock option plan, effective April 21, 2000. On August 23,
         2000 and November 21, 2001, respectively, we implemented a 2-for-1
         stock split, each effected as a stock dividend. Under the incentive
         stock option plan, the number of shares underlying granted options are
         automatically adjusted to reflect any stock dividend, stock split,
         reverse stock split, recapitalization, combination, reclassification
         or similar event or change in our capital structure. The weighted
         average exercise price per share for the granted options is $9.67,
         which represents the closing market price of our common stock on
         April 20, 2000 of $38.69, after adjustment by our Compensation
         Committee for the two aforementioned 2-for-1 stock splits.

(4)      By virtue of undertaking policy-making functions, Mr. Riley qualified
         under applicable securities regulations as a Named Executive Officer
         in October 2001 and was elected as a Regional Executive Vice President
         in January 2002.

(5)      By virtue of undertaking policy-making functions, Mr. Kirk qualified
         under applicable securities regulations as a Named Executive Officer
         in October 2001 and was elected as a Regional Executive Vice President
         in January 2002.


                                      53

<PAGE>


(6)      By virtue of undertaking policy-making functions, Mr. Bridges
         qualified under applicable securities regulations as a Named Executive
         Officer in October 2001 and was elected as a Regional Executive Vice
         President in January 2002.

OPTION GRANTS IN 2001

Grants of stock options under our incentive stock option plan are intended to
provide an incentive for key employees to achieve our short- to medium-range
performance goals. This is done generally by tying the vesting of granted
options to the grantee's region or profit center achieving compound annual
growth in pre-tax earnings in excess of 15% over pre-tax earnings for 1999, the
plan's base year, for the three-year period ending December 31, 2002. The
granted options will vest as these performance standards are achieved or on the
day prior to the ten-year anniversary date of the grant, whichever is earlier.
Vested stock options may be exercised only pursuant to a schedule set forth in
each grantee's agreement with us. The grantee may not sell or transfer any
granted stock options.

         No stock options were granted to the Named Executive Officers in 2001.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

         No stock options granted under our incentive stock option plan
were exercised during fiscal year 2001. The closing market price of our stock
underlying the granted options was $27.30 per share as of December 31, 2001. The
resulting difference between the year-end market price and the adjusted exercise
price per-share of $9.67 is $17.63 per share. Therefore, the values at fiscal
year-end of unexercised in-the-money options granted to the Named Executed
Officers are as set forth in the table below:



<TABLE>
<CAPTION>
                                             NUMBER OF SECURITIES UNDERLYING
                                                 UNEXERCISED OPTIONS AT            VALUE OF UNEXERCISED IN-THE-MONEY
                                                   DECEMBER 31, 2001($)              OPTIONS AT DECEMBER 31, 2001($)
                                            ---------------------------------     -----------------------------------
NAME                                         EXERCISABLE       UNEXERCISABLE       EXERCISABLE          UNEXERCISABLE
----                                         -----------       -------------      -------------         -------------
<S>                                          <C>               <C>                <C>                  <C>
J. Hyatt Brown......................                --                  --                  --                 --
Jim W. Henderson....................            10,340             228,776            $182,294         $4,033,321
Thomas E. Riley.....................            10,340             116,404             182,294          2,052,203
Kenneth D. Kirk.....................            10,340              57,124             182,294          1,007,096
C. Roy Bridges......................            10,340             185,324             182,294          3,267,262
</TABLE>


LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR

         Grants of stock under our stock performance plan are intended to
provide an incentive for key employees to achieve our long-range performance
goals, generally by providing incentives to remain with us for a long period
after the grant date and by tying the vesting of the grant to appreciation of
our stock price. The table below sets forth the number of shares of performance
stock granted to the Named Executive Officers in 2001 and the criteria for
vesting.



<TABLE>
<CAPTION>
                                                                                     PERFORMANCE OR OTHER PERIOD
NAME                                             NUMBER OF SHARES(1)(2)             UNTIL MATURATION OR PAYOUT(3)
----                                             ----------------                   --------------------------
<S>                                              <C>                                <C>
J. Hyatt Brown.....................                          --                                      --
Jim W. Henderson...................                      20,000                                15 years
Thomas E. Riley....................                      20,000                                15 years
Kenneth D. Kirk....................                      20,000                                15 years
C. Roy Bridges.....................                      20,000                                15 years
</TABLE>



                                      54

<PAGE>


(1)      None of the shares of performance stock granted to the Named Executive
         Officers has fully vested as of the date hereof. In order for the
         grants described above to fully vest, (i) the grantee would have to
         remain with us for a period of 15 years from the date of grant
         (subject to the exceptions set forth in footnote (3) below), and (ii)
         our stock price would have to appreciate at a specified rate during
         the five-year period beginning on the grant date. For each 20% increase
         in an average stock price over a 20 trading day period within such
         five-year period, dividends will be payable to the grantee on 20% of
         the shares granted and the grantee will have the power to vote such
         shares. The grantee will not have any of the other indicia of ownership
         (e.g., the right to sell or transfer the shares) until such shares are
         fully vested.

(2)      The dollar value of the respective grants to Messrs. Henderson, Riley,
         Kirk, and Bridges on April 1, 2001, the date of grant, was $350,000.
         This value represents the number of shares granted multiplied by the
         closing market price of our common stock on the New York Stock
         Exchange on the date of grant, as adjusted for our 2-for-1 common stock
         split effected November 21, 2001. The aggregate number of shares of
         performance stock granted to the Named Executive Officers as of
         December 31, 2001 was 115,300 for Mr. Henderson, 115,300 for Mr. Riley,
         114,220 for Mr. Kirk, and 97,400 for Bridges. The corresponding dollar
         values of all shares of performance stock granted to the Named
         Executive Officers as of December 31, 2001 were $3,147,690 for Mr.
         Henderson, $3,147,690 for Mr. Riley, $3,118,206 for Mr. Kirk, and
         $2,659,020 for Mr. Bridges.

(3)      If the grantee's employment with us were to terminate before the end
         of the 15-year vesting period, such grantee's interest in his shares
         would be forfeited unless (i) the grantee has attained age 64, (ii)
         the grantee's employment with us terminates as a result of his death
         or disability, or (iii) the Compensation Committee, in its sole and
         absolute discretion, waives the conditions of the grant of performance
         stock.

EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENTS

         Effective July 29, 1999, J. Hyatt Brown entered into an Employment
Agreement that superseded Mr. Brown's prior agreement with us. The agreement
provides that Mr. Brown will serve as Chairman of the Board, President and
Chief Executive Officer. The agreement also provides that upon termination of
employment, Mr. Brown will not directly or indirectly solicit any of our
clients or employees for a period of three years.

         The agreement requires us to make a payment to an escrow account upon
a Change of Control (as defined in the agreement). If, within three years after
the date of such Change of Control, Mr. Brown is terminated or he resigns as a
result of certain Adverse Consequences (as defined in the agreement), the
amount in the escrow account will be released to Mr. Brown. The amount of the
payment will be equal to two times the following amount: three times the sum of
Mr. Brown's annual base salary and most recent annual bonus, multiplied by a
factor of one plus the percentage representing the percentage increase, if any,
in the price of our common stock between the date of the agreement and the
close of business on the first business day following the date the public
announcement of the Change of Control is made. Mr. Brown will also be entitled
to receive all benefits he enjoyed prior to the Change of Control for a period
of three years after the date of termination of his employment.

         As defined in the agreement, a "Change of Control" includes the
acquisition by certain parties of 30% or more of our outstanding voting
securities, certain changes in the composition of the Board of Directors that
are not approved by the incumbent Board, and the approval by our shareholders
of a plan of liquidation, certain mergers or reorganizations, or the sale of
substantially all of our assets. The "Adverse Consequences" described above
generally involve our breach of the agreement, a change in the terms of Mr.


                                      55

<PAGE>


Brown's employment, a reduction in our dividend policy, or a diminution in Mr.
Brown's role or responsibilities.

         We entered into the agreement with Mr. Brown after determining that it
was in our best interests and our shareholders' best interests to retain his
services in the event of a threat or occurrence of a Change of Control and
thereafter, without alteration or diminution of his continuing leadership role
in determining and implementing our strategic objectives. We also recognized
that, unlike our other key personnel who participate in our stock performance
plan, Mr. Brown does not participate in that plan and would not enjoy the
benefit of the immediate vesting of stock interests granted pursuant to that
plan in the event of a Change of Control. Brown & Brown or Mr. Brown may
terminate his employment at any time with 30 days' notice.

         Jim W. Henderson, C. Roy Bridges, Linda S. Downs, Kenneth D. Kirk, J.
Scott Penny, Thomas E. Riley, Cory T. Walker, Laurel L. Grammig, Thomas M.
Donegan, Jr., and M. Catherine Wellman have each entered into standard
employment agreements with us. These agreements may be terminated by either
party (in the case of Mr. Henderson, Ms. Downs, and Mr. Kirk, upon 30 days'
advance written notice). Compensation under these agreements is at amounts
agreed upon between us and the employee from time to time. Additionally, for a
period of two years following the termination of employment (three years in the
case of Mr. Henderson, Ms. Downs, Mr. Kirk, and Mr. Riley), these agreements
prohibit the employee from directly or indirectly soliciting or servicing our
clients or employees.

         John R. Riedman entered into an Employment Agreement with the Company,
effective January 1, 2001. See Item 13, "Certain Relationships and Related
Transactions."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         The members of our Compensation Committee during 2001 were Samuel P.
Bell, III (Chairman), Bradley Currey, Jr., Theodore J. Hoepner, David H.
Hughes, Toni Jennings and Jan E. Smith.

         Samuel P. Bell, III is a partner in the law firm of Pennington, Moore,
Wilkinson, Bell & Dunbar, P.A. and serves as Of Counsel to the law firm of Cobb
Cole & Bell. Cobb Cole & Bell performed services for us in 2001 and is expected
to continue to perform legal services for us during 2002.

         Theodore J. Hoepner is the Vice Chairman of SunTrust Banks, Inc. We
have a $50 million line of credit and a $90 million term loan with SunTrust
Banks, Inc. We expect to continue to use SunTrust Banks, Inc. during 2002 for
some of our cash management requirements. Additionally, SunTrust Robinson
Humphrey Capital Markets, a division of SunTrust Capital Markets, Inc., the
investment banking subsidiary of SunTrust Banks, Inc., may provide investment
banking services to us from time to time. Mr. Brown and Mr. Hughes are each
directors of SunTrust Banks, Inc. Ms. Jennings is a director of SunTrust
Bank/Central Florida. Mr. Smith is a director of SunTrust Bank/Gulf Coast.
For other transactions involving management and us, see "Management -
Transactions with Management and Others."


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, as of December 31, 2001, information as
to our common stock beneficially owned by (1) each of our directors, (2) each
executive officer named in the Summary Compensation Table, (3) all of our
directors and executive officers as a group, and (4) any person who we know to
be the beneficial owner of more than 5% of the outstanding shares of our common
stock:


                                      56

<PAGE>



<TABLE>
<CAPTION>
                                                                         AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER                                             BENEFICIAL OWNERSHIP(1)(2)(3)  PERCENT OF TOTAL
------------------------                                             -----------------------------  ----------------
<S>                                                                  <C>                            <C>
J. Hyatt Brown(4).............................................                 10,891,244                 17.2%
  220 South Ridgewood Avenue
  Daytona Beach, Florida  32114
Samuel P. Bell, III(5)........................................                       6,800                   *
C. Roy Bridges(6).............................................                     167,508                   *
Bradley Currey, Jr............................................                     144,100                   *
Jim W. Henderson(7)...........................................                     564,431                   *
Theodore J. Hoepner...........................................                       6,000                   *
David H. Hughes...............................................                      10,000                   *
Toni Jennings.................................................                       1,324                   *
Kenneth D. Kirk(8)............................................                     666,918                 1.1%
John R. Riedman...............................................                      20,000                   *
Thomas E. Riley...............................................                     185,640                   *
Jan E. Smith(9)...............................................                       3,400                   *
T. Rowe Price Associates, Inc.(10)............................                   5,417,800                 8.6%
  100 E. Pratt Street
  Baltimore, MD 21202
All current directors and executive officers as a group
(18 persons)..................................................                  13,113,287                20.8%
</TABLE>


---------
* Less than 1%

(1)      Beneficial ownership of shares, as determined in accordance with
         applicable Securities and Exchange Commission rules, includes shares
         as to which a person has or shares voting power and/or investment
         power. We have been informed that all shares shown are held of record
         with sole voting and investment power, except as otherwise indicated.
         All share amounts, percentages and share values have been adjusted to
         reflect any applicable stock splits effected by us.

(2)      The number and percentage of shares owned by the following persons
         include the indicated number of shares owned through our 401(k) Plan
         as of December 31, 2001: Mr. Bridges - 19,302; Mr. Henderson -
         238,447; Mr. Kirk - 0; Mr. Riley - 30,148; all directors and officers
         as a group - 327,618. The number and percentage of shares owned by the
         following persons also include the indicated number of shares which
         such persons have been granted under our stock performance plan as of
         December 31, 2001 and which have satisfied the first condition for
         vesting: Mr. Bridges - 89,400; Mr. Henderson - 107,300; Mr. Kirk -
         106,220; Mr. Riley - 107,300; all directors and officers as a group -
         705,728. These stock performance plan shares have voting and dividend
         rights, but the holders thereof have no power to sell or dispose of
         the shares, and the shares are subject to forfeiture. See "Executive
         Compensation - Long-Term Incentive Plans - Awards in Last Fiscal
         Year."

(3)      Also includes any options exercisable within 60 days of December 31,
         2001 granted to directors and officers under our incentive stock option
         plan. On April 21, 2000, the indicated number of options were granted
         to the following persons under the incentive stock option plan: Mr.
         Henderson - 239,116; Mr. Bridges - 195,664; Mr. Kirk - 67,464; Mr.
         Riley - 126,744; all directors and officers as a group - 915,716. Of
         these granted amounts, 10,340 options became exercisable by each such
         Named Executive Officer and by Ms. Downs on April 21, 2001.


                                      57

<PAGE>


         and the underlying shares are therefore deemed to be beneficially
         owned. An additional 10,340 options will become exercisable by each
         such Named Executive Officer on April 21, 2002.

(4)      All shares are beneficially owned jointly with Mr. Brown's spouse,
         either directly or indirectly, and these shares have shared voting and
         investment power.

(5)      All shares are held in joint tenancy with Mr. Bell's spouse, and these
         shares have shared voting and investment power.

(6)      Mr. Bridges' ownership includes 6,080 shares held in joint tenancy
         with Mr. Bridges' wife, which shares have shared voting and investment
         power. Mr. Bridges' ownership also includes 1,250 shares owned by his
         spouse, as to which he disclaims beneficial ownership.

(7)      Mr. Henderson's ownership includes 179,224 shares held in joint
         tenancy with Mr. Henderson's wife, which shares have shared voting and
         investment power.

(8)      Mr. Kirk's ownership includes 550,358 shares held in a revocable
         family trust for which Mr. Kirk and his spouse serve as Trustees.

(9)      Mr. Smith's ownership includes 1,400 shares owned by his spouse, as to
         which he disclaims beneficial ownership.

(10)     Based upon information contained in a report filed by T. Rowe Price
         Associates, Inc. ("Price Associates") with the Securities and Exchange
         Commission, these securities are owned by various individuals and
         institutional investors, including T. Rowe Price Small-Cap Value Fund
         (which owns 2,123,500 shares, representing 3.4% of the shares
         outstanding), for which Price Associates serves as investment adviser
         with power to direct investments and/or sole power to vote the
         securities. Under Securities and Exchange Commission rules, Price
         Associates is deemed to be a beneficial owner of such securities;
         however, Price Associates disclaims beneficial ownership of such
         securities.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Effective as of January 1, 2001, we acquired all of the insurance
agency business-related assets of Riedman Corporation ("Riedman"), based in
Rochester, New York. As of January 1, 2001, Riedman's capital stock was owned by
John R. Riedman, James R. Riedman and a trust, the equal beneficiaries of which
were John R. Riedman's four children, James R. Riedman, David J. Riedman,
Katherine R. Griswold, and Susan R. Holliday. Simultaneously with this
transaction, Brown & Brown of Wyoming, Inc. ("Brown & Brown-Wyoming"), one of
our wholly-owned subsidiaries, acquired all of the insurance agency
business-related assets of Riedman Insurance of Wyoming, Inc.
("Riedman-Wyoming"), a wholly-owned subsidiary of Riedman based in Cheyenne,
Wyoming. These acquisitions, recorded using the purchase method of accounting,
were made pursuant to an asset purchase agreement among us, Riedman, and
Riedman's shareholders, a purchase agreement between us and Andrew Meloni, a key
employee of Riedman, and a general assignment and bill of sale from
Riedman-Wyoming to Brown & Brown-Wyoming.

         The aggregate consideration for these assets, which is payable in cash
in three installments by us and Brown & Brown-Wyoming, was equal to
approximately 1.55 times Riedman's revenues for the year 2000 less certain
Riedman debt related to its prior acquisitions, which we assumed. Cory T.
Walker, our Vice President, Treasurer and Chief Financial Officer, determined
the purchase price of the assets we acquired, based upon the above-described
formula. The cash consideration paid by us and Brown &


                                      58

<PAGE>


Brown-Wyoming at closing was approximately $61,566,572. Certain of the assets
acquired in these transactions were acquired by Riedman within two years prior
to the transactions, at an approximate aggregate cost of $12,135,000.

         Riedman is the landlord under a lease agreement with us, as tenant,
with respect to office space in Rochester, New York that was entered into in
connection with the transactions referenced in the preceding paragraph. The
lease provides for our payment of annual rent of $300,000 for a term of five
years from January 2001. Additionally, we assumed and took assignment of a
covenant not to compete owed to Riedman from John R. Riedman's brother, Frank
Riedman. We received a discounted credit toward the asset purchase price for
amounts payable to Frank Riedman pursuant to this assumed obligation. We will
pay Frank Riedman ten equal quarterly installments of $82,500 which commenced
January 2001.

         In January 2001, John R. Riedman, Chairman of Riedman, was elected as
one of our directors, and also became one of our Executive Vice Presidents and
Vice Chairman of Brown & Brown of New York, Inc., one of our subsidiaries. Mr.
John Riedman was paid an annual salary of $150,000 in 2001 pursuant to an
employment agreement with us that provides for a minimum term of one year, and
continues thereafter until terminated in accordance with its terms.

         James R. Riedman, President of Riedman, is John R. Riedman's son and
was elected in January 2001 as an Executive Vice President of Brown & Brown of
New York, Inc. Mr. James Riedman was paid an annual salary of $150,000 pursuant
to an employment agreement with us that provided for a minimum term of four
months, and continued thereafter until terminated in accordance with its terms.
Mr. James Riedman resigned in June 2001.

         As of January 2001, Mr. John Riedman directly owned 25.5% of Riedman's
capital stock, Mr. James Riedman and an unrelated third party each directly
owned 1.8% of such stock, and Mr. John Riedman's children beneficially owned
the remainder of such stock through the aforementioned trust. In addition, we
received a credit toward the asset purchase price for amounts payable by us for
covenants not to compete with terms of five years entered into with Mr. John
Riedman and each of his four children. At closing, we paid an aggregate of
$1,250,000 split equally among Mr. John Riedman and his four children for such
covenants. Additionally, Mr. John Riedman and Mr. James Riedman were each paid
$250,000 in 2001 and will each be paid $250,000 annually for the next two years
for their respective covenants.

         J. Powell Brown, who is the son of J. Hyatt Brown, is employed by us
as the profit center manager for the Orlando, Florida retail office and
received compensation of $360,277 for services rendered to us in 2001. P.
Barrett Brown, who is also the son of J. Hyatt Brown, is employed by Brown &
Brown Insurance of Arizona, Inc., one of our subsidiaries as a producer in
that subsidiary's Phoenix, Arizona retail office, and received compensation of
$75,966 for services rendered to that subsidiary in 2001.

         Eileen Craig, who is the sister-in-law of Kenneth D. Kirk, was
employed in 2001 by Brown & Brown Insurance of Arizona, Inc. as profit center
manager for the Tucson, Arizona retail office, and received compensation of
$80,350 for services rendered to that subsidiary in 2001. Ms. Craig resigned in
January 2002.

         Joanne B. Penny, who is the mother of J. Scott Penny, is employed by us
as a producer in our Daytona Beach, Florida retail office and received
compensation of $168,552 for services rendered in 2001.

         For other transactions involving management and us, see "Executive
Compensation - Compensation Committee Interlocks and Insider Participation."


                                      59

<PAGE>



                                    PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

         (a)      The following documents are filed as part of this report:

                  1.       Consolidated Financial Statements of Brown & Brown,
                           Inc. consisting of:

                           (a)      Consolidated Statements of Income for each
                                    of the three years in the period ended
                                    December 31, 2001.

                           (b)      Consolidated Balance Sheets as of December
                                    31, 2001 and 2000.

                           (c)      Consolidated Statements of Shareholders'
                                    Equity for each of the three years in the
                                    period ended December 31, 2001.

                           (d)      Consolidated Statements of Cash Flows for
                                    each of the three years in the period ended
                                    December 31, 2001.

                           (e)      Notes to Consolidated Financial Statements.

                           (f)      Report of Independent Certified Public
                                    Accountants.

                  2.       Consolidated Financial Statement Schedules. The
                           Consolidated Financial Statement Schedules are
                           omitted because they are not applicable.

                  3.       EXHIBITS

                           2a       Agreement and Plan of Reorganization, dated
                                    as of July 25, 2001, by and among the
                                    Registrant, Brown & Brown of Washington,
                                    Inc., Raleigh, Schwarz & Powell, Inc. and
                                    the Raleigh, Schwarz & Powell, Inc.
                                    Employee Stock Ownership Plan (incorporated
                                    by reference to Exhibit 2.1 to Form S-4/A
                                    filed October 3, 2001).

                           2b       Amendment No. 1 to Agreement and Plan of
                                    Reorganization, dated as of August 10,
                                    2001, by and among the Registrant, Brown &
                                    Brown of Washington, Inc., Raleigh, Schwarz
                                    & Powell, Inc. and the Raleigh, Schwarz &
                                    Powell, Inc. Employee Stock Ownership Plan
                                    (incorporated by reference to Exhibit 2.2
                                    to Form S-4/A filed October 3, 2001).

                           3a       Articles of Amendment to Articles of
                                    Incorporation (incorporated by reference to
                                    Exhibit 3a to Form 10-Q for the quarter
                                    ended September 30, 2001), and Amended and
                                    Restated Articles of Incorporation
                                    (incorporated by reference to Exhibit 3a to
                                    Form 10-Q for the quarter ended March 31,
                                    1999).

                           3b       Amended and Restated Bylaws of the
                                    Registrant (incorporated by reference to
                                    Exhibit 3b to Form 10K for the year ended
                                    December 31, 1996).


                                       60

<PAGE>


                           10a      Amended and Restated Revolving and Term
                                    Loan Agreement dated January 3, 2001 by and
                                    between the Registrant and SunTrust Bank
                                    (incorporated by reference to Exhibit 4a to
                                    Form 10-K for the year ended December 31,
                                    2001).

                           10a(1)   Extension of the Term Loan Agreement
                                    between the Registrant and SunTrust
                                    (incorporated by reference to Exhibit 10b
                                    to Form 10-Q for the quarter ended
                                    September 30, 2000).

                           10a(2)   Asset Purchase Agreement dated September
                                    11, 2000, by and among the Registrant,
                                    Riedman Corporation, and Riedman
                                    Corporation's shareholders (incorporated by
                                    reference to Exhibit 10a to Form 10-Q for
                                    the quarter ended September 30, 2000).

                           10a(3)   First Amendment to Asset Purchase
                                    Agreement, dated January 3, 2001, by and
                                    among the Registrant, Riedman Corporation,
                                    and Riedman Corporation's shareholders
                                    (incorporated by reference to Exhibit 10(b)
                                    to Form 8-K filed on January 18, 2001).

                           10a(4)   General Assignment and Bill of Sale, dated
                                    January 1, 2001, from Riedman Insurance of
                                    Wyoming, Inc. to Brown & Brown of Wyoming,
                                    Inc. (incorporated by reference to Exhibit
                                    10(c) to Form 8-K filed on January 18,
                                    2001).

                           10b(1)   Lease of the Registrant for office space at
                                    220 South Ridgewood Avenue, Daytona Beach,
                                    Florida dated August 15, 1987 (incorporated
                                    by reference to Exhibit 10a(3) to Form 10-K
                                    for the year ended December 31, 1993).

                           10b(2)   Lease Agreement for office space at
                                    SunTrust Financial Centre, Tampa, Florida,
                                    dated February 1995, between Southeast
                                    Financial Center Associates, as landlord,
                                    and the Registrant, as tenant (incorporated
                                    by reference to Exhibit 10a(4) to Form 10-K
                                    for the year ended December 31, 1994).

                           10b(3)   Lease Agreement for office space at Riedman
                                    Tower, Rochester, New York, dated January 3,
                                    2001, between Riedman Corporation, as
                                    landlord, and the Registrant, as tenant
                                    (incorporated by reference to Exhibit 10b(3)
                                    to Form 10-K for the year ended December 31,
                                    2001).

                           10c(1)   Loan Agreement between Continental Casualty
                                    Company and the Registrant dated August 23,
                                    1991 (incorporated by reference to Exhibit
                                    10d to Form 10-K for the year ended
                                    December 31, 1991).

                           10c(2)   Extension to Loan Agreement, dated August
                                    1, 1998, between the Registrant and
                                    Continental Casualty Company (incorporated
                                    by reference to Exhibit 10c(2) to Form 10-Q
                                    for the quarter ended September 30, 1998).

                           10d      Indemnity Agreement dated January 1, 1979,
                                    among the Registrant, Whiting National
                                    Management, Inc., and Pennsylvania
                                    Manufacturers' Association Insurance
                                    Company (incorporated by reference to
                                    Exhibit 10g to Registration Statement No.
                                    33-58090 on Form S-4).


                                       61

<PAGE>


                           10e      Agency Agreement dated January 1, 1979
                                    among the Registrant, Whiting National
                                    Management, Inc., and Pennsylvania
                                    Manufacturers' Association Insurance
                                    Company (incorporated by reference to
                                    Exhibit 10h to Registration Statement No.
                                    33-58090 on Form S-4).

                           10f(1)   Deferred Compensation Agreement, dated May
                                    6, 1998, between the Registrant and Kenneth
                                    E. Hill (incorporated by reference to
                                    Exhibit 10l to Form 10-Q for the quarter
                                    ended September 30, 1998).

                           10f(2)   Letter Agreement, dated May 6, 1998,
                                    between the Registrant and Kenneth E. Hill
                                    (incorporated by reference to Exhibit 10m
                                    to Form 10-Q for the quarter ended
                                    September 30, 1998).

                           10g      Employment Agreement, dated as of July 29,
                                    1999, between the Registrant and J. Hyatt
                                    Brown (incorporated by reference to Exhibit
                                    10f to Form 10-K for the year ended
                                    December 31, 1999).

                           10h      Portions of Employment Agreement, dated
                                    April 28, 1993 between the Registrant and
                                    Jim W. Henderson (incorporated by reference
                                    to Exhibit 10m to Form 10-K for the year
                                    ended December 31, 1993).

                           10i      Employment Agreement, dated May 6, 1998
                                    between the Registrant and Kenneth E. Hill
                                    (incorporated by reference to Exhibit 10k
                                    to Form 10-Q for the quarter ended
                                    September 30, 1998).

                           10j      Employment Agreement, dated January 3, 2001
                                    between the Registrant and John R. Riedman
                                    (incorporated by reference to Exhibit 10j
                                    to Form 10-K for the year ended December
                                    31, 2000).

                           10k      Noncompetition, Nonsolicitation and
                                    Confidentiality Agreement, effective as of
                                    January 1, 2001 between the Registrant and
                                    John R. Riedman (incorporated by reference
                                    to Exhibit 10l to form 10-K for the year
                                    ended December 31, 2000).

                           10l      Asset Purchase Agreement, effective as of
                                    May 1, 2001, by and among Brown & Brown of
                                    Missouri, Inc., Parcel Insurance Plan,
                                    Inc., Overseas Partners Capital Corp., and
                                    Overseas Partners, Ltd.

                           10m      Asset Purchase Agreement, effective October
                                    1, 2001, by and among Brown & Brown of
                                    Lehigh Valley, Inc., Henry S. Lehr, Inc.,
                                    William H. Lehr, and Patsy A. Lehr.

                           10n(1)   Registrant's 2000 Incentive Stock Option
                                    Plan (incorporated by reference to Exhibit
                                    4 to Registration Statement No. 333-43018
                                    on Form S-8 filed on August 3, 2000).

                           10n(2)   Registrant's Stock Performance Plan
                                    (incorporated by reference to Exhibit 4 to
                                    Registration Statement No. 333-14925 on
                                    Form S-8 filed on October 28, 1996).


                                       62

<PAGE>


                           10o      Rights Agreement, dated as of July 30,
                                    1999, between the Registrant and First
                                    Union National Bank, as Rights Agent
                                    (incorporated by reference to Exhibit 4.1
                                    to Form 8-K filed on August 2, 1999).

                           10p      International Swap Dealers Association,
                                    Inc. Master Agreement dated as of December
                                    5, 2001 between SunTrust Bank and the
                                    Registrant and letter agreement dated
                                    December 6, 2001, regarding confirmation of
                                    interest rate transaction.

                           10q      Asset Purchase Agreement, effective October
                                    3, 2001, by and among Brown & Brown of
                                    Lehigh Valley, Inc., Apollo Financial
                                    Corporation, William H. Lehr and Patsy A.
                                    Lehr.

                           21       Subsidiaries of the Registrant.

                           23       Consent of Arthur Andersen LLP.

                           24       Powers of Attorney pursuant to which this
                                    Form 10-K has been signed on behalf of
                                    certain directors and officers of the
                                    Registrant.
                   
                        
         (b)      REPORTS ON FORM 8-K.

                  We filed the following Current Reports on Form 8-K during the
                  last quarter of the fiscal year ended December 31, 2001:

                  1.       Current Report on Form 8-K regarding the filing of a
                           "universal shelf" registration statement with the
                           Commission pursuant to Rule 415 under the Securities
                           Act of 1933, as amended, filed on December 19, 2001.

                  2.       Current Report on Form 8-K regarding the financial
                           results of at least 30 days of post-merger combined
                           operations with Raleigh, Schwarz & Powell, Inc. and
                           Golden Gate Holdings, Inc. filed on December 12,
                           2001.

                  3.       Current Report on Form 8-K regarding the completion
                           of the acquisition via merger of Raleigh, Schwarz &
                           Powell, Inc. and Golden Gate Holdings, Inc. filed on
                           November 6, 2001.

                  4.       Current Report on Form 8-K regarding the declaration
                           by the Board of Directors of the two-for-one stock
                           split effected November 21, 2001 and an increase in
                           the quarterly cash dividend amount, filed on October
                           24, 2001.

                  5.       Current Report on Form 8-K regarding our financial
                           results for the quarter ended September 30, 2001,
                           filed on October 2, 2001.


                                       63

<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.


                                             BROWN & BROWN, INC.
                                             Registrant


                                             By:           *
                                                -------------------------------
                                                J. Hyatt Brown
                                                Chief Executive Officer

Date:  February 14, 2002


                                       64

<PAGE>


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.



<TABLE>
<CAPTION>

SIGNATURE                                             TITLE                                      DATE
---------                                             -----                                      ----

<S>                                                   <C>                                        <C>
                            *                         Chairman of the Board, President           February 14, 2002
------------------------------
J. Hyatt Brown                                        and Chief Executive Officer
                                                        (Principal Executive Officer)

                            *                         Director                                   February 14, 2002
------------------------------
Samuel P. Bell, III

                            *                         Director                                   February 14, 2002
------------------------------
Bradley Currey, Jr.

                            *                         Director                                   February 14, 2002
------------------------------
Jim W. Henderson

                            *                         Director                                   February 14, 2002
------------------------------
David H. Hughes

                            *                         Director                                   February 14, 2002
------------------------------
Theodore J. Hoepner

                            *                         Director                                   February 14, 2002
------------------------------
Toni Jennings

                            *                         Director                                   February 14, 2002
------------------------------
John R. Riedman

                            *                         Director                                   February 14, 2002
------------------------------
Jan E. Smith

                            *                         Vice President, Treasurer and              February 14, 2002
------------------------------                        Chief Financial Officer (Principal
Cory T. Walker                                        Financial and Accounting Officer)

*By: /S/ LAUREL L. GRAMMIG
     ---------------------
     Laurel L. Grammig
     Attorney-in-Fact
</TABLE>



                                       65




<PAGE>
                                                                    EXHIBIT 10l


                            ASSET PURCHASE AGREEMENT

         This ASSET PURCHASE AGREEMENT, dated as of May 1, 2001 (this
"Agreement"), is made and entered into by and among BROWN & BROWN OF MISSOURI,
INC., a corporation incorporated under the laws of the State of Missouri
("Buyer"), PARCEL INSURANCE PLAN, INC., a corporation incorporated under the
laws of the State of Delaware ("Seller"), OVERSEAS PARTNERS CAPITAL CORP., a
corporation organized under the laws of the State of Delaware ("Parent") and
OVERSEAS PARTNERS LTD., a corporation organized under the laws of the Islands of
Bermuda ("OPL").

                                   BACKGROUND

         Seller has its principal executive offices in St. Louis, Missouri and
is engaged in the small package insurance (i.e., insurance of individual
packages under US$25,000.00 in value) agency business throughout the United
States (as more fully described in SECTION 1.2, the "Business"), and wishes to
sell substantially all of its assets relating to the Business to Buyer. Buyer
desires to acquire such assets upon the terms and conditions expressed in this
Agreement. OPL owns all of the outstanding capital stock of Parent, which in
turn owns all of the outstanding capital stock of Seller. OPL and Parent are
entering into this Agreement to provide certain non-competition,
 indemnification
and other assurances to Buyer as a material inducement for Buyer to enter into
this transaction.

         THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:

                                   ARTICLE 1.
                                 THE ACQUISITION

         Section 1.1       COVENANTS OF SALE AND PURCHASE. As of the Effective
Date (as defined in SECTION 2.6), at the Closing (as defined in SECTION 2.1) and
upon and subject to the terms and conditions of this Agreement, the parties
mutually covenant and agree as follows:

                  (a)      Seller shall sell, convey and assign to Buyer all of
its right, title and interest of Seller in and to the Acquired Assets (as
defined in SECTION 1.2), free and clear of all liens, pledges, security
interests, charges, restrictions or encumbrances of any nature whatsoever;

                  (b)      OPL shall agree to the non-competition covenants in
SECTION 5.2;

                  (c)      Buyer shall purchase the Acquired Assets from Seller
and assume the Assigned Contracts (as defined in SECTION 1.2(C)) in exchange for
the consideration described in SECTION 1.4(A)(I), SECTION 1.4(A)(II) and SECTION
1.4(A)(IV); and

                  (d)      Buyer shall receive the benefit of such covenants by
OPL in exchange for the consideration described in SECTION 1.4(A)(III).

         Section 1.2       THE ACQUIRED ASSETS. In this Agreement, the phrase
"Acquired Assets" means all of the assets of Seller described below:


<PAGE>

                  (a)      Purchased Book of Business. All of the Business,
including but not limited to the small package insurance agency business and
renewals and expirations thereof, together with all written or otherwise
recorded documentation, data or information relating to the Business, whether
compiled by Seller or by other agents or employees of Seller, including but not
limited to: (i) lists of insurance companies and records pertaining thereto; and
(ii) customer lists, prospect lists, policy forms, and/or rating information,
expiration dates, information on risk characteristics, information concerning
insurance markets for large or unusual risks, and all other types of written or
otherwise recorded information customarily used by Seller or available to
Seller, including all other records of and pertaining to the accounts and
customers of Seller, past and present, including, but not limited to, the active
insurance customers of Seller, all of whom are listed on Schedule 1.2(a) hereto
(collectively, the "Purchased Book of Business").

                  (b)      Intangibles. All intangible personal property
currently used by Seller in connection with the Business or pertaining to the
Acquired Assets, including without limitation the following:

                           (i)      all of Seller's Business records necessary
to enable Buyer to renew the Purchased Book of Business;

                           (ii)     the goodwill of the Business, including the
corporate name "Parcel Insurance Plan, Inc.", and any other trade names that are
currently used by Seller, and all telephone listings, post office boxes, mailing
addresses (to the extent transferable), and advertising signs and materials that
are currently used by Seller; and

                           (iii)    all Intellectual Property (as defined below)
related to the Business and currently used by Seller.

                  As used in this Agreement, the term "Intellectual Property"
means (A) all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (B) all trademarks and service marks,
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (C) all copyrightable
works, all copyrights, and all copyright applications, registrations, and
renewals in connection therewith, (D) all trade secrets and confidential
business information (including research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals), (E) all
computer software (including data and related documentation), but excluding
computer software commercially available to the general public and readily
replaceable, (F) all other proprietary rights, and (G) all copies and tangible
embodiments thereof (in whatever form or medium).

                  (c)      Assigned Contracts. All of Seller's (i)
non-solicitation and non-disclosure agreements and covenants not to compete
listed on Schedule 1.2(c)(i) and contracts and agreements described in SECTIONS
3.9(C)(I), (II), (IV) (but only with respect to capitalized lease obligations),
(V) (but only with respect to agreements that are in favor of Buyer) and (XII)
and listed on Schedule 3.9(c), and (ii) contracts and agreements that would be
required to be listed on Schedule 3.9(c) pursuant to SECTIONS 3.9(C)(I), (II),
(IV) (but only with respect to capitalized lease


                                       2

<PAGE>


obligations) and (XII) but for the amount of annual payments provided
thereunder, which are not listed on Schedule 3.9(c), which contracts and
agreements Seller has attempted in good faith to list on Schedule 1.2(c)(ii)
hereto (all of the contracts, agreements and instruments referenced in (i) and
(ii) of this SECTION 1.2(C) are collectively referred to herein as the "Assigned
Contracts").

                  (d)      Miscellaneous Items. All other assets of Seller
relating or pertaining to the Purchased Book of Business, which may include (i)
computer disks, servers, software, databases (whether in the form of computer
tapes or otherwise), related object and source codes, and associated manuals,
and any other records or media of storage or programs for retrieval of
information pertaining to the Purchased Book of Business, (ii) all supplies and
materials, including promotional and advertising materials, brochures, plans,
supplier lists, manuals and handbooks, and related written data and information,
(iii) all Internet web site content, related object and source codes, domain
names and addresses, (iv) claims, customer and other deposits (subject to the
assumption of the liabilities related thereto pursuant to SECTION 1.4(D)(I)),
prepayments, refunds, causes of action, choses in action, rights of recovery,
rights of set off, and rights or recoupment, (v) copies of personnel, benefit,
compensation and other records and documents relating to the employees of
Seller, and (vi) any transferable franchises, approvals, permits, licenses,
orders, registrations, certificates, variances and similar rights obtained from
Governmental Authorities (as defined in Section 3.5), in all cases excluding all
property and casualty agent licenses or broker licenses held by Seller or its
employees.

                  (e)      Tangible Property. All items of furniture, fixtures,
computers, office equipment and other tangible property used in the Business,
including but not limited to the property listed in Schedule 1.2(e). To the
extent that any of such items are subject to a lease identified in Schedule
3.9(c), Buyer shall assume such lease and acquire all of Seller's right, if any,
to acquire such property upon termination of such lease.

         Section 1.3       EXCLUSIONS AND EXCEPTIONS. Seller does not agree to
sell or assign, and Buyer does not agree to purchase or assume, any assets,
liabilities and obligations not described in SECTION 1.2 and SECTION 1.4(D)(I)
of this Agreement. Without limiting the foregoing and notwithstanding anything
to the contrary set forth in, Buyer shall not purchase or assume any of the
following:

                  (a)      Seller's cash in hand or in banks and other readily
liquid working capital as of the close of business on the Effective Date or the
Closing Date, whichever amount is greater, including Seller's accounts and other
receivables, money market certificates, stocks and bonds;

                  (b)      (i) any contract, lease or other obligation that
relates to the Acquired Assets or the Purchased Book of Business and is not
otherwise specifically assigned to Buyer under this Agreement (including,
without limitation, any agreement (except capitalized lease obligations)
described in SECTION 3.9(C)(IV) of this Agreement), or (ii) any contract, lease
or other obligation whatsoever not relating to the Acquired Assets or the
Purchased Book of Business;

                  (c)      (i) Seller's corporate charter and by-laws,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance, and
existence of Seller


                                       3

<PAGE>

as a corporation or (ii) any of the rights of Seller under this Agreement (or
under any other agreement between Seller on the one hand and Buyer on the other
hand entered into on or after the date of this Agreement);

                  (d)      except as set forth in SECTION 5.11(D), any duty or
liability of any type whatsoever with respect to any employee or to any pension
or profit sharing plan or other employee benefit including, without limitation,
those described in SECTION 3.19 hereof;

                  (e)      any liability of Seller, Parent, or any of their
respective directors, officers, employees, agents, affiliates or
representatives, with respect to any litigation, proceedings, or other actions
or disputes directly or indirectly involving such parties including, but not
limited to, any such actions or disputes set forth in Schedule 3.10 hereto;

                  (f)      (i) any liability of Seller for Taxes (as defined in
SECTION 6.6 hereof) arising in connection with the consummation of the
transactions contemplated hereby (including any income Taxes arising because
Seller is transferring the Acquired Assets), (ii) any obligation of Seller to
indemnify any person or entity (including Parent) by reason of the fact that
such person or entity was a director, officer, employee, or agent of Seller or
was serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such indemnification is
for judgments, damages, penalties, fines, costs, amounts paid in settlement,
losses, expenses, or otherwise and whether such indemnification is pursuant to
any statute, charter document, bylaw, agreement, or otherwise) (iii) any
liability of Seller for costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, or (iv) any liability or
obligation of Seller under this Agreement (or under any related agreement
between Seller on the one hand and Buyer on the other hand entered into on or
after the date of this Agreement); or

                  (g)      any documents, books, records, agreements,
correspondence and financial data, whether in paper, electronic, digital or
other format, which do not relate or pertain to the Business.

         Section 1.4       CONSIDERATION; ASSUMPTION OF LIABILITIES.

                  (a)      Buyer shall on the Closing Date: (i) assume the
Assumed Liabilities as provided in SECTION 1.4(D); (ii) deliver to Seller at the
Closing US$18,256,711.18 which equals (A) Twenty Million Seven Hundred Thousand
United States Dollars (US$20,700,000), plus (B) the amount by which the "Credit
Due Seller" as set forth in Schedule 1.4(a) exceeds the amount of the "Credit
Due Buyer" as set forth in Schedule 1.4(a) but not less than zero, minus (C)
US$168,264.17, the amount by which the "Credit Due Buyer" as set forth in
Schedule 1.4(a) exceeds the amount of the "Credit Due Seller" as set forth in
Schedule 1.4(a) but not less than zero, plus (D)US$24,975.35 the "Total Assumed
Liabilities" amount set forth on Schedule 1.4(d)(i), minus (E) US$2,300,000 (the
"Holdback Amount"); (iii) deliver to OPL at the Closing Two Million Three
Hundred Thousand United States Dollars (US$2,300,000.00); and (iv) deliver to
LeBoeuf, Lamb, Greene & MacRae, L.L.P. ("LeBoeuf") at the Closing the Holdback
Amount.

                  (b)      Subject to SECTION 1.4(C), all amounts payable by
Buyer pursuant to SECTION 1.4(A) shall be paid to Seller, OPL and LeBoeuf in
cash by wire transfer or delivery of other


                                       4

<PAGE>

immediately available funds in United States currency to one or more accounts
designated in writing by LeBoeuf, Seller and/or OPL no later than two (2)
business days prior to the date each such payment is to be made.

                  (c)      The Holdback Amount described in SECTION
1.4(A)(II)(E) shall be subject to reduction pursuant to SECTION 1.5 hereof to
offset any obligations of Seller or OPL under the indemnification provisions
contained in ARTICLE 6 hereof. Satisfaction of any indemnity obligations from
the Holdback Amount shall not operate to waive the indemnification obligations
of Seller or OPL contained in ARTICLE 6 for damages incurred by Buyer in excess
of such amounts. The Holdback Amount plus interest as provided in SECTION 1.5
hereof as may be reduced pursuant to SECTION 1.5 hereof, shall be paid to Seller
on April 30, 2002 (or the next business day if April 30, 2002 is not a business
day).

                  (d)      As of the Effective Date, at the Closing and as
additional consideration for the purchase of the Acquired Assets, Buyer shall
execute and deliver to Seller:

                           (i)      an assumption agreement, in substantially
the form attached hereto as Exhibit A (the "Assumption Agreement"), pursuant to
which Buyer shall assume from Seller and agree, subject to SECTION 1.3, to pay,
perform and discharge when due, to the extent the same are unpaid, unperformed
or undischarged on the Effective Date, all of the liabilities and obligations of
Seller (A) which arise under the terms of any Assigned Contract, or (B) which
are set forth on Schedule 1.4(d)(i) (collectively, the "Assumed Liabilities");
and

                           (ii)     a bill of sale and assignment, in
substantially the form attached hereto as Exhibit B (the "Bill of Sale and
Assignment").

                  (e)      For federal and state income tax purposes, the
parties agree to allocate the aggregate consideration set forth in SECTION
1.4(A) as follows: (i) $546,649 shall be allocated to the tangible property
listed on Schedule 1.2(e); (ii) $2,300,000 shall be allocated to the covenants
of OPL set forth in SECTION 5.2 hereof; and (iii) the remainder shall be
allocated to the Purchased Book of Business (the "Allocation"). Each of Buyer
and Seller shall file, in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"), an Asset Acquisition Statement on Form 8594 with its
federal income tax return for the tax year in which the Closing Date occurs, and
shall contemporaneously provide the other party with a copy of the Form 8594
being filed. The Form 8594 shall be consistent with the Allocation. Each of
Buyer and Seller also shall prepare any additional Forms 8594 from time to time
as are required to reflect any adjustments to the consideration set forth in
SECTION 1.4(A), and shall provide the other party with a copy of the additional
Form 8594 within 60 days after the calendar year in which the adjustment occurs.
The final version of each additional Form 8594 as agreed to by Buyer and Seller
shall be timely filed by each of Buyer and Seller.

         Section 1.5       ESCROW OF HOLDBACK AMOUNT.

                  (a)      At the Closing, Buyer, Seller and LeBoeuf shall enter
into the Escrow Agreement in the form attached hereto as Exhibit C. Subject to
SECTION 1.5(c), the Escrow Fund thereunder shall be subject to withdrawal by
Buyer in whole or in part to satisfy Seller's and OPL's indemnification
obligations hereunder, with the balance of the Holdback Amount, if any,
remaining


                                       5

<PAGE>

after such withdrawals and payments, plus all accumulated interest
thereon, liquidated promptly after April 30, 2002 and, no later than three (3)
business days after such liquidation, delivered to Seller.

                  (b)      Promptly after the Closing, Buyer and Seller shall
direct LeBoeuf to transfer the Holdback Amount plus any interest thereon to a
financial institution within or without the United States (the "Bank") as
selected by Seller (subject to the reasonable approval of Buyer), which shall
hold such amount in a money market deposit account, in Buyer's name and
designated as the "Parcel Insurance Plan Escrow Account", which shall bear
interest at the prevailing rate offered by such financial institution for such
accounts. Such account, subject to SECTION 1.5(C), shall be subject to
withdrawal by Buyer in whole or in part to satisfy Seller's or OPL's
indemnification obligations hereunder, with the balance of the Holdback Amount,
if any, remaining after any such withdrawals and payments, plus all accumulated
interest thereon, liquidated promptly after April 30, 2002 and, no later than
three (3) business days after such liquidation, delivered to Seller.

                  (c)      Upon the occurrence of an indemnifiable event under
ARTICLE 6 hereof, Buyer shall first make a claim for the indemnifiable amount
resulting from such indemnifiable event from the Holdback Amount and shall
provide written notice of intention to make a withdrawal from the Escrow Fund
under the Escrow Agreement referenced in SECTION 1.5(A) or the money market
deposit account referenced in SECTION 1.5(B), as the case may be, to Seller or
OPL. Such notice shall summarize the reason for such withdrawal and the amount
of the Holdback Amount to be applied in satisfaction of OPL's indemnification
obligation. If Seller agrees with the purpose of such withdrawal, then Seller
and Buyer shall submit a written notice signed by Seller and Buyer to LeBoeuf or
the Bank, as the case may be, directing LeBoeuf or the Bank, as the case may be,
to release the indemnifiable amount to Buyer. If Seller disputes in good faith
the purpose of such withdrawal, Seller and Buyer shall resolve any dispute
before submitting any written notice to LeBoeuf or the Bank, as the case may be.

         Section 1.6       COMMISSIONS COLLECTED. Notwithstanding anything to
the contrary in SECTION 1.3, all commissions on installments of agency bill
policies actually received by Seller prior to the Effective Date (as defined in
SECTION 2.6) shall be the property of Seller and those actually received by
Seller or Buyer on or after the Effective Date shall be the property of Buyer.
All contingent commissions and/or override commissions received on or after the
Effective Date, regardless of when earned, shall be the property of Buyer. All
additional or return commissions as a result of audits conducted prior to the
Effective Date and actually received from or repaid to insurance carriers before
the Effective Date shall be the property or the responsibility of Seller,
regardless of the effective date of the underlying policy, and those actually
received from or repaid to insurance carriers on or after the Effective Date
shall be the property or responsibility of Buyer, regardless of the effective
date of the underlying policy. Notwithstanding the provisions of SECTION 3.12
and SECTION 6.6 of this Agreement, (a) Seller shall be responsible for and shall
indemnify Buyer for Taxes in respect of commissions that are the property of
Seller in accordance with this SECTION 1.6, and (b) Buyer shall be responsible
for and shall indemnify Seller for Taxes in respect of commissions that are the
property of Buyer in accordance with this SECTION 1.6.


                                       6

<PAGE>

                                   ARTICLE 2.
               CLOSING, ITEMS TO BE DELIVERED, FURTHER ASSURANCES,
                               AND EFFECTIVE DATE

         Section 2.1       CLOSING. The consummation of the purchase and sale
of the Acquired Assets and the assumption of the Assumed Liabilities under this
Agreement (the "Closing") shall take place at 10 a.m., local time, on May 11,
2001 or on such later date upon which the parties may mutually agree (the
"Closing Date") at the offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125
West 55th Street, New York City, New York 10019, unless another location is
agreed to by the parties hereto.

         Section 2.2       CONVEYANCE AND DELIVERY BY SELLER. At the Closing:

                  (a)      Seller shall surrender and deliver possession of the
Acquired Assets to Buyer and take such steps as may be required to put Buyer in
actual possession and operating control of the Acquired Assets, and in addition
shall deliver to Buyer such bills of sale and assignments and other good and
sufficient instruments and documents of conveyance, in form reasonably
satisfactory to Buyer, as shall be necessary and effective to consummate the
transactions specified or contemplated by this Agreement and to transfer and
assign to, and vest in, Buyer all of Seller's right, title, and interest in and
to the Acquired Assets free and clear of any lien, charge, pledge, security
interest, restriction or encumbrance of any kind except as otherwise indicated
in this Agreement; and

                  (b)      Seller shall deliver to Buyer: (i) all keys to each
office site, facility, and equipment transferred to Buyer; (ii) all security and
access codes, if any, applicable to each site, facility, and equipment
transferred to Buyer; and (iii) the Bill of Sale and Assignment, executed by
Seller.

         Section 2.3       ASSUMPTION AND DELIVERY BY BUYER. On the Closing
Date, Buyer shall (a) make the payments described in SECTION 1.4(A)(II), (III)
and (IV), by wire transfer of immediately available funds in United States
currency to the appropriate accounts, and (b) deliver to Seller the Assumption
Agreement, executed by Buyer.

         Section 2.4       MUTUAL PERFORMANCE. At the Closing, the parties shall
also deliver to each other the agreements and other documents referred to in
ARTICLE 5 hereof.

         Section 2.5       FURTHER ASSURANCES. From time to time after the
Closing, at Buyer's request, Seller shall execute, acknowledge and deliver to
Buyer such other instruments of conveyance and transfer and shall take such
other actions and execute and deliver such other documents, certifications and
further assurances as Buyer may reasonably request in order to vest more
effectively in Buyer, or to put Buyer more fully in possession of, any of the
Acquired Assets. Each of the parties hereto shall cooperate with the others and
execute and deliver to the other parties such other instruments and documents
and take such other actions as may be reasonably requested from time to time by
any other party hereto as necessary to consummate the transactions specified or
contemplated by this Agreement and to carry out, evidence and confirm the
intended purposes of this Agreement.


                                       7

<PAGE>

         Section 2.6       EFFECTIVE DATE. The effective date of all documents
and instruments executed at the Closing shall be May 1, 2001 at 12:01 am Central
Daylight Time (the "Effective Date") unless otherwise specified.

                                   ARTICLE 3.
            REPRESENTATIONS AND WARRANTIES OF SELLER, PARENT AND OPL

         Seller, Parent and OPL represent and warrant, jointly and severally, to
Buyer as follows:

         Section 3.1       ORGANIZATION OF SELLER. Seller is a corporation
organized and in good standing under the laws of the State of Delaware. Seller
has all requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted. Seller is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the property owned, leased, or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary.

         Section 3.2       ORGANIZATION OF PARENT AND OPL.

                  (a)      Parent is a corporation organized and in good
standing under the laws of the State of Delaware. Parent has all requisite
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as now being
conducted.

                  (b)      OPL is a corporation organized and in good standing
under the laws of the Islands of Bermuda. OPL has all requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as now being conducted.

         Section 3.3       CAPITALIZATION. Parent owns and holds all of the
outstanding shares of capital stock of Seller and there are no outstanding
options or rights to acquire additional shares of capital stock of Seller.

         Section 3.4       AUTHORITY. Seller, Parent and OPL each have the
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement, and the consummation of the Agreement and the
other transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of Seller, Parent and OPL, including
without limitation the respective boards of directors of Seller, Parent and OPL.
This Agreement has been, and the other agreements, documents and instruments
required to be delivered by Seller, Parent and OPL in accordance with the
provisions hereof (collectively, the "Seller's Documents") shall be, duly
executed and delivered by duly authorized officers of Seller, Parent and OPL on
behalf of Seller, Parent and OPL, respectively, and assuming this Agreement
constitutes a valid and binding obligation of Buyer, this Agreement constitutes,
and the Seller's Documents when executed and delivered shall constitute, legal,
valid and binding obligations of Seller, Parent and OPL, enforceable against
Seller, Parent and OPL in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws from time to time in
effect which offset


                                       8

<PAGE>

creditors' rights generally and general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
in law).

         Section 3.5       CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set
forth in Schedule 3.5, neither the execution, delivery or performance of this
Agreement by Seller and Parent nor the consummation by them of the transactions
contemplated hereby nor compliance by it with any of the provisions hereof shall
(a) conflict with or result in any breach of, any provision of their respective
Certificates of Incorporation or Bylaws (or equivalent charters or
organizational documents), (b) require any filing with, or permit,
authorization, consent or approval of, any federal, state, local, or foreign
court, arbitral tribunal, administrative agency or commission, or other
governmental or other regulatory authority or agency (each a "Governmental
Authority"), or (c) result in a violation or breach of, or constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice or consent under
any of the terms, conditions or provisions of any agreement or other instrument
or obligation to which Seller or Parent is a party or by which Seller or any of
its properties or assets may be bound.

         Section 3.6       NO THIRD PARTY OPTIONS. There are no existing
agreements, options, commitments, or rights with, of or to any person to acquire
any of Seller's assets, properties or rights included in the Acquired Assets or
any interest therein.

         Section 3.7       FINANCIAL STATEMENTS AND OTHER FINANCIAL DATA. The
following financial statements of Seller (collectively, the "Financial
Statements") have been delivered or previously made available to Buyer: (i)
statements of assets, liabilities and equity-income tax basis and the related
statements of revenues, expenses and retained earnings-income tax basis, and the
respective accountants' compilation reports related thereto, as of and for the
fiscal years ended December 31, 2000, December 31, 1999, and December 31, 1998
(the "Most Recent Fiscal Year End") for Seller, and (ii) unaudited statements of
assets, liabilities and equity-income tax basis and the related statements of
revenues, expenses and retained earnings-income tax basis ("Most Recent
Financial Statements") as of and for the three (3) months ended March 31, 2001
(the "Most Recent Fiscal Month End"). The Financial Statements (including the
Notes thereto) have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby, present fairly the financial condition of Seller,
including assets and liabilities (whether accrued, absolute, contingent or
otherwise) as of such dates and the results of operations of Seller for such
periods, are correct and complete, and are consistent with the books and records
of Seller (which books and records are correct and complete); provided, however,
that the Most Recent Financial Statements lack footnotes and other presentation
items. Seller has not guaranteed any premium financing on behalf of its
customers.

         Section 3.8       ORDINARY COURSE OF BUSINESS. Since the Most Recent
Fiscal Month End, Seller has carried on the Business in the usual, regular and
ordinary course in substantially the manner heretofore conducted and has taken
no unusual actions in contemplation of this transaction, except with the consent
of Buyer. Since the Most Recent Fiscal Month End, there have been no events or
changes having an adverse effect on Seller, the Business or the Acquired Assets.
Except as set forth in Schedule 3.8, all of Seller's accounts payable, including
accounts payable to insurance carriers, are current and reflected properly on
its books and records, and


                                       9

<PAGE>

shall be paid in accordance with their terms at their recorded amounts. Other
than as described on Schedule 3.8, and without limiting the generality of the
foregoing, since the Most Recent Fiscal Month End:

                  (a)      Seller has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, other than for a fair consideration
in the ordinary course of business;

                  (b)      Seller has not entered into any agreement, contract,
lease, or license (or series of related agreements, contracts, leases, and
licenses) either involving more than US$5,000.00 or outside the ordinary course
of business;

                  (c)      no party (including Seller) has accelerated,
terminated, modified, or canceled any agreement, contract, lease, or license (or
series of related agreements, contracts, leases, and licenses) involving more
than US$5,000.00 to which Seller is a party or by which it is bound;

                  (d)      Seller has not imposed or granted any mortgage,
pledge, lien, encumbrance, charge or other security interest upon any of its
assets, tangible or intangible;

                  (e)      Seller has not made any capital expenditure (or
series of related capital expenditures) either involving more than US$5,000.00,
or outside the ordinary course of business;

                  (f)      Seller has not made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any other person or
entity (or series of related capital investments, loans, and acquisitions)
either involving more than US$5,000.00, or outside the ordinary course of
business;

                  (g)      Seller has not issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either involving more than
US$5,000.00 singly or US$10,000.00, in the aggregate;

                  (h)      Seller has not delayed or postponed the payment of
accounts payable and other liabilities outside the ordinary course of business;

                  (i)      Seller has not canceled, compromised, waived, or
released any right or claim (or series of related rights and claims) either
involving more than US$5,000.00, or outside the ordinary course of business;

                  (j)      Seller has not granted any license or sublicense of
any rights under or with respect to any patent, trademark, servicemark, logo,
corporate name or computer software;

                  (k)      there has been no change made or authorized in the
charter or bylaws of Seller;

                  (l)      Seller has not issued, sold, or otherwise disposed of
any of its capital stock, or granted any options, warrants, or other rights to
purchase or obtain (including upon conversion, exchange, or exercise) any of its
capital stock;


                                       10

<PAGE>

                  (m)      Seller has not declared, set aside, or paid any
dividend or made any distribution with respect to its capital stock (whether in
cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock;

                  (n)      Seller has not experienced any damage, destruction,
or loss (whether or not covered by insurance) to its property;

                  (o)      Seller has not made any loan to, or entered into any
other transaction with, any of its directors, officers, and employees outside
the ordinary course of business;

                  (p)      Seller has not entered into any employment contract
or collective bargaining agreement, written or oral, or modified the terms of
any existing such contract or agreement;

                  (q)      Seller has not granted any increase in the base
compensation of any of its directors, officers, and employees outside the
ordinary course of business;

                  (r)      Seller has not adopted, amended, modified or
terminated any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees;

                  (s)      Seller has not made any other change in employment
terms for any of its directors, officers, and employees outside the ordinary
course of business;

                  (t)      Seller has not made or pledged to make any charitable
or other capital contribution outside the ordinary course of business; and

                  (u)      Seller has not entered into any agreement to purchase
or acquire any insurance agency business.

         Section 3.9       ASSETS.

                  (a)      Seller owns and holds, free and clear of any lien,
charge, pledge, security interest, restriction, encumbrance or third-party
interest of any kind whatsoever (including insurance company payables), sole and
exclusive right, marketable title and interest in and to the Acquired Assets,
including but not limited to the customer expiration records for those customers
listed in Schedule 1.2(a), together with the exclusive right to use such records
and all customer accounts, copies of insurance policies and contracts in force
and all files, invoices and records pertaining to the customers, their contracts
and insurance policies, and all other information comprising the Purchased Book
of Business. Seller has not received notice that any of the accounts listed in
Schedule 1.2(a) has canceled or non-renewed or intends to cancel or non-renew.
Schedule 1.2(a) also shows the premiums paid to Seller by each customer during
the twelve-month period ended April 30, 2001. None of the accounts shown in
Schedule 1.2(a) represents business that has been brokered through a third
party.

                  (b)      The service marks "Parcel Insurance Plan(R)" and
"PIP(R)" are the only service marks used by Seller within the past three years.
Seller has not received notice of any claims filed during the past three years
against Seller alleging that it has violated, infringed on or otherwise
improperly used the Intellectual Property rights of a third party, or, if so,
the claim has been settled,


                                       11

<PAGE>

withdrawn or abandoned with no existing liability to Seller and, to the
Knowledge (as defined in SECTION 7.2 hereof) of Seller and Parent, Seller has
not violated or infringed any trademark, trade name, service mark, service name,
patent, copyright or trade secret held by others.

                  (c)      Schedule 3.9(c) lists all material contracts,
agreements and other written or verbal arrangements to which Seller is a party,
including, but not limited to:

                           (i)      any agreement (or group of related
agreements) for the lease of personal property to or from any person or entity
providing for lease payments in excess of US$10,000.00 per annum;

                           (ii)     any agreement (or group of related
agreements) for the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt of
services, the performance of which shall extend over a period of more than one
(1) year, result in a loss to Seller, or involve consideration in excess of
US$10,000.00;

                           (iii)    any agreement concerning a partnership or
joint venture;

                           (iv)     any agreement (or group of related
agreements) under which it has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation, in excess
of US$10,000.00 or under which it has imposed a security interest on any of its
assets, tangible or intangible;

                           (v)      any employment, confidentiality,
nonsolicitation or noncompetition agreement;

                           (vi)     any agreement involving Parent or any of
Parent's affiliates (other than Seller);

                           (vii)    any collective bargaining agreement;

                           (viii)   any agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis providing
annual compensation in excess of US$50,000.00 or providing severance benefits in
excess of US$50,000.00;

                           (ix)     any agreement under which Seller has
advanced or loaned any amount to any of its directors, officers, and employees
outside the ordinary course of business;

                           (x)      any agreement under which the consequences
of a default or termination could have a adverse effect on the Business,
financial condition, operations, results of operations, or future prospects of
Seller; or

                           (xi)     any other written arrangement (or group of
related arrangements) either involving more than US$10,000.00 or not entered
into in the ordinary course of business.

Seller has delivered or made available to Buyer true and complete copies of each
such agreement, and, in the case of unwritten agreements, a true and complete
summary of such arrangements. Seller is in compliance with the terms thereof.
With respect to each such


                                       12

<PAGE>

agreement listed in Schedule 3.9(c), to the Knowledge of Seller: (A) the
agreement is legal, valid, binding, enforceable, and in full force and effect;
(B) the agreement shall continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms following the consummation of the
transactions contemplated hereby, and no event has occurred that with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (C) no party has
repudiated any provision of the agreement.

                  (d)      The computer software currently being used by Seller
in connection with the Business performs in accordance with the documentation,
and other written material used in connection therewith is substantially free of
defects in programming and operation as needed in the operation of the Business.
Seller has delivered or previously made available to Buyer complete and correct
copies of all user and technical documentation in their possession related to
such software.

                  (e)      Seller owns or leases all buildings, equipment, and
other assets necessary for the conduct of the Business as presently conducted.
All such assets are included within the Acquired Assets. Each such asset is free
from defects (patent and latent), has been maintained in accordance with normal
industry practice, is in good operating condition and repair (subject to normal
wear and tear), and is suitable for the purposes for which it presently is used
and presently is proposed to be used.

         Section 3.10      LITIGATION AND CLAIMS; SOLVENCY. Except as disclosed
in Schedule 3.10, there is no suit, claim, action, proceeding or investigation
pending or, to the Knowledge of Seller, threatened against Seller before any
Governmental Authority that would have a material adverse effect on (i) the
ability of Seller to timely perform its obligations under this Agreement or any
Seller's Document or to consummate the transactions contemplated hereby or
thereby, or (ii) the Business or financial condition, results of operations or
assets of Seller (a "Material Adverse Effect") or that would prevent Seller from
consummating the transactions contemplated by this Agreement. Seller is not
subject to any outstanding order, writ, injunction or decree which, insofar as
can be reasonably foreseen, individually or in the aggregate, in the future
would have a Material Adverse Effect or would prevent Seller from consummating
the transactions contemplated hereby. No voluntary or involuntary petition in
bankruptcy, receivership, insolvency or reorganization with respect to Seller,
or petition to appoint a receiver or trustee of Seller's property, has been
filed by or against Seller, nor shall Seller file such a petition prior to the
Closing Date or for one hundred (100) days thereafter, and if such petition is
filed by others, the same shall be promptly discharged. Seller has not made any
assignment for the benefit of creditors or admitted in writing insolvency or
that its property at fair valuation shall not be sufficient to pay its debts,
nor shall Seller permit any judgment, execution, attachment or levy against it
or its properties to remain outstanding or unsatisfied for more than ten (10)
days. Seller shall not become insolvent as a result of consummating the
transactions contemplated by this Agreement.

         Section 3.11      COMPLIANCE WITH APPLICABLE LAW. Except as set forth
in Schedule 3.11, Seller holds all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Authorities necessary for the lawful
conduct of the Business (collectively, the "Permits"), and Seller is in
compliance with the terms of the Permits except where the failure to hold any
such Permit or where noncompliance with such Permits would not have a Material


                                       13

<PAGE>

Adverse Effect. Seller is not in violation of any law, ordinance or regulation
of any Governmental Authority including without limitation any law, ordinance or
regulation relating to any of Seller's employment practices. As of the date of
this Agreement, no investigation or review by any Governmental Authority with
respect to Seller is pending or, to the Knowledge of Seller and Parent,
threatened.

         Section 3.12      TAX MATTERS. Seller has no liability or obligation
in respect of Taxes (as defined in SECTION 6.6) for which Buyer may become
liable or to which the Acquired Assets may become subject.

         Section 3.13      NON-SOLICITATION COVENANTS. Neither Seller nor
Parent is a party to any agreement that restricts Seller's or Parent's ability
to compete in the insurance agency industry or solicit specific insurance
accounts.

         Section 3.14      ERRORS AND OMISSIONS. Seller has not incurred any
liability or taken or failed to take any action that may reasonably be expected
to result in a liability for errors or omissions in the conduct of the Business,
except such liabilities as are fully covered by insurance (other than
deductibles). All errors and omissions (E&O) claims currently pending or
threatened against Seller are set forth in Schedule 3.10. Seller has E&O
insurance coverage in force, with minimum liability limits of $3 million per
claim and $3 million aggregate, and a deductible of $10,000 per claim, and shall
provide to Buyer evidence of such E&O coverage prior to or on the Closing Date.

         Section 3.15      ENVIRONMENTAL AND PUBLIC SAFETY COMPLIANCE. Seller
and its predecessors entities and affiliates have complied with all laws
(including rules and regulations thereunder) of any Government Authority
concerning the environment, public health and safety, and employee health and
safety except where noncompliance would not have a Material Adverse Effect, and
no charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand or notice has been filed or commenced against Seller or its predecessor
entities or affiliates alleging any failure to comply with any such law, rule or
regulation. Neither Seller nor its predecessor entities or affiliates has
received any notification from any Governmental Authority that it allegedly was
a contributor to or a potentially responsible party in connection with, any
place a which Hazardous Material was stored, treated, released or disposed. The
term "Hazardous Materials" means any "toxic substance" as defined in 15 U.S.C.
ss.ss. 2601 et seq. on the date hereof, including materials designated on the
date hereof as "hazardous substances" under 42 U.S.C. ss.ss.9601 et seq. or
other applicable laws, and toxic, radioactive, caustic, or otherwise hazardous
substances, including petroleum and its derivatives, asbestos, PCBs,
formaldehyde, chlordane and heptachlor.

         Section 3.16       POWERS OF ATTORNEY. There are no outstanding powers
of attorney executed on behalf of Seller.

         Section 3.17      INSURANCE. Schedule 3.17 sets forth the following
information with respect to each insurance policy (including policies providing
property, casualty, liability, and workers' compensation coverage and bond and
surety arrangements, and that policy described in SECTION 3.14 hereof) to which
Seller has been a party, a named insured, or otherwise the beneficiary of
coverage at any time within the past three (3) years:


                                       14

<PAGE>

                  (a)      the name, address, and telephone number of the agent;

                  (b)      the name of the insurer, the name of the
policyholder, and the name of each covered insured;

                  (c)      the policy number and the period of coverage;

                  (d)      the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount (including
a description of how deductibles and ceilings are calculated and operate) of
coverage; and

                  (e)      a description of any retroactive premium adjustments
or other loss-sharing arrangements.

With respect to each such insurance policy, to the Knowledge of Seller: (i) the
policy is legal, valid, binding, enforceable, and in full force and effect; (ii)
the policy shall continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby (including the assignments and assumptions
referred to in ARTICLE 1 hereof); (iii) neither Seller nor any other party to
the policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (iv) no party
to the policy has repudiated any provision thereof.

         Section 3.18      LABOR MATTERS. Seller is not a party to or bound by
any collective bargaining agreement, nor has it experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes. To the Knowledge of Seller, Seller has not committed any unfair labor
practice. Neither Seller, Parent nor the directors and officers (and employees
with responsibility for employment matters) of Seller or Parent has any
Knowledge of any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of Seller.

         Section 3.19      EMPLOYEE BENEFIT PLANS. Schedule 3.19 lists each
Employee Benefit Plan (as defined below) that Seller maintains or to which
Seller contributes.

                  (a)      Seller's group health plan, which includes Seller's
flexible spending account plan (collectively, the "Group Health Plans"),
complies in form and in operation in all material respects with the applicable
requirements of ERISA (as defined below), the Code, and other applicable laws.
No such Employee Benefit Plan is under audit by the United States Internal
Revenue Service or the United States Department of Labor, or any foreign
governmental agencies performing similar functions.

                  (b)      All required reports and descriptions (including Form
5500 Annual Reports and summary plan descriptions) have been filed or
distributed appropriately with respect to the Group Health Plans. The
requirements of Part 6 of Subtitle B of Title I of ERISA and of Code Section
4980B have been met with respect to the Group Health Plans.


                                       15

<PAGE>


                  (c)      All premiums or other payments for all periods ending
on or before the Closing Date have been paid with respect to the Group Health
Plans.

                  (d)      Seller has delivered (or no later than sixty (60)
days prior to the Closing Date shall deliver) to Buyer correct and complete
copies of the plan documents and summary plan descriptions, the most recent Form
5500 Annual Report, and all related trust agreements, insurance contracts, and
other funding agreements that implement the Group Health Plans.

                  (e)      Seller does not contribute to, nor has ever been
required to contribute to, any Multiemployer Plan (as such term is defined in
ERISA Section 3(37)) or has any liability (including withdrawal liability) under
any Multiemployer Plan.

                  (f)      Seller does not maintain or contribute, nor has ever
maintained or contributed, or has ever been required to contribute to any
Employee Welfare Benefit Plan (as such term is defined in ERISA Section 3(1)
providing medical, health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Section 4980B).

                  (g)      Except as provided in SECTION 5.11(C) and (D), Buyer
shall have no obligations or liability with respect to any Employee Benefit Plan
after the Closing Date.

As used in this Agreement, the term "Employee Benefit Plan" means any (a)
Employee Pension Benefit Plan, as such term is defined in ERISA Section 3(2),
(b) Employee Welfare Benefit Plan, as such term is defined in ERISA Section
3(1), or (c) material fringe benefit plan or program, which covers or provides
benefits to any Seller employee.

As used in this Agreement, the term "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.

         Section 3.20      UNDISCLOSED LIABILITIES. Except where such liability
would not have a Material Adverse Effect, Seller has no liability (and there is
no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against it giving rise to any
liability), except for (a) liabilities set forth on the face of the balance
sheet (rather than in any notes thereto) included in the Most Recent Financial
Statements and (b) liabilities that have arisen after the Most Recent Fiscal
Month End in the ordinary course of business (none of which results from, arises
out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law).

         Section 3.21      INTELLECTUAL PROPERTY.

                  (a)      Seller owns or has the right to use pursuant to
license, sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the Purchased Book of Business as presently
conducted, except where the failure to own, or have the right to use, such
Intellectual Property would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. Each item of Listed Intellectual
Property owned or used by Seller immediately prior to the Closing hereunder
shall be owned or available for use by Buyer on terms and conditions
substantially similar to those applicable immediately subsequent to the Closing
hereunder. "Listed Intellectual Property" shall mean those items listed in
Schedule 3.21(c) and


                                       16

<PAGE>

3.21(d) (except for computer software that is commercially available to the
general public and readily replaceable).

                  (b)      To Seller's Knowledge, Seller has not interfered
with, infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and neither Seller nor Parent has
received any written notice or complaint (other than notices or complaints that
have been resolved, withdrawn or abandoned) alleging any such interference,
infringement, misappropriation, or violation (including any claim that Seller
must license or refrain from using any Intellectual Property rights of any third
party). To the Knowledge of Seller, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of Seller.

                  (c)      Seller has no patents issued in its name, or patent
applications filed or pending. Schedule 3.21(c) identifies each license or other
agreement to which Seller is a party and pursuant to which Seller has granted to
any third party the right to use any of its Intellectual Property. Seller has
delivered to Buyer correct and complete copies of all such licenses and other
agreements (as amended to date). Schedule 3.21(c) also identifies (1) each trade
name and registered or unregistered trademark and service mark currently used by
Seller in the Business and (2) each copyright registration owned by Seller. With
respect to each item of Intellectual Property required to be identified in
Schedule 3.21(c):

                           (i)      Seller possesses all right, title, and
interest in and to the item, free and clear of any security interest, license,
or other restriction;

                           (ii)     The item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;

                           (iii)    No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
Knowledge of Seller, threatened, that challenges the legality, validity,
enforceability, use, or ownership of the item; and

                           (iv)     Seller has not granted any sublicense or
similar right with respect to the license, sublicense, agreement, or permission.

                  (d)      Schedule 3.21(d) identifies each license, sublicense,
or other agreement to which Seller is a party and pursuant to which Seller is
authorized to use Intellectual Property that any third party owns. Seller has
delivered to Buyer correct and complete copies of all such licenses,
sublicenses, or other agreements, (as amended to date). With respect to each
license, sublicense or agreement identified in Schedule 3.21(d):

                           (i)      the license, sublicense, agreement, or
permission covering the item is legal, valid, binding, enforceable, and in full
force and effect;

                           (ii)     the license, sublicense, agreement, or
permission shall continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated hereby (including the assignments and assumptions
referred to in ARTICLE 2 above);


                                       17

<PAGE>

                           (iii)    to Seller's Knowledge, no party to the
license, sublicense, agreement, or permission is in breach or default, and no
event has occurred that with notice or default or permit termination,
modification, or acceleration thereunder;

                           (iv)     no party to the license, sublicense,
agreement, or permission has provided notice of repudiation of any provision
thereof;

                           (v)      to the Knowledge of Seller, the underlying
item of Intellectual Property is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;

                           (vi)     no action, suit, proceeding, hearing,
investigation, or complaint is pending against Seller or, to the Knowledge of
Seller, is threatened, that challenges the legality, validity, or enforceability
of the underlying item of Intellectual Property; and

                           (vii)    Seller is not a party to any sublicense
pursuant to which Seller has granted rights to the license, sublicense, or
agreement.

         Section 3.22      SUBSIDIARIES. Seller does not have and has never had
any subsidiaries.

         Section 3.23      NO MISREPRESENTATIONS. None of the representations
and warranties of Seller and Parent set forth in this Agreement, notwithstanding
any investigation thereof by Buyer, contains any untrue statement of a material
fact, or omits the statement of any material fact necessary to render the
statements made not materially misleading.

                                   ARTICLE 4.
                     BUYER'S REPRESENTATIONS AND WARRANTIES

         Buyer represents and warrants to Seller and Parent as follows:

         Section 4.1       ORGANIZATION. Buyer is a corporation organized and
in good standing under the laws of Missouri, and its status is active. Buyer has
all requisite corporate power and authority and all necessary governmental
approvals to own, lease, and operate its properties and to carry on its business
as now being conducted and as proposed to be conducted.

         Section 4.2       AUTHORITY. Buyer has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and performance of
this Agreement, and the consummation of the Agreement and the other transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of Buyer, including without limitation the board of directors of
Buyer. This Agreement has been, and the other agreements, documents and
instruments required to be delivered by Buyer in accordance with the provisions
hereof (collectively, the "Buyer's Documents") shall be, duly executed and
delivered by duly authorized officers of Buyer, and, assuming this Agreement
constitutes a valid and binding obligation of Seller, constitutes, and the
Buyer's Documents when executed and delivered shall constitute, valid and
binding obligations of Buyer, enforceable against it in accordance with their
terms, subject to applicable bankruptcy, insolvency, reorganization or similar
laws from time to time in effect which offset creditors' rights generally and
general equitable principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or in law).


                                       18

<PAGE>

         Section 4.3       CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the
execution, delivery, or performance of this Agreement by Buyer nor the
consummation by Buyer of the transactions contemplated hereby nor compliance by
Buyer with any of the provisions hereof shall (a) conflict with or result in any
breach of any provision of the Articles of Incorporation or the Bylaws of Buyer,
(b) require any filing with, or permit, authorization, consent, or approval of,
any Governmental Authority (except for necessary reports and other filings with
the Securities and Exchange Commission (the "SEC") and the New York Stock
Exchange), (c) result in a violation or breach of, or constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or, except in connection with (i) the
loan facilities of Buyer's parent company, Brown & Brown, Inc., with SunTrust
Bank and Continental Casualty Company, respectively, or (ii) the insurance
carriers for certain of Buyer's insurance policies, require any notice or
consent any of the terms, conditions, or provisions of any agreement or other
instrument or obligation to which Buyer is a party or by which Buyer or any of
its properties or assets may be bound.

         Section 4.4       LITIGATION. There is no suit, claim, action,
proceeding, or investigation pending or, to the Knowledge of Buyer, threatened
against Buyer or its affiliates before any Governmental Authority that would
have a material adverse effect on Buyer or would prevent Buyer from consummating
the transactions contemplated by this Agreement. Buyer is not subject to any
outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen, individually or in the aggregate, in the future would have
a material adverse effect on Buyer or would prevent Buyer from consummating the
transactions contemplated hereby. No voluntary or involuntary petition in
bankruptcy, receivership, insolvency or reorganization with respect to Buyer, or
petition to appoint a receiver or trustee of Buyer's property, has been filed by
or against Buyer, nor shall Buyer file such a petition prior to the Closing Date
or for one hundred (100) days thereafter, and if such petition is filed by
others, the same shall be promptly discharged. Buyer has not made any assignment
for the benefit of creditors or admitted in writing insolvency or that its
property at fair valuation shall not be sufficient to pay its debts, nor shall
Buyer permit any judgment, execution, attachment or levy against it or its
properties to remain outstanding or unsatisfied for more than ten (10) days.

         Section 4.5       COMPLIANCE WITH APPLICABLE LAW. Buyer holds all
permits, licenses, variances, exemptions, orders, and approvals of all
Governmental Authorities necessary for the lawful conduct of its insurance
agency business and the Purchased Book of Business. Buyer is not in violation of
any law, ordinance or regulation of any Governmental Authority, including,
without limitation, any law, ordinance or regulation relating to any of Buyer's
employment practices except where a failure to comply would not have a material
adverse effect on Buyer. As of the date of this Agreement, no investigation or
review by any Governmental Authority with respect to Buyer is pending or, to the
Knowledge of Buyer, threatened.

         Section 4.6       CONTRACTS WITH THIRD PARTIES. Buyer and its
affiliates have no contract, agreement or understanding with any third party
concerning a potential sale of the Acquired Assets or the Business, or any
portion of either, following the Closing.

         Section 4.7       FINANCIAL ABILITY. Buyer has adequate financial
resources and capability to consummate the transactions contemplated by this
Agreement and to honor its obligations


                                       19

<PAGE>

hereunder. Buyer will not become insolvent as a result of consummating the
transactions contemplated by this Agreement.

         Section 4.8       NO MISREPRESENTATIONS. None of the representations
and warranties of Buyer set forth in this Agreement, notwithstanding any
investigation thereof by Seller, contains any untrue statement of a material
fact, or omits the statement of any material fact necessary to render the
statements made not materially misleading.

                                   ARTICLE 5.
                              ADDITIONAL AGREEMENTS

         Section 5.1       BROKERS OR FINDERS. Each of the parties represents,
as to itself, its subsidiaries and its affiliates, that no agent, broker,
investment banker, financial advisor, or other firm or person is or shall be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement, and
each of the parties agrees to indemnify and hold the others harmless from and
against any and all claims, liabilities, or obligations with respect to any
fees, commissions, or expenses asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliate.

         Section 5.2       NON-COMPETITION COVENANTS. Given the national nature
of the Business, OPL agrees that, for a period of five (5) years beginning on
the Closing Date, OPL shall not directly or indirectly (including, without
limitation, through Seller and/or Parent or any successor entity thereof) engage
in, or be or become the owner of a direct or indirect equity interest in, or
otherwise consult with, be employed by, or participate in the business of, any
entity (other than Buyer) engaged as a managing general agency (MGA) in the
Small Package Insurance agency business with respect to customers whose
shipments originate from within the United States (including its territories,
commonwealths and dependencies). Without limiting the foregoing, OPL shall not,
during such five-year period, (a) solicit, divert, accept business from, nor
service, directly or indirectly, as insurance solicitor, insurance agent,
insurance broker or otherwise, for his account or the account of any other
agent, broker, or insurer, either as owner, shareholder, promoter, employee,
consultant, manager or otherwise, any account that is part of the Purchased Book
of Business or any insurance account then serviced by Buyer, or (b) directly or
indirectly hire or solicit any employees of Buyer or its affiliates (other than
Charles D. Smith) to work for OPL or any of its affiliates, or any company that
competes with Buyer or its affiliates.

         Section 5.3       REMEDY FOR BREACH OF COVENANTS. In the event of a
breach of the provisions of SECTION 5.2, Buyer shall be entitled to injunctive
relief as well as any other applicable remedies at law or in equity. Should a
court of competent jurisdiction declare any of the covenants set forth in
SECTION 5.2 unenforceable due to a unreasonable restriction, duration,
geographical area or otherwise, the parties agree that such court shall be
empowered and shall grant Buyer or its affiliates injunctive relief to the
extent reasonably necessary to protect their respective interests. Seller,
Parent and OPL each acknowledge that the covenants set forth in SECTION 5.2
represent an important element of the value of the Acquired Assets and were a
material inducement for Buyer to enter into this Agreement.


                                       20

<PAGE>

         Section 5.4       SUCCESSOR RIGHTS. The covenants contained in SECTION
5.2 shall inure to the benefit of any successor in interest of Buyer by way of
merger, consolidation, sale or other succession.

         Section 5.5       ERRORS AND OMISSIONS TAIL COVERAGE. Seller shall
purchase and pay in full for a tail coverage extension on its E&O insurance
policy. Such coverage shall extend for a period of at least three (3) years from
the Closing Date, shall have per claim and aggregate coverages and deductibles
consistent with the coverages and deductibles currently maintained by Seller,
and shall otherwise be in form and substance reasonably acceptable to Buyer.
Seller shall take all reasonable steps to secure such coverage and shall deliver
to Buyer evidence of such coverage as soon as practicable after the Closing
Date.

         Section 5.6       EXPENSES. Each of Buyer, Seller, Parent and OPL
shall bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby. Seller, Parent and OPL each agree that Buyer shall not bear Seller's,
Parent's or OPL's costs or expenses (including any of their legal fees and
expenses) in connection with this Agreement or any of the transactions
contemplated hereby. Seller also agrees that it has not paid any amount to any
third party, and shall not pay any amount to any third party until after the
Closing, with respect to any of the costs and expenses of Seller, Parent and OPL
(including any of their legal fees and expenses) in connection with this
Agreement or any of the transactions contemplated hereby. Sales, transfer,
documentary and similar taxes, fees and assessments, if any, payable in
connection with the sale, conveyance, assignment, transfers and deliveries made
to Buyer in connection herewith shall be paid by Seller.

         Section 5.7       CONFIDENTIALITY.

                           (a)      Buyer, Seller, Parent and OPL shall consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any press release, filing with the SEC or other public
statements with respect to the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation and the receipt of the approval of the other party, except as may
be required by applicable law, by court process or by obligations pursuant to
any listing agreement with any national securities exchange.

                           (b)      Seller, Parent and OPL shall each treat
confidential and hold as such all of the information concerning the Business and
affairs of the Seller prior to Closing or Buyer subsequent to the Closing that
is not already generally available to the public ("Confidential Information");
provided, however, that Seller, Parent and OPL shall be permitted to use the
Confidential Information in connection with the defense against any legal
proceeding, claim, complaint or investigation involving Seller, Parent or OPL;
provided, further, that Seller, Parent and OPL shall use reasonable best efforts
to retain the confidentiality of such information used in any such defense. If
Seller or Parent is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, Seller (on behalf of itself or Parent, as the case may be) shall
notify Buyer promptly of the request or requirement so that Buyer may seek an
appropriate protective order or waive compliance with the provisions of this
SECTION 5.7. If, in the absence of a protective order or the receipt of a waiver
hereunder, Seller, Parent or OPL is, on the advice of counsel, compelled to
disclose any Confidential Information to


                                       21

<PAGE>


any tribunal or else stand liable for contempt, Seller, Parent or OPL, as the
case may be, may disclose the Confidential Information to the tribunal solely in
connection with such matter; provided, however, that Seller, Parent or OPL, as
the case may be, shall use its best efforts to obtain, at the request of Buyer,
an order or other assurance that confidential treatment shall be accorded to
such portion of the Confidential Information required to be disclosed as Buyer
shall designate.

         Section 5.8       ENFORCEMENT OF EMPLOYMENT AGREEMENTS. After the
Closing, and at Buyer's request, Seller shall (a) take all reasonable measures
to enforce the terms of those non-compete/non-solicitation agreements with its
existing employees that either have not been or cannot be assigned to Buyer,
including pursuing legal and injunctive proceedings, and (b) cooperate with
Buyer in enforcing the terms of those contracts assigned to Buyer and shall join
in any legal or injunctive proceedings instituted by Buyer for such purpose.
Buyer shall bear the costs and fees of any such proceedings.

         Section 5.9       CORPORATE NAME; DISSOLUTION OF SELLER AND/OR PARENT.

                  (a)      Promptly after the Closing, Seller agrees to cease
all use of the corporate name "Parcel Insurance Plan, Inc." or the service marks
"Parcel Insurance Plan(R)", "PIP(R)", or any derivative thereof and shall, no
later than five (5) business days after the Closing, file an amendment to its
Certificate of Incorporation with the Delaware Secretary of State, changing its
corporate name to a new corporate name that bears no resemblance to its current
corporate name.

                  (b)      Buyer acknowledges and agrees that at any time after
the Closing Date, Seller and/or Parent may voluntarily dissolve pursuant to
Section 275 of the Delaware General Corporation Law. Within 15 business days
after the filing of a certificate of dissolution with the Secretary of State of
the State of Delaware, Buyer shall be provided with written notice of any such
dissolution. Upon any such dissolution, OPL shall succeed to the rights and
obligations hereunder of the dissolved party.

         Section 5.10      TERMINATION OF EMPLOYEE BENEFIT PLANS. At the
Closing, Seller shall deliver to Buyer copies of duly adopted resolutions of
Seller's Board of Directors (a) terminating Seller's Employee Benefits Plans
(other than the Group Health Plans), with such termination effective prior to
the Closing Date, (b) providing that no contributions shall be made to Seller's
401(k) Plan after such date, and (c) directing Seller's or Parent's legal
counsel to apply for a determination letter from the Internal Revenue Service
with respect to the termination of the 401(k) Plan and to submit a notice of
intent to terminate to all interested parties under the 401(k) Plan.

         Section 5.11      EMPLOYEES OF SELLER. (a) (a) Prior to the Closing
Date, Buyer shall make offers of employment to all Seller employees listed in
Schedule 5.11 (the "Transferred Employees"). Such offers of employment shall be
at compensation levels which are, in the aggregate, economically similar to the
compensation levels which Transferred Employees enjoyed as employees of Seller.
Additionally, such Transferred Employees shall be entitled to the same benefits
as conferred upon any other employees of comparable rank of Buyer. Buyer agrees
to provide to the Transferred Employees who become employees of Buyer credit for
service under the existing employee benefit plans in which employees of Buyer
are participants (the "Existing Plans"), to the extent permissible under the
Existing Plans and to the extent that such Transferred Employees are otherwise
eligible to


                                       22

<PAGE>
participate, as employees of Buyer, in the Existing Plans, for the purposes of
participation, vesting and accrual of benefits; provided, however, that no
credit for service for purposes of participation, vesting or accrual of benefits
under the Existing Plans will be awarded to any such Transferred Employees under
any Existing Plan with respect to any period that is prior to the earliest date
that any of Buyer's existing employees have received credit for purposes of
participation, vesting or accrual of benefits under such Existing Plan. Buyer
further agrees that, to the extent possible, it will waive any "pre-existing
condition" exclusion or waiting periods that may limit any such Transferred
Employee's qualification for coverage under Buyer's standard and customary
health benefits and will credit all co-payments and deductions paid by the
Transferred Employees under Seller's plan prior to the Closing toward any
applicable deductible out-of-pocket requirements. Buyer shall maintain such
compensation and benefit levels for a period of at least one (1) year after the
Closing Date for those Transferred Employees who remain employed with Buyer.

                  (b)      On and after the Effective Date, Buyer agrees to
assume responsibility for any and all liabilities and obligations of Seller
which have arisen or may arise in connection with the employment of the
Transferred Employees. Without limiting the foregoing, Buyer agrees that such
liabilities shall include, but not be limited to: the timely payment of all
payroll expenses, the timely withholding, payment and/or deposit of any
applicable income or employment taxes, and the timely payment of any required
contributions to any Employee Benefit Plan of Seller. Each of the foregoing
liabilities are among the Assumed Liabilities as defined in SECTION 1.4(D)(I)
hereof.

                  (c)      Buyer agrees to assume responsibility for providing
the appropriate COBRA notices and for providing COBRA continuation coverage to
all "M&A qualified beneficiaries" as such term is defined in Treas.
Reg. ss. 54.4980B-9. For purposes of this Agreement, COBRA means health
continuation obligations under ss. 4980B of the Code.

                  (d)      Subject to SECTION 6.6 hereof, on and after the
Closing Date, Buyer agrees to assume responsibility for Seller's Group Health
Plans, until such time as those Transferred Employees who participate in such
Group Health Plans become enrolled to participate in Buyer's group health plan
(including Buyer's flexible spending account plan).

                  (e)      Nothing contained in this Agreement, expressed or
implied, is intended to confer any rights, obligations, liabilities, or remedies
on behalf of any Transferred Employee or their respective beneficiaries,
dependents or successors.

         Section 5.12      NOTICES AND CONSENTS. Seller shall give any notices
to third parties, and Seller shall use its reasonable best efforts to obtain any
third party consents, that Buyer may request in connection with the matters
referred to in Schedule 3.5. Seller and Buyer shall give any notices to, make
any filings with, and use their reasonable best efforts and cooperate with one
another to obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in SECTION 3.5
above.

         Section 5.13      CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of each party to effect the transactions contemplated by this
Agreement to take place on the Closing Date shall be subject to the satisfaction
prior to or on the Closing Date of the following conditions, any of which may be
waived by a party with respect to its own obligation to close:


                                       23

<PAGE>

                  (a)      Approvals. All authorizations, consents, orders, or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Authority, the failure to obtain which would have a
Material Adverse Effect, shall have been filed, occurred, or been obtained.

                  (b)      No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction, or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
shall be in effect (i) preventing the consummation of the transaction, (ii)
causing any of the transactions contemplated by this Agreement to be rescinded
following consummation, (iii) affecting adversely the right of Buyer to own the
Acquired Assets or to operate the Business, or (iv) affecting adversely the
Business, assets, properties, operation (financial or otherwise), or prospects
of Buyer with respect to its ownership of the Acquired Assets or operation of
its business as a result of such acquisition; provided, however, that the party
invoking this provision shall use its best efforts to have any such restraint
removed.

                  (c)      Third Party Consents. All required third-party
consents shall have been obtained, including without limitation the consents
listed in Schedule 3.5.

         Section 5.14      CONDITIONS TO OBLIGATIONS OF BUYER. The obligation
of Buyer to effect the transactions contemplated by this Agreement to occur on
the Closing Date is subject to the satisfaction of the following conditions,
unless waived by Buyer:

                  (a)      Representations and Warranties. The representations
and warranties of the Seller, Parent and OPL set forth in this Agreement shall
be true and correct in all material respects as of the Closing Date.

                  (b)      Performance of Obligations by Seller, Parent, and
OPL. Seller, Parent and OPL shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to
the Closing Date including, without limitation, the satisfaction and release of
any liens, judgments, or other encumbrances upon any of the Acquired Assets.

                  (c)      Seller, Parent and OPL Certificates. An officer of
each of Seller, Parent and OPL shall have delivered to Buyer a certificate to
the effect that each of the conditions specified in SECTIONS 5.13(A), (B) and
(C), and SECTIONS 5.14(A) and (B) is satisfied in all respects.

                  (d)      Evidence of E&O Coverage. Buyer shall have received
from Seller evidence of E&O coverage required in SECTION 5.5.

                  (e)      Termination of Seller Employee Benefit Plans. Buyer
shall have received from Seller copies of duly adopted resolutions of Seller's
Board of Directors as described in SECTION 5.10.

                  (f)      Charles Smith Non-Solicitation and Confidentiality
Agreement. Buyer and Charles D. Smith, a member of the Board of Directors of,
and President, Treasurer and Assistant Secretary of Seller, shall have executed
and delivered a mutually agreeable Non-Solicitation and Confidentiality
Agreement.


                                       24

<PAGE>

                  (g)      Non-Disclosure and Non-Piracy Agreement. Daniel K.
Daly shall have executed and delivered to Buyer a copy of Buyer's standard
employment agreement, which contains confidentiality and non-solicitation
provisions.

                  (h)      Completion of All Actions to be Taken by Seller,
Parent and OPL. All actions to be taken by Seller, Parent and OPL in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
Buyer.

                  (i)      Adverse Changes. There shall have been no material
adverse change to the business or financial condition of the Seller since the
Most Recent Fiscal Month End.

         Section 5.15      CONDITIONS TO OBLIGATION OF SELLER, PARENT AND OPL.
The obligations of Seller, Parent and OPL to effect the transactions
contemplated by this Agreement to occur on the Closing Date are subject to the
satisfaction of the following conditions, unless waived by Seller, Parent or
OPL:

                  (a)      Representations and Warranties. The representations
and warranties of Buyer set forth in this Agreement shall be true and correct in
all material respects as of the Closing Date.

                  (b)      Performance of Obligations by Buyer. Buyer shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.

                  (c)      Buyer's Closing Certificate. An officer of Buyer
shall have delivered to Seller a certificate to the effect that each of the
conditions specified in SECTIONS 5.13(A), (B) and (C) and SECTIONS 5.15(A) and
(B) are satisfied.

                  (d)      Completion of All Actions Taken by Buyer. All actions
to be taken by Buyer in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments and other
documents required to effect the transactions contemplated hereby shall be
reasonably satisfactory in form and substance to Seller.

         Section 5.16      ADDITIONAL POST-CLOSING COVENANTS. The parties agree
as follows with respect to the period following the Closing:

                  (a)      General. Seller acknowledges and agrees that from and
after the Closing, Buyer shall be entitled to possession of all documents,
books, records, agreements and financial data of any sort, whether in paper,
electronic, digital or other format, relating to the Acquired Assets; provided,
however, that for a period of 30 days following the Closing Date, Buyer shall
provide to Seller, Parent and OPL and cause its affiliates to provide to Seller,
Parent and OPL the reasonable opportunity to investigate, access, examine and
copy such documents, books, records, agreements and financial data, whether in
paper, electronic, digital or other format, including such documents, books,
records, agreements and financial data transferred to Buyer pursuant to the
Assumption Agreement. Any such investigation, access and examination shall be
conducted during the regular business hours upon reasonable prior notice (but in
any event, not less than two (2) business days


                                       25

<PAGE>

prior to such investigation, access or examination) and under other reasonable
circumstances, and Seller, Parent, OPL and Buyer and their respective employees,
agents and representatives, including their respective counsel and independent
public accountants, shall cooperate in a reasonable manner and as reasonably
requested with the employees and representatives of each party and its
affiliates in connection with such investigation, access and examination.

                  (b)      Litigation Support. If and for so long as any party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Acquired Assets, the other party shall
cooperate with the contesting or defending party and its counsel in the contest
or defense, make available its personnel, preserve documents and provide such
testimony and access to its books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending party (unless the contesting or defending party is
entitled to indemnification therefor under ARTICLE 6 hereof).

                  (c)      Transition. Seller shall not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, insurance carrier, or other business associate of Seller
from maintaining the same business relationships with Buyer after the Closing as
it maintained with Seller prior to the Closing. Seller shall refer all customer
inquiries relating to the Business to Buyer from and after the Closing.

         Section 5.17      CONSENTS TO ASSIGNMENT.

                  (a)      Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
contract, lease, license or agreement of any claim or right or any benefit
arising thereunder or resulting therefrom if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach thereof.

                  (b)      If any such consent is not obtained prior to the
Closing, Seller, Parent, OPL and Buyer shall cooperate (at their own expense) in
any lawful and reasonable arrangement under which Buyer shall obtain the
economic claims, rights and benefits under the asset, claim or right with
respect to which the consent has not been obtained in accordance with this
Agreement, including subcontracting, sublicensing or subleasing to Buyer and
enforcement of any and all rights of Seller against the other party thereto
arising out of a breach or cancellation thereof by the other party.

                                   ARTICLE 6.
                                 INDEMNIFICATION

         Section 6.1       SURVIVAL OF REPRESENTATIONS, WARRANTIES, INDEMNITIES
AND COVENANTS. Subject to SECTION 6.6, the representations, warranties and
indemnities set forth in this Agreement shall survive for a period of two (2)
years from the Closing Date (the "Indemnification Period"). All post-closing
covenants shall survive the Closing for the period(s) specified in this
Agreement or, if not specified, for the Indemnification Period. If a party has
received notice of a potential breach of a representation, covenant or warranty,
or the occurrence


                                       26

<PAGE>

of an otherwise potentially-indemnifiable event under this Agreement within the
Indemnification Period, such party may preserve its right to assert a later
claim for damages arising from such breach or event by delivering notice of same
to the other party within the Indemnification Period.

         Section 6.2       INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF BUYER.

                  (a)      To the extent that any Diverting Employee (as defined
below) directly or indirectly diverts, on or before the one-year anniversary of
the Closing Date, any line of coverage which is part of any account comprising
the Purchased Book of Business, subject to SECTION 1.5(C), Buyer shall be paid
by Seller or Parent (which obligations shall be joint and several) an amount
equal to (i) 3.0 times (ii) the aggregate annualized policy commissions on such
diverted lines of coverage. For purposes of this Agreement, a "Diverting
Employee" means any person who is an employee of Seller during the sixty
(60)-day period prior to the Closing Date but does not become employed by Buyer
by virtue of refusing to sign Buyer's standard employment agreement; provided,
however, that any person that is employed by Buyer at any time during the one
year period following the Closing Date shall not be a Diverting Employee (unless
such person ceased to be employed by Buyer during such one year period because
of such person's refusal to sign Buyer's standard employment agreement).

                  (b)      Subject to SECTION 1.5(C), Seller and OPL agree,
jointly and severally, to indemnify and hold Buyer and its officers, directors,
and affiliates harmless from and against any Adverse Consequences (as defined
below), net of any tax benefits or insurance actually received by Buyer, that
any of such parties may suffer or incur resulting from, arising out of, relating
to, or caused by (i) the breach of any of Seller's, Parent's or OPL's
representations, warranties, obligations or covenants contained herein, (ii) the
operation of the Business, the ownership of the Acquired Assets by Seller prior
to the Effective Date, including, without limitation, any claims or lawsuits
based on conduct of Seller, Parent or OPL occurring before the Effective Date,
or (iii) any liability of Seller that becomes a liability of Buyer under any
bulk transfer law of any jurisdiction, under any common law doctrine of de facto
merger or successor liability, or otherwise by operation of law). For purposes
of this ARTICLE 6, the phrase "Adverse Consequences" means all charges,
complaints, actions, suits, proceedings, hearings, investigations, claims,
demands, judgments, orders, decrees, stipulations, injunctions, damages, dues,
penalties, fines, costs, amounts paid in settlement, liabilities (whether known
or unknown, whether absolute or contingent, whether liquidated or unliquidated,
and whether due or to become due), obligations, taxes, liens, losses, expenses,
and fees, including all attorneys' fees and court costs. For purposes of this
SECTION 6.2, "Adverse Consequences" also specifically includes any Adverse
Consequences attributable to any deductible(s) due and payable under Seller's
E&O tail policy as described in SECTION 5.5 hereof; provided, however, that to
the extent Buyer incurs or suffers any Adverse Consequences for which equitable
relief may be sought, the parties agree that Buyer may seek equitable relief for
such Adverse Consequences from Seller, Parent, and/or OPL, as appropriate.

         Section 6.3       INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF SELLER
AND PARENT. Buyer agrees to indemnify and hold Seller, Parent, OPL and their
respective officers, directors, shareholders and affiliates harmless from and
against any Adverse Consequences, net of any tax benefits or insurance actually
received by such party, any of such parties may suffer or incur resulting from,
arising out of, relating to, or caused by (a) the breach of any of Buyer's
representations, warranties, obligations or covenants contained herein, (b) the
operation of the


                                       27

<PAGE>

Business, ownership of the Acquired Assets or assumption of the Assumed
Liabilities by Buyer on or after the Effective Date, including, without
limitation, any claims or lawsuits based on conduct of Buyer occurring on or
after the Closing, or (c) the employment by Buyer on or after the Effective Date
of any of the Transferred Employees who become employees of Buyer.

         Section 6.4       MATTERS INVOLVING THIRD PARTIES.

                  (a)      If any third party shall notify any party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") that may
give rise to a claim for indemnification against the other party (the
"Indemnifying Party") under this ARTICLE 6, then the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party from any obligation hereunder unless
(and then solely to the extent) the Indemnifying Party thereby is prejudiced.

                  (b)      The Indemnifying Party shall have the right to defend
the Indemnified Party against the Third Party Claim with counsel of its choice
satisfactory to the Indemnified Party so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing within fifteen (15) days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party shall indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (ii) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party shall have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (iii) the Third Party
Claim involves only money damages and does not seek an injunction or other
equitable relief, (iv) settlement of, or an adverse judgment with respect to,
the Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice materially adverse
to the continuing business interests of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.

                  (c)      So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with SECTION 6.4(B) above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party shall not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party, and (iii) the Indemnifying Party shall not
consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim unless such settlement is on exclusively monetary terms
or the Indemnified Party shall have consented in writing to the terms of such
settlement.

                  (d)      If any of the conditions in SECTION 6.4(B) above is
or becomes unsatisfied, however, (i) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it may deem appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, the
Indemnifying Party in connection therewith), (ii) the Indemnifying Party shall
reimburse the Indemnified Party promptly and periodically for the costs of
defending against the Third Party Claim (including reasonable attorneys' fees
and expenses), and (iii) the Indemnifying Party shall


                                       28

<PAGE>
remain responsible for any Adverse Consequences the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this ARTICLE 6.

         Section 6.5       LIMITS ON INDEMNIFICATION.

                  (a)      Deductible. (i) Seller, Parent and OPL shall not have
any obligation or liability to Buyer under SECTION 6.2 unless and until the
aggregate amount of Adverse Consequences suffered by Buyer arising out of
matters referred to in SECTION 6.2 shall have exceeded US$150,000.00, in which
case Seller, Parent and OPL shall be obligated and liable under SECTION 6.2 only
with respect to such excess; and (ii) Buyer shall not have any obligation or
liability to Seller, Parent or OPL under SECTION 6.3 unless and until the
aggregate amount of Adverse Consequences suffered by Seller, Parent and OPL
arising out of the matters referred to in SECTION 6.3 shall have exceeded
US$150,000.00, in which case Buyer shall be obligated and liable under SECTION
6.3 only with respect to such excess.

                  (b)      Limit of Liability. The aggregate liability of
Seller, Parent and OPL, on the one hand, and Buyer, on the other hand, under
SECTION 6.2 or SECTION 6.3, respectively, shall not exceed US$23,000,000.

         Section 6.6       PAYMENT OF AND INDEMNIFICATION FOR TAXES, LITIGATION
AND CERTAIN EMPLOYEE BENEFIT MATTERS. Notwithstanding anything in this ARTICLE 6
to the contrary:

                  (a)      Seller shall be responsible for and shall indemnify
Buyer for all Taxes in respect of the Acquired Assets payable for any Tax period
or portion thereof ending on or prior to the Effective Date. Buyer shall be
responsible for and shall indemnify Seller for all Taxes in respect of the
Acquired Assets payable for any Tax period or portion thereof beginning on or
after the Effective Date. All representations, warranties, covenants and
indemnities in connection with any Tax liabilities (including, without
limitation, in connection with Buyer's payment of any portion of the
consideration pursuant to SECTION 1.4(A) hereof) shall survive until the
expiration of the applicable statute of limitations period, provided, however,
that there shall be no double recovery for any breach of representation under
SECTION 3.12 hereof for any indemnification obligation under SECTION 6.6(A)
hereof.

As used in this Agreement, the term "Tax" means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Code Section 59A), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.

                  (b)      Notwithstanding SECTION 6.1, all representations,
warranties, covenants and indemnities in connection with the operation of the
Business, any litigation or other proceeding of any nature whatsoever directly
or indirectly related to the Acquired Assets or the Assumed Liabilities arising
prior to the Effective Date (including, but not limited to, any class action,
litigation or proceeding involving Seller, Parent or OPL), shall survive until
such litigation or


                                       29

<PAGE>

proceeding has been finally decided, settled or adjudicated; provided, however,
that Buyer shall not be entitled to indemnification pursuant to SECTION 6.3
unless Buyer has delivered to OPL written notice of any such litigation or
proceeding within one (1) year of: (i) the commencement of such litigation or
proceeding that commences on or after the Effective Date, or (ii) the joinder of
Seller, Parent or OPL to any class action, litigation or proceeding which such
joinder occurs on or after the Effective Date.

                  (c)      All representations, warranties, covenants and
indemnities in connection with Buyer's assumption of responsibility for Seller's
Group Health Plans as set forth in Section 5.11(d) hereof shall survive until
the expiration of the applicable statute of limitations period.

                  (d)      No Adverse Consequences with respect to the
indemnifiable events set forth in this SECTION 6.6 shall be subject to the
deductible or liability limitation (including the calculation of such deductible
or liability limitation) set forth in SECTION 6.5 hereof.

         Section 6.7       TAX EFFECTS OF INDEMNIFICATION PAYMENTS. The Parties
agree that any indemnification payments made pursuant to this Agreement, except
any indemnification payment with respect to any breach of any covenant in
SECTION 5.2 of this Agreement, shall be treated for tax purposes as an
adjustment to the payments made under SECTION 1.4(A)(II), (III) or (IV).

                                   ARTICLE 7.
                             [INTENTIONALLY OMITTED]

                                   ARTICLE 8.
                                  MISCELLANEOUS

         Section 8.1       NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
by facsimile (if confirmed), or mailed by registered or certified mail (return
receipt requested), or overnight courier service to the parties at the following
addresses or at such other address for a party as shall be specified by like
notice:

                  (a)      If to Buyer, to

                           Brown & Brown of Missouri, Inc.
                           c/o Brown & Brown, Inc.
                           401 E. Jackson St., Suite 1700
                           Tampa, Florida  33601
                           Fax No.: (813) 222-4464
                           Attn:    Laurel Grammig
                                    General Counsel


                                       30

<PAGE>

                  (b)      If to Seller, Parent or OPL, to

                           Parcel Insurance Plan, Inc.
                           c/o Overseas Partners Capital Corp.
                           115 Perimeter Center Place, Suite 940
                           Atlanta, Georgia  30346
                           Fax No.: (770) 913-6756
                           Attn:  David Gorst

                  With a copy to:

                           Overseas Partners Ltd.
                           Mintflower Place
                           8 Par-la-ville Road
                           Hamilton HMO8 Bermuda
                           Fax No.: (441) 295-3078
                           Attn:  Malcolm C. Furbert

                  and to:

                           LeBoeuf, Lamb, Greene & MacRae, L.L.P.
                           125 West 55th Street
                           New York, New York  10019
                           Fax No.:  (212) 424-8500
                           Attn:  Michael Groll

Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.

         Section 8.2       USE OF TERM "KNOWLEDGE". "Knowledge" means the actual
knowledge of any director or officer of Buyer, Seller, Parent or OPL, as the
case may be, as to any matter as to which such person has executive or
supervisory responsibilities, and as to which such person has exercised
reasonable diligence in the performance of such responsibilities.

         Section 8.3       COUNTERPARTS. This Agreement may be executed in two
(2) or more counterparts, each of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.

         Section 8.4       ENTIRE AGREEMENT. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

         Section 8.5       ASSIGNMENT. Except as contemplated in SECTION 5.4
hereof, neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the


                                       31

<PAGE>

other parties. This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by the parties and their respective successors and assigns.

         Section 8.6       SEVERABILITY. If any provision or covenant, or any
part thereof, of this Agreement should be held by any court to be illegal,
invalid or unenforceable, either in whole or in part, such illegality,
invalidity or unenforceability shall not affect the legality, validity or
enforceability of the remaining provisions or covenants, or any part thereof,
all of which shall remain in full force and effect.

         Section 8.7       ATTORNEYS' FEES AND COSTS. The prevailing party in
any proceeding brought to enforce the terms of this Agreement shall be entitled
to an award of reasonable attorneys' fees and costs incurred in investigating
and pursuing such action, both at the trial and appellate levels.

         Section 8.8       GOVERNING LAW. This Agreement shall be governed by
and construed and enforced in accordance with internal Missouri law without
regard to any applicable conflicts of law.

         Section 8.9       AMENDMENT; WAIVER. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the parties hereto. Each of Seller and Parent may consent to any such amendment
for itself at any time prior to the Closing without the prior authorization of
its Board of Directors. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.

         Section 8.10       INCORPORATION OF EXHIBIT AND SCHEDULES. The Exhibit
and Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.

         Section 8.11      SPECIFIC PERFORMANCE. Each of the parties
acknowledges and agrees that the other party would be damaged irreparably if any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agrees that the other party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity.

         Section 8.12      BULK TRANSFER LAWS. Seller hereby indemnifies and
agrees to hold Buyer harmless from, against and in respect of, and shall on
demand reimburse Buyer for, any loss, liability, cost or expense suffered or
incurred by Buyer by reason of the failure of Seller to pay or discharge any
claims of creditors that could be asserted against Buyer by reason of
non-compliance with the provisions of any bulk transfer laws of any jurisdiction
in connection with the transactions contemplated by this Agreement.


                               * * * * * * * * * *

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS]


                                       32

<PAGE>




         IN WITNESS WHEREOF, the parties have signed or caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.


                                  BROWN & BROWN OF MISSOURI, INC.



                                  By: /s/ Jim W. Henderson
                                      ------------------------------------------
                                  Name:    Jim W. Henderson
                                  Title:   President


                                  PARCEL INSURANCE PLAN, INC.



                                  By: /s/ Charles D. Smith
                                      ------------------------------------------
                                  Name:    Charles D. Smith
                                  Title:   President


                                  OVERSEAS PARTNERS CAPITAL CORP.



                                  By: /s/ Mary R. Hennessy
                                      ------------------------------------------
                                  Name:    Mary R. Hennessy
                                  Title:   President


                                  OVERSEAS PARTNERS LTD.



                                  By: /s/ Mark R. Bridges
                                      ------------------------------------------
                                  Name:    Mark R. Bridges
                                  Title:   Executive Vice President, Chief
                                           Financial Officer



                                       33

<PAGE>



                              EXHIBIT AND SCHEDULES

Exhibit A:                 Form of Assumption Agreement
Exhibit B:                 Form of Bill of Sale and Assignment
Exhibit C:                 Form of Escrow Agreement

Schedule 1.2(a):           Active Insurance Customers of Seller
Schedule 1.2(c)(i):        Assigned Contracts - Non-Disclosure Agreements
Schedule 1.2(c)(ii):       Assigned Contracts - Other
Schedule 1.2(e):           Tangible Property
Schedule 1.4(a):           Adjustments to Purchase Price
Schedule 1.4(d)(i):        Assumed Liabilities
Schedule 3.5:              Consents and Approvals
Schedule 3.8:              Ordinary Course Transactions
Schedule 3.9(c):           Material Contracts
Schedule 3.10:             List of Claims and Litigation of Seller
Schedule 3.11:             Compliance
Schedule 3.17:             Insurance
Schedule 3.19:             Employee Benefit Plans
Schedule 3.21(c):          Owned Intellectual Property
Schedule 3.21(d):          Licensed Intellectual Property
Schedule 5.11:             Transferred Employees



                                       34


<PAGE>
                                                                    EXHIBIT 10m

                            ASSET PURCHASE AGREEMENT

         This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of October
3, 2001, is made and entered into by and among BROWN & BROWN OF LEHIGH VALLEY,
INC., a Pennsylvania corporation ("Buyer"); HENRY S. LEHR, INC., a Pennsylvania
corporation ("Seller"); and WILLIAM H. LEHR, a resident of the Commonwealth of
Pennsylvania, and PATSY A. LEHR, a resident of the Commonwealth of Pennsylvania
(each a "Shareholder" and collectively, the "Shareholders").

                                   BACKGROUND

         Seller is engaged in the insurance agency business in Bethlehem,
Pennsylvania (the "Business"), and wishes to sell certain of its assets relating
to such Business to Buyer. Buyer desires to acquire such assets upon the terms
and conditions expressed in this Agreement. The Shareholders own all of the
outstanding capital stock of Seller and is entering into this Agreement to
provide certain non-competition, indemnification and other assurances to Buyer
as a material inducement for Buyer to enter into this transaction.

         THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, the sufficiency of which
is hereby acknowledged, the parties agree as follow:

                                    ARTICLE 1
                                 THE ACQUISITION


         Section 1.1       COVENANTS OF SALE AND PURCHASE. At the Closing (as
defined in SECTION 2.1), and upon and subject to the terms and conditions of
this Agreement, the parties mutually covenant and agree as follows:

                  (a)      Seller will sell, convey and assign to Buyer all
right, title and interest of Seller in and to the Acquired Assets (as defined in
SECTION 1.2) free and clear of all liens, pledges, security interests, charges,
restrictions or encumbrances of any nature whatsoever except as set forth in
Schedule 1.1(a); and

                  (b)      Buyer will purchase the Acquired Assets from Seller
in exchange for the consideration described in SECTION 1.4.

         Section 1.2       THE ACQUIRED ASSETS.  In this Agreement, the phrase
"Acquired Assets" means all of the assets of Seller described below:

                  (a)      Purchased Book of Business. All of Seller's insurance
agency business, including but not limited to the life, health, bond, and
property and casualty insurance business (both personal and commercial lines)
and renewals and expirations thereof, together with all written or otherwise
recorded documentation, data or information relating to Seller's insurance
agency business, whether compiled by Seller or by other agents or employees of
Seller, including but not limited to: (i) lists of insurance companies and
records pertaining thereto; and



<PAGE>

(ii) customer lists, prospect lists, policy forms, and/or rating information,
expiration dates, information on risk characteristics, information concerning
insurance markets for large or unusual risks, and all other types of written or
otherwise recorded information customarily used by Seller or available to
Seller, including all other records of and pertaining to the accounts and
customers of Seller, past and present, including, but not limited to, the active
insurance customers of Seller, all of whom are listed on Schedule 1.2(a)
(collectively, the "Purchased Book of Business").

                  (b)      General Intangibles. All of the following intangible
personal property used in connection with Seller's insurance agency business or
pertaining to the Acquired Assets:

                           (i)      all of Seller's business records necessary
to enable Buyer to renew the Purchased Book of Business;

                           (ii)     the goodwill of Seller's insurance agency
business, including the name "Henry S. Lehr, Inc." and all derivatives thereof
(but not including the names "Lehr Management Corporation" or "The Lehr
Institute"), and any other fictitious names and trade names that are currently
in use by Seller, and all telephone listings, post office boxes, mailing
addresses, and advertising signs and materials; and

                           (iii)    any assignable non-solicitation agreements
and covenants not to compete made by employees of Seller and all other
assignable covenants not to compete in favor of Seller; provided, however, that
Buyer and Seller agree that due to Shareholders' continuing involvement and
interest in the business after the Closing Date, Seller shall retain such
continuing interest in the enforcement of the assigned non-solicitation
agreements and covenants not to compete as shall be necessary to the joint
enforcement of such provisions referenced in SECTION 4.9.

                  (c)      Miscellaneous Items. All other assets of Seller
relating or pertaining to the Purchased Book of Business, including computer
disks, server, software, databases (whether in the form of computer tapes or
otherwise), related object and source codes, and associated manuals, and any
other records or media of storage or programs for retrieval of information
pertaining to the Purchased Book of Business, and all supplies and materials,
including promotional and advertising materials, brochures, plans, supplier
lists, manuals, handbooks, and related written data and information, including
any customer deposits held for future due dates.

                  (d)      Tangible Property. All items of furniture, fixtures,
computers, office equipment and other tangible property used in Seller's
business. To the extent that any of such items are subject to a lease as set
forth in Schedule 1.2(d), Buyer will assume the lease and acquire all of
Seller's right to acquire such property upon termination of the lease.

                  (e)      Assigned Agreements. All of Seller's rights under the
leases and agreements identified in Schedule 1.2(e) hereof (the "Assigned
Agreements").


                                       2

<PAGE>

         Section 1.3       EXCLUSIONS AND EXCEPTIONS. Seller does not agree to
sell or assign, and Buyer does not agree to purchase or assume, any assets not
described in SECTION 1.2 hereof. Without limiting the foregoing, Buyer shall not
purchase or assume any of the following:

                  (a)      cash in hand or in banks, certificates of deposits or
any interest accrued thereon, accounts receivable, life insurance policies
relating to Shareholders or proceeds thereof, money market certificates, stocks,
bonds, real estate and automobiles;

                  (b)      any contract, lease or other obligation not
specifically assigned to Buyer under this Agreement;

                  (c)      as set forth in more detail in SECTION 4.9, any duty
or liability of any type whatsoever with respect to any employee or to any
pension or profit sharing plan or other employee benefit;

                  (d)      corporate minutes books and stock books;

                  (e)      all non-transferable permits;

                  (f)      claims for refunds of taxes and other governmental
charges to the extent such refunds relate to periods ending prior to the
Effective Date; or

                  (g)      any bonus, incentive, or advance payments received by
Seller in connection with the Assigned Agreements (except with respect to any
contingent commissions as set forth in SECTION 1.5).

         Section 1.4       PURCHASE  PRICE.  (a) The  purchase  price for the
Acquired Assets (the "Purchase Price") shall be Eleven Million Six Hundred
Thousand and No/100 Dollars ($11,600,000.00).

                  (b)      Subject to SECTION 1.4(C), the Purchase Price will be
paid to Seller as follows: (i) $10,440,000.00, which equals ninety percent (90%)
of the Purchase Price, shall be paid to Seller on the Closing Date; and (ii)
1,160,000.00, which represents the remaining portion of the Purchase Price (the
"Holdback Amount"), will be paid to Seller on or before October 31, 2002.

                  (c)      In accordance with ARTICLE 7 hereof, the Holdback
Amount shall be delivered by Buyer at Closing to Fitzpatrick Lentz & Bubba,
P.C., which, along with Buyer's Assistant General Counsel, shall act as joint
escrow agents, and subject to reduction by Buyer to offset any obligations of
Seller and the Shareholders under the indemnification provisions contained in
ARTICLE 6 hereof. Satisfaction of any indemnity obligations from the deferred
portion of the Purchase Price shall not operate to waive the indemnification
obligations of Seller and the Shareholders contained in ARTICLE 6 for damages
incurred by Buyer in excess of such amounts; provided, however, that the
Holdback Amount shall be credited against the total aggregate liability of
Seller and the Shareholders referred to in SECTION 6.6 hereof.


                                       3

<PAGE>

                  (d)      For federal and state income tax purposes, the
parties agree to allocate the Purchase Price as follows: (i) $500,000.00 of the
Purchase Price shall be allocated to the tangible property described in SECTION
1.2(D); (ii) $100,000.00 shall be allocated to the covenants of Seller,
$300,000.00 shall be allocated to the covenants of Shareholder William H. Lehr,
and $100,000.00 shall be allocated to the covenants of Shareholder Patsy A.
Lehr, contained in SECTION 4.2 hereof, and (iii) the remainder of the Purchase
Price shall be allocated to the Purchased Book of Business and related goodwill.
The parties shall execute corresponding IRS Form 8594s at Closing to confirm the
allocation of the Purchase Price.

         Section 1.5       COMMISSIONS COLLECTED. All commissions on
installments of agency bill policies with an effective date prior to October 1,
2001 (the "Effective Date") and actually billed prior to such date shall be the
property of Seller and those billed or effective on or after the Effective Date
shall be the property of Buyer, regardless of when actually received. All
commissions on direct bill policies actually received by Seller from insurance
carriers before the Effective Date shall be the property of Seller and those
actually received from insurance carriers on or after the Effective Date shall
be the property of Buyer, regardless of when billed by the insurance carrier.
Buyer shall be entitled to all contingent commissions and/or override
commissions received on or after the Effective Date, regardless of when earned.
All additional or return commissions as a result of audits actually received
before the Closing shall be the property or the responsibility of Seller,
whether credit or debit, and regardless of effective date, and those actually
received on or after the Closing shall be the property or responsibility of
Buyer, whether credit or debit, and regardless of effective date.

         Section 1.6       NO ASSUMED LIABILITIES. Except for the ongoing
obligation to service the Purchased Book of Business or any obligation otherwise
expressly assumed hereunder, Buyer shall not assume or be deemed to have assumed
any liability or obligation of Seller whatsoever.

                                    ARTICLE 2
                         CLOSING, ITEMS TO BE DELIVERED,
                     FURTHER ASSURANCES, AND EFFECTIVE DATE

         Section 2.1       CLOSING. The consummation of the purchase and sale of
assets under this Agreement (the "Closing") will take place at 9 a.m., local
time, on October 3, 2001 (the "Closing Date"), at the offices of Fitzpatrick
Lentz & Bubba, P.C., located at 4001 Schoolhouse Lane, Center Valley,
Pennsylvania, unless another date or place is agreed to in writing by the
parties hereto.

         Section 2.2       CONVEYANCE AND DELIVERY BY SELLER. On the Closing
Date, Seller will surrender and deliver possession of the Acquired Assets to
Buyer and take such steps as may be required to put Buyer in actual possession
and operating control of the Acquired Assets, and in addition shall deliver to
Buyer such bills of sale and assignments and other good and sufficient
instruments and documents of conveyance, in form reasonably satisfactory to
Buyer, as shall be necessary and effective to transfer and assign to, and vest
in, Buyer all of Seller's right, title, and interest in and to the Acquired
Assets free and clear of any lien, charge, pledge, security interest,
restriction or encumbrance of any kind (except as set forth in Schedule 1.1(a).
Without limiting the generality of the foregoing, at the Closing, Seller shall
deliver to Buyer:


                                       4

<PAGE>

                  (a)      a Bill of Sale and Assignment, substantially in the
form of Exhibit 2.2(a), executed by Seller (the "Bill of Sale");

                  (b)      an employment agreement, substantially in the form of
Exhibit 2.2(b), executed by the Shareholders (the "Shareholder Employment
Agreements");

                  (c)      an Assignment and Assumption Agreement, substantially
in the form of Exhibit 2.2(d), with respect to the Assigned Agreements, executed
by Seller (the "Assignment and Assumption Agreement");

                  (d)      duly adopted resolutions of Seller's Board of
Directors satisfactory to Buyer in its reasonable discretion: (i) approving a
plan of asset transfer (the "Plan of Asset Transfer") and proposing same to the
Shareholders for their consideration and adoption, in accordance with Section
1932(b) of the Pennsylvania Business Corporation Law (the "PBCL"); (ii)
terminating Seller's Employee Benefit Plans; and (iii) directing the Seller's
401(k) Plan's Trustee to apply for a determination letter from the Internal
Revenue Service with respect to the termination of the 401(k) Plan and to submit
a Notice of Intent to Terminate to all participants and beneficiaries under
401(k) Plan (the "Seller's Board Resolutions"); and

                  (e)      duly adopted resolutions of the Shareholders,
adopting the Plan of Asset Transfer in accordance with Section 1932(b) of the
PBCL (the "Shareholder Resolutions").

         Section 2.3       DELIVERY BY BUYER. On the Closing Date, Buyer will
deliver to Seller:

                  (a)      a wire transfer of immediately available funds to one
or more accounts designated in writing by Seller for the amount required to be
delivered at Closing pursuant to SECTION 1.4(B) hereof;

                  (b)      the Shareholder Employment Agreements, executed by
Buyer;

                  (c)      the Assignment and Assumption Agreement, executed by
Buyer;

                  (d)      a Promissory Note, substantially in the form of
Exhibit 2.3(d), with respect to the Holdback Amount, executed by Buyer (the
"Promissory Note"); and

                  (e)      duly adopted resolutions of Buyer's Board of
Directors, satisfactory to Seller in its reasonable discretion, approving the
transactions contemplated herein and Buyer's obligations under this Agreement.

         Section 2.4       MUTUAL PERFORMANCE. At the Closing, the parties shall
also deliver to each other the agreements and other documents referred to in
ARTICLE 4 hereof.

          Section 2.5      FURTHER ASSURANCES. From time to time after the
Closing, at Buyer's request, Seller will execute, acknowledge and deliver to
Buyer such other instruments of conveyance and transfer and will take such other
actions and execute and deliver such other


                                       5

<PAGE>

documents, certifications and further assurances as Buyer may reasonably request
in order to vest more effectively in Buyer, or to put Buyer more fully in
possession of, any of the Acquired Assets. Each of the parties hereto will
cooperate with the others and execute and deliver to the other parties such
other instruments and documents and take such other actions as may be reasonably
requested from time to time by any other party hereto as necessary to carry out,
evidence and confirm the intended purposes of this Agreement.

         Section 2.6       EFFECTIVE DATE. The Effective Date of this Agreement
and all related instruments executed at the Closing shall be October 1, 2001
unless otherwise specified. Notwithstanding the foregoing, Seller shall retain
the risk of loss for errors and omissions committed up until the Closing Date.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

I.       Seller and the Shareholders, jointly and severally when and where
applicable, represent and warrant to Buyer as follows:

         Section 3.1       ORGANIZATION. Seller is a corporation organized and
in good standing under the laws of the Commonwealth of Pennsylvania and its
status is active. Seller has all requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted. Seller is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the conduct of its insurance agency business requires it to be so
qualified.

         Section 3.2       CAPITALIZATION. The Shareholders own and hold all of
the outstanding shares of capital stock of Seller and there are no outstanding
options or rights to acquire additional shares of capital stock of Seller.

         Section 3.3       AUTHORITY. Seller has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of Seller. This Agreement has been, and the other agreements, documents
and instruments required to be delivered by Seller in accordance with the
provisions hereof (collectively, the "Seller's Documents") will be, duly
executed and delivered by duly authorized officers of Seller on behalf of
Seller, and this Agreement constitutes, and the Seller's Documents when executed
and delivered will constitute, the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization or similar laws from time to
time in effect relating to or affecting the enforcement of creditors' rights
generally and general equitable principles.

         Section 3.4       CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the
execution, delivery or performance of this Agreement by Seller nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the provisions hereof will (a) conflict with or result in any breach
of any provision of its Articles of Incorporation or Bylaws, (b) require any
filing with, or permit, authorization, consent or approval of, any court,
arbitral tribunal,


                                       6

<PAGE>

administrative agency or commission, or other governmental or other regulatory
authority or agency (each a "Governmental Entity"), or (c) except with respect
to any consents which may be required pursuant to the Assigned Agreements (other
than the current lease for Seller's offices located at 3893 Adler Place,
Bethlehem, Pennsylvania, for which such consent has been obtained prior to
Closing) result in a violation or breach of, or constitute a default under, any
of the terms, conditions or provisions of any agreement or other instrument or
obligation to which Seller is a party or by which Seller or any of its
properties or assets may be bound.

         Section 3.5       NO THIRD PARTY OPTIONS. There are no existing
agreements, options, commitments, or rights with, of or to any person to acquire
any of Seller's securities, assets, properties or rights included in the
Acquired Assets or any interest therein.

         Section 3.6       FINANCIAL STATEMENTS. Seller has delivered to Buyer
true and complete copies of (a) its balance sheet at September 30, 2000 and the
related statement of income for the fiscal year then ended (the "2000 Financial
Statements"), and (b) its balance sheet at August 31, 2001 (the "Balance Sheet
Date") and the related statement of income for the eleven (11) months then ended
(the "Interim Financial Statements"). The 2000 Financial Statements were
prepared in accordance with generally accepted accounting principles and the
Interim Financial Statements were prepared in accordance with Seller's standard
internal accounting methodology, in each case consistently applied throughout
the periods involved (subject, in the case of the Interim Financial Statements,
to normal recurring audit adjustments). Such balance sheets fairly present the
consolidated financial position, assets, and liabilities (whether accrued,
absolute, contingent or otherwise) of Seller at the dates indicated and such
statements of income fairly present the results of operations for the periods
then ended. Seller's financial books and records are accurate and complete in
all material respects. Except as set forth in Schedule 3.6, Seller has not
guaranteed any premium financing on behalf of its customers.

         Section 3.7       ORDINARY COURSE OF BUSINESS. Since the Balance Sheet
Date, Seller has carried on business in the usual, regular and ordinary course
in substantially the manner heretofore conducted and has taken no unusual
actions in contemplation of this transaction, except with the consent of Buyer.
Since the Balance Sheet Date, there have been no events or changes having an
adverse effect on Seller or the Acquired Assets. All of Seller's accounts
payable, including accounts payable to insurance carriers, are current and
reflected properly on its books and records, and will be paid in accordance with
their terms at their recorded amounts.

         Section 3.8       ASSETS. (a) Except as set forth in Schedule 1.1(a),
Seller owns and holds, free and clear of any lien, charge, pledge, security
interest, restriction, encumbrance or third-party interest of any kind
whatsoever (including insurance company payables), sole and exclusive right,
title and interest in and to the Acquired Assets, including but not limited to
the customer expiration records for those customers listed in Schedule 1.2(a),
together with the exclusive right to use such records and all customer accounts,
copies of insurance policies and contracts in force and all files, invoices and
records pertaining to the customers, their contracts and insurance policies, and
all other information comprising the Purchased Book of Business. Seller has not
received notice that any of the accounts listed in Schedule 1.2(a) has canceled
or non-renewed or intends to cancel or non-renew. Schedule 1.2(a) also shows the
revenue received by Seller from each of its appointed


                                       7

<PAGE>

carriers in the twelve-month period ended September 30, 2001. None of the
accounts shown in Schedule 1.2(a) represents business that has been brokered
through a third party.

                  (b)      The names "Henry S. Lehr, Inc.", "HSL, Inc.", "The
Lehr Companies", "Lehr Management", and "The Lehr Institute" are the only trade
names used by Seller or Shareholders within the past three (3) years. No party
has filed a claim during the past three (3) years against Seller alleging that
it has violated, infringed on or otherwise improperly used the intellectual
property rights of such party, or, if so, the claim has been settled with no
existing liability to Seller and, to the Knowledge of Seller and the
Shareholders (as defined in SECTION 7.2 hereof), Seller has not violated or
infringed any trademark, trade name, service mark, service name, patent,
copyright or trade secret held by others.

                  (c)      Schedule 3.8 lists all material contracts, agreements
and other written or verbal arrangements to which Seller is a party, including,
but not limited to, (i) any employment, non-compete, confidentiality or
non-solicitation agreement to which Seller or either of the Shareholders is a
party, (ii) any agreement relating to the purchase or sale of assets by Seller
within the past five (5) years, (iii) any agreement between Seller and either of
the Shareholders or between Seller and any officer, director or affiliate of
Seller, and (iv) any other contract or agreement not entered into in the
ordinary course of business. Seller has delivered true and complete copies of
each such agreement to Buyer and, in the case of unwritten agreements, a true
and complete summary of such arrangements. The parties to all such agreements
are in compliance with the terms thereof.

                  (d)      To the Knowledge of Seller and the Shareholders,
Seller's computer software included in the Acquired Assets performs in
accordance with the documentation and other written material used in connection
therewith, and is free of defects in programming and operation. Seller has
delivered to Buyer copies of all user and technical documentation related to
such software available to Seller.

         Section 3.9       LITIGATION AND CLAIMS. Except as disclosed in
Schedule 3.9, there is no suit, claim, action, proceeding or investigation
pending or, to the Knowledge of Seller and the Shareholders, threatened against
Seller and, to the Knowledge of Seller and the Shareholders, no circumstances
exist that could reasonably form a basis for such a suit, claim, action,
proceeding or investigation to be initiated or threatened. Seller is not subject
to any outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen, individually or in the aggregate, in the future would have
an adverse effect on Seller or the Acquired Assets or would prevent Seller from
consummating the transactions contemplated hereby. No voluntary or involuntary
petition in bankruptcy, receivership, insolvency or reorganization with respect
to Seller, or petition to appoint a receiver or trustee of Seller's property,
has been filed by or against Seller, nor will Seller file such a petition prior
to the Closing Date or for one hundred (100) days thereafter, and if such
petition is filed by others, the same will be promptly discharged. Seller has
not made any assignment for the benefit of creditors or admitted in writing
insolvency or that its property at fair valuation will not be sufficient to pay
its debts, nor will Seller permit any judgment, execution, attachment or levy
against it or its properties to remain outstanding or unsatisfied for more than
ten (10) days. Seller shall not become insolvent as a result of consummating the
transactions contemplated by this Agreement.


                                       8

<PAGE>

         Section 3.10      COMPLIANCE WITH APPLICABLE LAW. To the Knowledge of
Seller and the Shareholders, Seller holds all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for the
lawful conduct of the insurance agency business (collectively, the "Permits"),
and Seller is in compliance with the terms of the Permits. To the Knowledge of
Seller and the Shareholders, the business of Seller is not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity
(including, without limitation, the Gramm-Leach-Bliley Financial Services
Modernization Act of 1999 and any applicable federal or state regulations
promulgated pursuant thereto), except for possible violations that individually
or in the aggregate do not, and, insofar as reasonably can be foreseen, in the
future will not, have an adverse effect on its business. As of the date of this
Agreement, no investigation or review by any Governmental Entity with respect to
Seller is pending or, to the Knowledge of Seller and the Shareholders,
threatened.

         Section 3.11      TAX RETURNS AND AUDITS. Seller has timely filed all
federal, state, local and foreign tax returns, including all amended returns, in
each jurisdiction where Seller is required to do so or has paid or made
provision for the payment of any penalty or interests arising from the late
filing of any such return, has correctly reflected all taxes required to be
shown thereon, and has fully paid or made adequate provision for the payment of
all taxes that have been incurred or are due and payable pursuant to such
returns or pursuant to any assessment with respect to taxes in such
jurisdictions, whether or not in connection with such returns. Seller has not
received any notice that it is or may become subject to any audits with respect
to any federal, state, local or foreign tax returns required to be filed, and
there are no unresolved audit issues with respect to prior years' tax returns.
To the Knowledge of Seller and the Shareholders, there are no circumstances or
pending questions relating to potential tax liabilities nor claims asserted for
taxes or assessments of Seller that, if adversely determined, could result in a
tax liability that would have a material adverse effect on Seller or the
Acquired Assets for any period. Seller has not executed an extension or waiver
of any statute of limitations on the assessment or collection of any tax due
that is currently in effect. Seller is not holding any unclaimed property that
it is required to surrender to any state taxing authority including, without
limitation, any uncashed checks or unclaimed wages, and Seller has timely filed
all unclaimed property reports required to be filed with such state taxing
authorities. Seller does not purge its records of uncashed checks periodically.

         Section 3.12      NON-SOLICITATION COVENANTS. Except as set forth in
Schedule 3.12, Neither Seller nor either of the Shareholders is a party to any
agreement that restricts Seller's or the Shareholder's ability to compete in the
insurance agency industry or solicit specific insurance accounts.

         Section 3.13      ERRORS AND OMISSIONS; EMPLOYMENT PRACTICES LIABILITY.
Except as set forth in Schedule 3.13, Seller has not incurred any liability or
taken or failed to take any action that may reasonably be expected to result in
(a) a liability for errors or omissions in the conduct of its insurance business
or (b) employment practices liability (EPL), except such liabilities as are
fully covered by insurance. All errors and omissions (E&O) and EPL lawsuits and
claims currently pending or threatened against Seller are set forth in Schedule
3.13. Seller has E&O insurance coverage in force, with minimum liability limits
of $5 million per claim and $6 million aggregate, with a deductible of
$10,000.00 per claim and $30,000.00 aggregate, and the Shareholders will provide
to Buyer a certificate of insurance evidencing such coverage prior to or on the
Closing Date.


                                       9

<PAGE>

Seller has EPL insurance coverage in force, with minimum liability limits of $1
million per claim and $1 million aggregate, with a deductible of $2,500.00 per
claim, and the Shareholders will provide to Buyer a certificate of insurance
evidencing such coverage prior to or on the Closing Date. Seller has had the
same or higher levels of E&O and EPL coverage continuously in effect for at
least the past five (5) years.

         Section 3.14      EMPLOYEE DISHONESTY COVERAGE. Schedule 3.14 sets
forth a complete and correct list of all employee dishonesty bonds or policies,
including the respective limits thereof, held by Seller in the three (3) year
period prior to the Closing Date, and true and complete copies of such bonds or
policies have been delivered to Buyer. Seller has complied with all the
provisions of such bonds or policies and Seller has an employee dishonesty bond
or policy in full force and effect as of the Closing Date.

         Section 3.15      NO MISREPRESENTATIONS. None of the representations
and warranties of Seller and the Shareholders set forth in this Agreement or in
the attached Schedules, notwithstanding any investigation thereof by Buyer,
contains any untrue statement of a material fact, or omits the statement of any
material fact necessary to render the statements made not misleading.

II.      Buyer represents and warrants to Seller and the Shareholders as
follows:

         Section 3.16      ORGANIZATION. Buyer is a corporation organized and in
good standing under the laws of the Commonwealth of Pennsylvania and its status
is active. Buyer has all requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted. Buyer is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the conduct of its insurance agency business requires it to be so
qualified.

         Section 3.17      AUTHORITY. Buyer has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of Buyer. This Agreement has been, and the other agreements, documents
and instruments required to be delivered by Buyer in accordance with the
provisions hereof (collectively, the "Buyer's Documents") will be, duly executed
and delivered by duly authorized officers of Buyer on behalf of Buyer, and this
Agreement constitutes, and the Buyer's Documents when executed and delivered
will constitute, the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization or similar laws from time to time in effect relating
to or affecting the enforcement of creditors' rights generally and general
equitable principles.

         Section 3.18      CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the
execution, delivery or performance of this Agreement by Buyer nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the provisions hereof will (a) conflict with or result in any breach
of any provision of its Articles of Incorporation or Bylaws, (b) require any
filing with, or permit, authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission, or other governmental or
other regulatory authority or agency


                                       10

<PAGE>

(each a "Governmental Entity"), or (c) result in a violation or breach of, or
constitute a default under, any of the terms, conditions or provisions of any
agreement or other instrument or obligation to which Buyer is a party or by
which Buyer or any of its properties or assets may be bound.

         Section 3.19      NO MISREPRESENTATIONS. None of the representations
and warranties of Buyer set forth in this Agreement, notwithstanding any
investigation thereof by Seller or the Shareholders, contains any untrue
statement of a material fact, or omits the statement of any material fact
necessary to render the statements made not misleading.

                                    ARTICLE 4
                              ADDITIONAL AGREEMENTS

         Section 4.1       BROKERS OR FINDERS. Each of the parties represents,
as to itself, its subsidiaries and its affiliates, that no agent, broker,
investment banker, financial advisor, or other firm or person is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement except
Berwind Financial, L.P. (any commissions or fees payable to which shall be the
sole responsibility of Seller), and each of the parties agrees to indemnify and
hold the others harmless from and against any and all claims, liabilities, or
obligations with respect to any fees, commissions, or expenses asserted by any
person on the basis of any act or statement alleged to have been made by such
party or its affiliate.

         Section 4.2       NON-COMPETITION COVENANTS. (a) Subject to SECTION
5.1(C), Seller and the Shareholders each agree that it, he or she, as the case
may be shall not, for a period of five (5) years beginning on the Closing Date,
engage in, or be or become the owner of an equity interest in, or otherwise
consult with, be employed by, or participate in the business of, any entity
(other than Buyer) engaged in the insurance agency business within a fifty
(50)-mile radius of Bethlehem, Pennsylvania. Without limiting the foregoing,
Seller and the Shareholders shall not, during such five-year period, (i)
solicit, divert, accept business from, nor service, directly or indirectly, as
insurance solicitor, insurance agent, insurance broker or otherwise, for his or
her account or the account of any other agent, broker, or insurer, either as
owner, shareholder, promoter, employee, consultant, manager or otherwise, any
account that is part of the Purchased Book of Business or any insurance account
then serviced by Buyer, or (ii) hire or directly or indirectly solicit any
employees of Buyer or its affiliates to work for Seller, the Shareholders or any
of their affiliates, or any company that competes with Buyer or its affiliates.
The Shareholders acknowledge that the non-solicitation covenants contained in
any employment agreement he or she may enter into with Buyer will be in addition
to, and will not supersede or be subordinate to, the non-competition and
non-solicitation covenants contained in this SECTION 4.2.

                  (b)      Notwithstanding anything in this Agreement to the
contrary, the covenants set forth in this SECTION 4.2 shall not be held invalid
or unenforceable because of the scope of the territory or actions subject hereto
or restricted hereby, or the period of time within which such covenants are
imperative; but the maximum territory, the actions subject to such covenants,
and the period of time in which such covenants are enforceable, respectively,
are subject to


                                       11

<PAGE>

determination by a final judgment of any court which had jurisdiction over the
parties and subject matter.

         Section 4.3       REMEDY FOR BREACH OF COVENANTS. In the event of a
breach of the provisions of SECTION 4.2, Buyer shall be entitled to injunctive
relief as well as any other applicable remedies at law or in equity. Should a
court of competent jurisdiction declare any of the covenants set forth in
SECTION 4.2 unenforceable due to a unreasonable restriction, duration,
geographical area or otherwise, the parties agree that such court shall be
empowered and shall grant Buyer or its affiliates injunctive relief to the
extent reasonably necessary to protect their respective interests. Seller and
the Shareholders acknowledge that the covenants set forth in SECTION 4.2
represent an important element of the value of the Acquired Assets and were a
material inducement for Buyer to enter into this Agreement.

         Section 4.4       SUCCESSOR RIGHTS. The covenants contained in SECTION
4.2 shall inure to the benefit of any successor in interest of Buyer by way of
merger, consolidation, sale or other succession.

         Section 4.5       ERRORS AND OMISSIONS, EMPLOYMENT PRACTICES LIABILITY,
AND EMPLOYEE DISHONESTY EXTENDING REPORTING ("TAIL") COVERAGE. On or prior to
the Closing Date, the Shareholders shall cause Seller to purchase, at Seller's
expense, a tail coverage extension on each of Seller's errors and omissions
(E&O), employment practices liability (EPL), and employee dishonesty insurance
policy (or employee dishonesty bond, as the case may be). Such coverages shall
extend for a period of at least five (5) years from the Closing Date, shall have
the same coverages and deductibles currently in effect, and shall otherwise be
in form reasonably acceptable to Buyer. A certificate of insurance evidencing
each such coverage shall be delivered to Buyer at or prior to Closing.

         Section 4.6       EXPENSES. Whether or not the transaction contemplated
by this Agreement is consummated, all costs and expenses incurred in connection
with this Agreement and the transaction contemplated hereby shall be paid by the
party incurring such expenses.

         Section 4.7       CONFIDENTIALITY. The parties each agree to maintain
the terms of this Agreement, including the consideration payable by Buyer, in
strict confidence and shall not disclose such terms to any third party without
the prior written consent of Buyer, unless required to do so by law (including,
without limitation, applicable securities laws). Notwithstanding the foregoing,
Seller and the Shareholders acknowledge and agree that promptly after the
Closing, Buyer shall issue a press release, a copy of which shall have been
provided by Buyer to Seller and the Shareholders within a reasonable amount of
time in advance for their review and reasonable comment, which press release
shall, among other things, set forth Seller's estimated commission revenue for
the twelve-month period prior to Closing.

         Section 4.8       TERMINATION OF EMPLOYEES; REIMBURSEMENT OF BUSINESS
EXPENSES AND SEGREGATION OF REVENUES AFTER EFFECTIVE DATE. (a) Except as
otherwise provided in SECTION 4.8(B) below, Seller shall terminate the
employment of all of Seller's employees, effective as of the Effective Date.
Seller shall be responsible for all payments, unless such payments are the
responsibility of a third party (i.e., insurer), to all of Seller's employees
(whether or not


                                       12

<PAGE>

terminated as of the Effective Date) for, and liabilities associated with, all
employee benefits and Employee Benefit Plans including, but not limited to,
vacation, bonuses, and sick leave benefits, accruing prior to the Effective
Date.

                  (b)      With respect to those employees who are employed by
Seller pursuant to a written employment agreement ("Contract Employees"), all of
which agreements are attached hereto collectively as Schedule 4.8(b), Seller
shall not terminate their employment as of the Effective Date. With respect to
such Contract Employees:

                           (i)      Seller and Buyer shall, at least two (2)
days prior to the scheduled Closing Date, jointly meet with each of the Contract
Employees and shall advise him/her that the employment agreements between Seller
and its Contract Employees will be assigned to Buyer as of the Closing Date. The
Notice attached hereto as Schedule 4.8(b)(i) shall be presented to the Contract
Employees by Buyer and Seller at such meetings, and the Contract Employees shall
be requested to sign the standard Brown & Brown employment agreement which shall
be attached to the Notice and is attached hereto as Schedule 4.8(b)(i). The
standard Brown & Brown employment agreement shall replace and supersede the
Contract Employees' current employment agreement with Seller but will provide
that the Contract Employees' commission schedule in effect as of the Closing
Date shall remain in effect through December 31, 2001.

                           (ii)     In the event any of the Contract Employees
refuses to enter into the standard Brown & Brown employment agreement on or
before the close of business on October 19, 2001, such employees shall be
considered to have immediately voluntarily resigned from their employment with
Seller without cause ("Resigning Employees"). Seller shall indemnify and hold
Buyer harmless from and against any Adverse Consequences, as defined in SECTION
6.2(B), that Buyer may suffer or incur arising out of or relating to claims by
the Resigning Employees, or any of them, for severance payments and/or payments
in lieu of notice under their respective employment agreements with Seller.

                  (c)      Buyer shall reimburse Seller for all wage and
employee benefit payments and other normal and customary business expenses made
or incurred by Seller after the Effective Date; provided, however, that on and
after the Closing Date, Seller shall segregate, hold in trust in a separate
account, and promptly pay over to Buyer all commissions and fees that are the
property of Buyer pursuant to SECTION 1.5 hereof. Buyer shall be responsible, as
of the Effective Date, for any wages and employee benefits under Buyer's
existing plans and policies for any employee of Seller, whether or not a
Contract Employee, who accepts an offer of employment with Buyer by entering
into Buyer's standard employment agreement.

         Section 4.9       ENFORCEMENT OF ASSIGNED EMPLOYMENT AGREEMENTS. In the
event that a Resigning Employee whose employment agreement with Seller was
assigned to Buyer under SECTION 1.2 hereof, (i) materially breaches any of the
post-termination covenants under his or her employment agreement with Seller,
Seller and the Shareholders shall cooperate with Buyer in enforcing the terms of
such agreement assigned to Buyer and shall join in any legal or equitable
proceedings (to the extent permitted under applicable law) instituted by Buyer
for such purpose, the legal fees and costs of any such proceedings to be borne
by Seller.


                                       13

<PAGE>

         Section 4.10      CORPORATE  NAME.  Promptly  after the Closing,
Seller agrees to cease all use of the name "Henry S. Lehr, Inc." or any
derivative thereof and will, no later than five (5) business days after the
Closing Date, file an amendment to its Articles of Incorporation, changing its
corporate name to a new name that bear no resemblance to its current name.

                                    ARTICLE 5
                                   CONDITIONS

         Section 5.1       CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of each party to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction prior to or on the Closing Date
of the following conditions:

                  (a)      All authorizations, consents, orders, or approvals
of, or declarations or filings with, or expirations of waiting periods imposed
by, any Governmental Entity, the failure to obtain which would have a material
adverse effect on the Business or the Acquired Assets after the Closing, shall
have been filed, occurred, or been obtained;

                  (b)      No temporary restraining order, preliminary or
permanent injunction, or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the transaction shall be in effect; and

                  (c)      The obligations of the parties to effect the
transactions contemplated by this Agreement are subject to the simultaneous sale
of the assets of Apollo Financial Corporation to Buyer or its affiliates.

         Section 5.2       CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to effect the transactions contemplated by this Agreement is subject to
the satisfaction of the following conditions, unless waived by Buyer:

                  (a)      The representations and warranties of Seller and the
Shareholders set forth in this Agreement shall be true and correct in all
material respects as of the Closing Date;

                  (b)      Seller and the Shareholders shall have performed in
all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date;

                  (c)      Buyer shall be satisfied, in its sole discretion,
with the results of its due diligence investigation of Seller's business and
records;

                  (d)      Seller shall have delivered the Bill of Sale to
Buyer;

                  (e)      Seller shall have delivered the Assignment and
Assumption Agreement to Buyer;

                  (f)      Seller shall have delivered the Shareholder
Employment Agreement to Buyer;


                                       14

<PAGE>

                  (g)      Subject to SECTION 4.9, Seller shall have delivered
the Staff Employment Agreements to Buyer;

                  (h)      Seller shall have delivered to Buyer a copy of
Seller's Board Resolutions;

                  (i)      Seller shall have delivered to Buyer a copy of the
Shareholder Resolutions, along with a copy of the Plan of Asset Transfer adopted
by the Shareholders;

                  (j)      Seller shall have delivered evidence to Buyer,
satisfactory to Buyer in its sole discretion, of a Certificate of Insurance
regarding the errors and omissions tail coverage required under SECTION 4.5
hereof;

                  (k)      Except as set forth in Schedule 1.1(a), all liens,
judgments, and other encumbrances on the Acquired Assets shall have been
satisfied and released prior to Closing;

                  (l)      The Acquisition Committee and the Board of Directors
of Buyer's parent company, Brown & Brown, Inc., shall have approved this
Agreement and the transactions contemplated herein; and

                  (m)      There shall have been no material adverse change to
the Business, Acquired Assets, or financial condition of Seller since the
Balance Sheet Date.

         Section 5.3       CONDITIONS TO OBLIGATION OF SELLER AND THE
SHAREHOLDERS. The obligation of Seller and the Shareholders to effect the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions, unless waived by Seller and the Shareholders:

                  (a)      The representations and warranties of Buyer set forth
in this Agreement shall be true and correct in all material respects as of the
Closing Date;

                  (b)      Buyer shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or prior
to the Closing Date;

                  (c)      Buyer shall have executed and delivered the
Shareholder Employment Agreements to the Shareholders;

                  (d)      Buyer shall have executed and delivered the
Assignment and Assumption Agreement to Seller;

                  (e)      Buyer shall have executed and delivered the
Promissory Note to Seller; and

                  (f)      Buyer shall have delivered to Seller and the
Shareholders certified Resolutions of Buyer's Board of Directors.


                                       15

<PAGE>

                                    ARTICLE 6
                                 INDEMNIFICATION

         Section 6.1       SURVIVAL OF REPRESENTATIONS, WARRANTIES, INDEMNITIES
AND COVENANTS. (a) Subject to SECTION 6.1(B) and unless otherwise set forth in
this Agreement, the representations, warranties and indemnities set forth in
this Agreement shall survive for a period of two (2) years from the Closing
Date. All post-closing covenants shall survive the Closing for the period(s)
specified in this Agreement or, if not specified, for a period of two (2) years
following the Closing Date. If a party has received notice of a potential breach
of a representation, covenant or warranty, or the occurrence of an otherwise
potentially-indemnifiable event under this Agreement within such two-year
period, such party may preserve its right to assert a later claim for damages
arising from such breach or event by delivering notice of same to the other
party within the two-year period.

                  (b)      Notwithstanding anything set forth in SECTION 6.1(A),
all representations, warranties, covenants and indemnities in connection with
SECTION 4.7 or any tax liabilities shall survive in perpetuity, subject to
applicable statutes of limitations.

         Section 6.2       INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF BUYER.
Subject to SECTION 6.4:

                  (a)      To the extent that any Resigning Employee (as defined
in SECTION 4.8(B)(I)) diverts in direct contravention of such Resigning
Employee's employment agreement with Seller being assigned to Buyer hereunder,
on or before the one-year anniversary of the Closing Date, any line of coverage
which is part of any account comprising the Purchased Book of Business, Buyer
shall be paid by Seller and the Shareholders (which obligations shall be joint
and several) an amount equal to (i) 1.5 times (ii) the aggregate annualized
policy commissions on such diverted lines of coverage.

                  (b)      Seller and the Shareholders agree, jointly and
severally, to indemnify and hold Buyer and its officers, directors, and
affiliates harmless from and against any Adverse Consequences (as defined below)
that any of such parties may suffer or incur resulting from, arising out of,
relating to, or caused by (i) the breach of any of Seller's or the Shareholders'
representations, warranties, obligations or covenants contained herein, or (ii)
the operation of the Business or ownership of the Acquired Assets by Seller on
or prior to the Closing, including, without limitation, any claims or lawsuits
based on conduct of Seller or the Shareholders occurring before the Closing. For
purposes of this ARTICLE 6, the phrase "Adverse Consequences" means all charges,
complaints, actions, suits, proceedings, hearings, investigations, claims,
demands, judgments, orders, decrees, stipulations, injunctions, damages, dues,
penalties, fines, costs, amounts paid in settlement, liabilities (whether known
or unknown, whether absolute or contingent, whether liquidated or unliquidated,
and whether due or to become due), obligations, taxes, liens, losses, expenses,
and fees, including all attorneys' fees and court costs.

                  (c)      In addition to and without limiting SECTION 6.2(A) or
(B), Seller and the Shareholders agree, from and after the Closing, to jointly
and severally indemnify Buyer from and against the entirety of any Adverse
Consequences Buyer may suffer resulting from, arising out of, relating to, in
the nature of, or caused by:


                                       16

<PAGE>

                           (i)      any liability or obligation of Seller that
is not assumed hereunder (including any liability of Seller that becomes a
liability of Buyer under any bulk transfer law of any jurisdiction, under any
common law doctrine of de facto merger or successor liability, or otherwise by
operation of law); or

                           (ii)     any liability of Seller for the unpaid taxes
of any person or entity (including Seller) under United States Treasury
Regulation ss. 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.

         Section 6.3       INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF SELLER
AND THE SHAREHOLDERS. Subject to SECTION 6.4, Buyer agrees to indemnify and hold
Seller, the Shareholders and their respective officers, directors, shareholders
and affiliates harmless from and against any Adverse Consequences that any of
such parties may suffer or incur resulting from, arising out of, relating to, or
caused by (a) the breach of any of Buyer's representations, warranties,
obligations or covenants contained herein, or (b) the operation of the Business
or ownership of the Acquired Assets by Buyer after the Closing, including,
without limitation, any claims or lawsuits based on conduct of Buyer occurring
after the Closing.

         Section 6.4       LIMITATION OF LIABILITY.  (a)  No indemnification by
either party under SECTION 6.2 or 6.3 shall be required to be made:

                           (i)      with respect to any claim for
indemnification by a party ("Indemnitee") as to which the party from whom
indemnification is sought ("Indemnitor") has not received written notice from
Indemnitee in accordance with SECTION 6.1(A);

                           (ii)     with respect to any claim for
indemnification for breaches of representations or warranties under SECTION
6.2(B)(I) or SECTION 6.3(A) if and to the extent the facts underlying such claim
were known to the actual knowledge of Indemnitee prior to the Closing; or

                           (iii)    with respect to (A) any claims under SECTION
6.2(A), the first Seventy-Five Thousand Dollars ($75,000.00) of aggregate
Adverse Consequences incurred by Buyer, and (B) with respect to any
indemnification claims pursuant to a provision other than under SECTION 6.2(A),
the first Twenty-Five Thousand Dollars ($25,000.00) (the "Basket Amount") of
aggregate Adverse Consequences incurred by a party (Seller and the Shareholders
being treated as one party for purposes of this SECTION 6.4), it being the
intent of the parties that each party shall have a "basket" in such amount with
respect to aggregate claims for indemnification.

                  (b)      All amounts payable by Indemnitor shall be computed
net of any recovery actually paid to Indemnitee (less any deductible incurred by
Indemnitee) under any third-party insurance coverage with respect thereto which
offsets the Adverse Consequences that would otherwise be sustained by
Indemnitee.

                  (c)      The total aggregate liability of any party with
respect to its indemnification obligations under this Agreement shall not exceed
Five Million Dollars ($5,000,000.00) (the "Maximum Liability Amount"); provided,
however, that the Holdback Amount shall be credited against the total aggregate
liability of Seller and the Shareholders set forth in this SECTION 6.4(B).


                                       17

<PAGE>

                  (d)      Notwithstanding any of the foregoing provisions, any
Adverse Consequences for which Buyer is entitled to indemnification as a result
of the breach by Seller or the Shareholders of their covenants set forth in
SECTION 4.2 shall not be subject to the Basket Amount or the Maximum Liability
Amount.

                                    ARTICLE 7
                                     ESCROW

         Section 7.1       ESCROW AGREEMENT. Pursuant to SECTION 1.4(C) hereof,
at Closing Purchaser shall by wire transfer deliver to Fitzpatrick Lentz &
Bubba, P.C. (the "Escrow Agent") the Holdback Amount (for purposes of this
ARTICLE 7, the "Escrowed Funds"), to be held and ultimately disbursed by the
Escrow Agent in accordance with this ARTICLE 7.

         Section 7.2       INTEREST. The Escrowed Funds shall be deposited in a
high performance money fund with a current yield of approximately three (3%)
percent per annum. Subject to the remaining terms of this Article, all interest
earned on the Escrowed Funds shall accrue to the benefit of Seller and
Shareholders.

         Section 7.3       INDEMNIFICATION CLAIMS.

                  (a)      If Buyer shall make a claim for indemnification
hereunder. Buyer shall promptly give written notice of such claim to (i) the
Escrow Agent, (ii) Seller, and (iii) Shareholders. Such notice shall describe
the nature of the claim, the amount thereof, the provisions in this Agreement
and related documents on which the claim is based and shall include a brief
summary of the factual basis on which the claim is based. The thirty (30) day
period immediately following the date which Buyer gives notice to the Escrow
Agent, Seller and Shareholders is referred to herein as the "Response Period."

                  (b)      If the Escrow Agent has not received a written
objection to a claim delivered pursuant to SECTION 7.3(A) from the Seller and/or
Shareholders during the Response Period, the claim shall be conclusively
presumed to have been approved by the Seller and/or Shareholders, and the Escrow
Agent shall promptly thereafter make a cash payment to Buyer equal to the amount
of the claim out of the Escrowed Funds

                  (c)      If during the Response Period the Escrow Agent shall
have received from the Seller and/or Shareholders a written objection to the
claim made by Buyer pursuant to SECTION 7.3(A) above, then for a period of
thirty (30 ) days after receipt by the Escrow Agent of such objection, Buyer and
the Seller and/or Shareholders shall endeavor to resolve the difference and to
issue a joint written direction to the Escrow Agent in respect to the claim in
issue (a "Written Direction"). The Escrow Agent shall act in accordance with the
Written Direction, if an when issued. If a Written Direction is not issued prior
to the end of such thirty (30) day period, Buyer or the Seller or Shareholders
may institute litigation in any court of competent jurisdiction to adjudicate
its rights under this Agreement. The Escrow Agent shall transfer to Buyer funds
from the Escrowed Funds in an amount equal to the full amount of any final and


                                       18

<PAGE>

nonappealable order entered in connection with such litigation or the balance of
the applicable Escrowed Funds, whichever is less, not later than five (5) days
after receipt of such order.

                  (d)      The obligations of Escrow Agent shall be limited to
receiving and holding the Escrowed Funds, and to disburse the same in accordance
with this ARTICLE 7. Should there arise any factual question or dispute
concerning the Escrowed Funds and whether the Escrow Agent turn over the same,
or to whom the same shall be paid or disbursed, or in any event, if the Escrow
Agent so decides, the Escrow Agent may, at its discretion, pay over and deliver
the same to the Court of Common Pleas of Northampton County to be held by said
court pending a resolution of the matter. Following such payment and delivery to
the court, the Escrow Agent shall there upon be discharged from all
responsibility and liability involving the said escrow paid to the court and may
represent Seller, Shareholders or Buyer hereunder in any such dispute. The
parties acknowledge that Escrow Agent is attorney for Seller and Shareholders
and that nothing herein shall preclude Escrow Agent from continuing to represent
Seller and the Shareholders in any adversary proceeding upon the payment of the
Escrowed Funds into court.

         Section 7.4       DISTRIBUTIONS AND TERMINATION OF ESCROW. On or before
October, 31, 2002 (the "Release Date"), Escrow Agent shall wire transfer the
balance of the Escrowed Funds plus all interest earned thereon to Seller and/or
Shareholders as directed in writing by the Seller and Shareholders. On the
Release Date, the applicable amount shall be promptly distributed to the Seller
and/or Shareholders, assuming the remaining amount in the Escrow Account is in
excess of the maximum amount which would be payable to Buyer if all then pending
claims applicable to the Escrowed Funds were determined in favor of Buyer (the
"Maximum Claim Amount"). A claim shall be deemed to be "pending" for purposes of
this Section if written notice of a claim for indemnification has been given in
good faith by Buyer and received by the Escrow Agent pursuant to SECTION 7.3(A)
hereof prior to the Release Date. If the remaining amount of the Escrowed Funds
would not be in excess of the Maximum Claim Amount, then Escrow Agent shall only
distribute to Seller and/or Shareholders the Release Date the amount of the
Escrowed Funds in excess of the Maximum Claim Amount. Any monies scheduled to be
released, but instead retained by the Escrow Agent due to pending claims, shall
be promptly distributed either to Buyer or to the Seller and/or Shareholders by
the Escrow Agent upon, and in accordance with, either a Written Direction or
court order as described in SECTION 7.3(C) hereof. Following the Release Date,
as pending claims are satisfied or otherwise disposed of, any part of the
Escrowed Funds held by the Escrow Agent which is in excess of the Maximum Claim
Amount shall be promptly distributed to the Seller and/or Shareholders.

                                    ARTICLE 8
                                  MISCELLANEOUS

         Section 8.1       NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (if confirmed), or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses or at such other
address for a party as shall be specified by like notice:

                  (a)      If to Buyer, to


                                       19

<PAGE>

                                    Brown & Brown of Lehigh Valley, Inc.
                                    90 South Commerce Way, Suite 100
                                    Bethlehem, Pennsylvania  18017-2267
                                    Telecopy No.: (610) 867-1162
                                    Attn:  Robert Iocco

                           with a copy to

                                    Brown & Brown, Inc.
                                    401 E. Jackson St., Suite 1700
                                    Tampa, Florida  33601
                                    Telecopy No.: (813) 222-4464
                                    Attn:  Laurel Grammig

                  (b)      if to Seller or to the Shareholders, to

                                    William H. Lehr
                                    Patsy A. Lehr
                                    734 Paxinosa Avenue
                                    Easton, PA 18042

                           with a copy to

                                    Joseph A. Bubba, Esquire
                                    Fitzpatrick Lentz & Bubba, P.C.
                                    4001 Schoolhouse Lane
                                    P.O. Box 219
                                    Center Valley, Pennsylvania  18034-0219
                                    Telecopy No.: (610) 797-6663

         Section 8.2       USE OF TERM "KNOWLEDGE". With respect to the term
"Knowledge" as used herein: (a) an individual will be deemed to have "Knowledge"
of a particular fact or other matter if (i) such individual is actually aware of
such fact or other matter, or (ii) a prudent individual could be expected to
discover or otherwise become of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or matter; and (b) a corporation or other business entity will be
deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving, who has at any time in the twelve (12) months prior
to the Closing Date served, as a director, officer, executor, or trustee (or in
any similar capacity) of such corporation or business entity has, or at any time
had, Knowledge of such fact or other matter.

         Section 8.3       COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.


                                       20

<PAGE>

         Section 8.4       ENTIRE AGREEMENT. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

         Section 8.5       ASSIGNMENT. Except as contemplated in SECTION 4.4
hereof, neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
This Agreement will be binding upon, inure to the benefit of, and be enforceable
by the parties and their respective successors and assigns.

         Section 8.6       SEVERABILITY. If any provision or covenant, or any
part thereof, of this Agreement should be held by any court to be illegal,
invalid or unenforceable, either in whole or in part, such illegality,
invalidity or unenforceability shall not affect the legality, validity or
enforceability of the remaining provisions or covenants, or any part thereof,
all of which shall remain in full force and effect.

         Section 8.7       ATTORNEYS' FEES AND COSTS. The prevailing party in
any proceeding brought to enforce the terms of this Agreement shall be entitled
to an award of reasonable attorneys' fees and costs incurred in investigating
and pursuing such action, both at the trial and appellate levels.

         Section 8.8       GOVERNING LAW. This Agreement shall be governed by
and construed and enforced in accordance with internal Pennsylvania law without
regard to any applicable conflicts of law.

         Section 8.9       WAIVER OF JURY TRIAL. The parties hereby knowingly,
voluntarily and intentionally waive any right either may have to a trial by jury
with respect to any litigation related to or arising out of, under or in
conjunction with this Agreement.

         Section 8.10      AMENDMENT;  WAIVER.  This  Agreement may not be
amended, or any provision waived, except by an instrument in writing signed on
behalf of each of the parties.

                               * * * * * * * * * *

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS]


                                       21

<PAGE>

         IN WITNESS WHEREOF, the parties have signed or caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.

                                     BUYER:

                                     BROWN & BROWN OF LEHIGH VALLEY,
                                     INC.


                                     By:   /s/ Thomas E. Riley
                                         ---------------------------------------
                                     Name:    Thomas E. Riley
                                     Title:   President

                                     SELLER:

                                     HENRY S. LEHR, INC.


                                     By:   /s/ William H. Lehr
                                         ---------------------------------------
                                     Name:    William H. Lehr
                                     Title:   President

                                     SHAREHOLDERS:

                                       /s/ William H. Lehr
                                     -------------------------------------------
                                     William H. Lehr, individually

                                       /s/ Patsy A. Lehr
                                     -------------------------------------------
                                     Patsy A. Lehr, individually

                                     ESCROW AGENT:

                                     FITZPATRICK LENTZ & BUBBA, P.C.


                                     By:   /s/ Joseph A. Bubba
                                         ---------------------------------------
                                          Joseph A. Bubba, Esquire, A Director


                                       22

<PAGE>

                             SCHEDULES AND EXHIBITS


Schedule 1.1(a):       Permitted Liens and Encumbrances
Schedule 1.2(a):       Purchased Book of Business
Schedule 1.2(d):       Tangible Property
Schedule 1.2(e):       Assigned Agreements
Schedule 3.6:          Guaranteed Premium Financing
Schedule 3.8:          Material Contracts
Schedule 3.9:          List of Claims and Litigation
Schedule 3.12:         Non-Solicitation Covenants
Schedule 3.13:         E&O and EPL Claims and Litigation
Schedule 3.14:         Employee Dishonesty Coverage
Schedule 4.8(b):       Contract Employees
Schedule 4.8(b)(i):    Notice

Exhibit 2.2(a):        Bill of Sale
Exhibit 2.2(b):        Shareholder Employment Agreement
Exhibit 2.2(d):        Assignment and Assumption Agreement
Exhibit 2.3(d):        Promissory Note


                                       23


<PAGE>
(MULTICURRENCY--CROSS BORDER)                                        Exhibit 10p


                                     ISDA(R)

                  International Swap Dealers Association, Inc.

                                MASTER AGREEMENT

                          dated as of December 5, 2001

SUNTRUST BANK                     AND                       BROWN & BROWN, INC.
  Party A                                                      Party B

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:--

1.       INTERPRETATION

(a)      DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.

(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations
 form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.

2.       OBLIGATIONS

(a)      GENERAL CONDITIONS.

         (i) Each party will make each payment or delivery specified in each
         Confirmation to be made by it, subject to the other provisions of this
         Agreement.

         (ii) Payments under this Agreement will be made on the due date for
         value on that date in the place of the account specified in the
         relevant Confirmation or otherwise pursuant to this Agreement, in
         freely transferable funds and in the manner customary for payments in
         the required currency. Where settlement is by delivery (that is, other
         than by payment), such delivery will be made for receipt on the due
         date in the manner customary for the relevant obligation unless
         otherwise specified in the relevant Confirmation or elsewhere in this
         Agreement.

         (iii) Each obligation of each party under Section 2(a)(i) is subject to
         (1) the condition precedent that no Event of Default or Potential Event
         of Default with respect to the other party has occurred and is
         continuing, (2) the condition precedent that no Early Termination Date
         in respect of the relevant Transaction has occurred or been effectively
         designated and (3) each other applicable condition precedent specified
         in this Agreement.




<PAGE>





(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)      NETTING. If on any date amounts would otherwise be payable:--

         (i)      in the same currency; and

         (ii)     in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)      DEDUCTION OR WITHHOLDING FOR TAX.

         (i) GROSS-UP. All payments under this Agreement will be made without
         any deduction or withholding for or on account of any Tax unless such
         deduction or withholding is required by any applicable law, as modified
         by the practice of any relevant governmental revenue authority, then in
         effect. If a party is so required to deduct or withhold, then that
         party ("X") will:--

                  (1)      promptly notify the other party ("Y") of such
                  requirement;

                  (2) pay to the relevant authorities the full amount required
                  to be deducted or withheld (including the full amount required
                  to be deducted or withheld from any additional amount paid by
                  X to Y under this Section 2(d)) promptly upon the earlier of
                  determining that such deduction or withholding is required or
                  receiving notice that such amount has been assessed against Y;

                  (3) promptly forward to Y an official receipt (or a certified
                  copy), or other documentation reasonably acceptable to Y,
                  evidencing such payment to such authorities; and

                  (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
                  to the payment to which Y is otherwise entitled under this
                  Agreement, such additional amount as is necessary to ensure
                  that the net amount actually received by Y (free and clear of
                  Indemnifiable Taxes, whether assessed against X or Y) will
                  equal the full amount Y would have received had no such
                  deduction or withholding been required. However, X will not be
                  required to pay any additional amount to Y to the extent that
                  it would not be required to be paid but for:--

                           (A)      the failure by Y to comply with or perform
                           any agreement contained in Section 4(a)(i),
                           4(a)(iii) or 4(d); or

                           (B) the failure of a representation made by Y
                           pursuant to Section 3(f) to be accurate and true
                           unless such failure would not have occurred but for
                           (I) any action taken by a taxing authority, or
                           brought in a court of competent jurisdiction, on or
                           after the date on which a Transaction is entered into
                           (regardless of whether such action is taken or
                           brought with respect to a party to this Agreement) or
                           (II) a Change in Tax Law.


                                        2


<PAGE>





         (ii)     LIABILITY. If:--

                  (1) X is required by any applicable law, as modified by the
                  practice of any relevant governmental revenue authority, to
                  make any deduction or withholding in respect of which X would
                  not be required to pay an additional amount to Y under Section
                  2(d)(i)(4);

                  (2)      X does not so deduct or withhold; and

                  (3)      a liability resulting from such Tax is assessed
                  directly against X,

         then, except to the extent Y has satisfied or then satisfies the
         liability resulting from such Tax, Y will promptly pay to X the amount
         of such liability (including any related liability for interest, but
         including any related liability for penalties only if Y has failed to
         comply with or perform any agreement contained in Section 4(a)(i),
         4(a)(iii) or 4(d)).

(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3.       REPRESENTATIONS

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--

(a)      BASIC REPRESENTATIONS.

         (i)      STATUS. It is duly organized and validly existing under the
         laws of the jurisdiction of its organisation or incorporation and, if
         relevant under such laws, in good standing;

         (ii) POWERS. It has the power to execute this Agreement and any other
         documentation relating to this Agreement to which it is a party, to
         deliver this Agreement and any other documentation relating to this
         Agreement that it is required by this Agreement to deliver and to
         perform its obligations under this Agreement and any obligations it has
         under any Credit Support Document to which it is a party and has taken
         all necessary action to authorise such execution, delivery and
         performance;

         (iii)    NO VIOLATION OR CONFLICT. Such execution, delivery and
         performance do not violate or conflict with any law applicable to it,
         any provision of its constitutional documents, any order or judgment
         of any court or other agency of government applicable to it or any of
         its assets or any contractual restriction binding on or affecting it
         or any of its assets;

         (iv) CONSENTS. All governmental and other consents that are required to
         have been obtained by it with respect to this Agreement or any Credit
         Support Document to which it is a party have been obtained and are in
         full force and effect and all conditions of any such consents have been
         complied with; and

         (v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
         Credit Support Document to which it is a party constitute its legal,
         valid and binding obligations, enforceable in accordance with their
         respective terms (subject to applicable bankruptcy, reorganisation,
         insolvency, moratorium or similar laws affecting creditors' rights
         generally and subject, as to enforceability, to equitable principles of
         general application (regardless of whether enforcement is sought in a
         proceeding in equity or at law)).


                                        3


<PAGE>





(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.

(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.

(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)      PAYER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is accurate
and true.

(f)      PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.

4.       AGREEMENTS

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a)      FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

         (i)      any forms, documents or certificates relating to taxation
         specified in the Schedule or any Confirmation;

         (ii)     any other documents specified in the Schedule or any
         Confirmation; and

         (iii) upon reasonable demand by such other party, any form or document
         that may be required or reasonably requested in writing in order to
         allow such other party or its Credit Support Provider to make a payment
         under this Agreement or any applicable Credit Support Document without
         any deduction or withholding for or on account of any Tax or with such
         deduction or withholding at a reduced rate (so long as the completion,
         execution or submission of such form or document would not materially
         prejudice the legal or commercial position of the party in receipt of
         such demand), with any such form or document to be accurate and
         completed in a manner reasonably satisfactory to such other party and
         to be executed and to be delivered with any reasonably required
         certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)      TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.


                                        4


<PAGE>





(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

5.       EVENTS OF DEFAULT AND TERMINATION EVENTS

(a)      EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--

         (i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
         any payment under this Agreement or delivery under Section 2(a)(i) or
         2(e) required to be made by it if such failure is not remedied on or
         before the third Local Business Day after notice of such failure is
         given to the party;

         (ii) BREACH OF AGREEMENT. Failure by the party to comply with or
         perform any agreement or obligation (other than an obligation to make
         any payment under this Agreement or delivery under Section 2(a)(i) or
         2(e) or to give notice of a Termination Event or any agreement or
         obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
         with or performed by the party in accordance with this Agreement if
         such failure is not remedied on or before the thirtieth day after
         notice of such failure is given to the party;

         (iii)    CREDIT SUPPORT DEFAULT.

                  (1) Failure by the party or any Credit Support Provider of
                  such party to comply with or perform any agreement or
                  obligation to be complied with or performed by it in
                  accordance with any Credit Support Document if such failure is
                  continuing after any applicable grace period has elapsed;

                  (2) the expiration or termination of such Credit Support
                  Document or the failing or ceasing of such Credit Support
                  Document to be in full force and effect for the purpose of
                  this Agreement (in either case other than in accordance with
                  its terms) prior to the satisfaction of all obligations of
                  such party under each Transaction to which such Credit Support
                  Document relates without the written consent of the other
                  party; or

                  (3) the party or such Credit Support Provider disaffirms,
                  disclaims, repudiates or rejects, in whole or in part, or
                  challenges the validity of, such Credit Support Document;

         (iv) MISREPRESENTATION. A representation (other than a representation
         under Section 3(e) or (f)) made or repeated or deemed to have been made
         or repeated by the party or any Credit Support Provider of such party
         in this Agreement or any Credit Support Document proves to have been
         incorrect or misleading in any material respect when made or repeated
         or deemed to have been made or repeated;

         (v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
         Provider of such party or any applicable Specified Entity of such party
         (1) defaults under a Specified Transaction and, after giving effect to
         any applicable notice requirement or grace period, there occurs a
         liquidation of, an acceleration of obligations under, or an early
         termination of, that Specified Transaction, (2) defaults, after giving
         effect to any applicable notice requirement or grace period, in making
         any payment or delivery due on the last payment, delivery or exchange
         date of, or any payment on early termination of, a Specified
         Transaction (or such default continues for at least three Local
         Business Days if there is no applicable notice requirement or grace
         period) or (3) disaffirms, disclaims, repudiates or rejects in whole or
         in part, a Specified Transaction (or such action is taken by any person
         or entity appointed or empowered to operate it or act on its behalf);

         (vi)     CROSS DEFAULT. If "Cross Default" is specified in the
         Schedule as applying to the party, the occurrence or existence of (1)
         a default, event of default or other similar condition or event
         (however


                                        5


<PAGE>





         described) in respect of such party, any Credit Support Provider of
         such party or any applicable Specified Entity of such party under one
         or more agreements or instruments relating to Specified Indebtedness of
         any of them (individually or collectively) in an aggregate amount of
         not less than the applicable Threshold Amount (as specified in the
         Schedule) which has resulted in such Specified Indebtedness becoming,
         or becoming capable at such time of being declared, due and payable
         under such agreements or instruments, before it would otherwise have
         been due and payable or (2) a default by such party, such Credit
         Support Provider or such Specified Entity (individually or
         collectively) in making one or more payments on the due date thereof in
         an aggregate amount of not less than the applicable Threshold Amount
         under such agreements or instruments (after giving effect to any
         applicable notice requirement or grace period);

         (vii)    BANKRUPTCY. The party, any Credit Support Provider of such
         party or any applicable Specified Entity of such party:--

                  (1) is dissolved (other than pursuant to a consolidation,
                  amalgamation or merger); (2) becomes insolvent or is unable to
                  pay its debts or fails or admits in writing its inability
                  generally to pay its debts as they become due; (3) makes a
                  general assignment, arrangement or composition with or for the
                  benefit of its creditors; (4) institutes or has instituted
                  against it a proceeding seeking a judgment of insolvency or
                  bankruptcy or any other relief under any bankruptcy or
                  insolvency law or other similar law affecting creditors'
                  rights, or a petition is presented for its winding-up or
                  liquidation, and, in the case of any such proceeding or
                  petition instituted or presented against it, such proceeding
                  or petition (A) results in a judgment of insolvency or
                  bankruptcy or the entry of an order for relief or the making
                  of an order for its winding-up or liquidation or (B) is not
                  dismissed, discharged, stayed or restrained in each case
                  within 30 days of the institution or presentation thereof; (5)
                  has a resolution passed for its winding-up, official
                  management or liquidation (other than pursuant to a
                  consolidation, amalgamation or merger); (6) seeks or becomes
                  subject to the appointment of an administrator, provisional
                  liquidator, conservator, receiver, trustee, custodian or other
                  similar official for it or for all or substantially all its
                  assets; (7) has a secured party take possession of all or
                  substantially all its assets or has a distress, execution,
                  attachment, sequestration or other legal process levied,
                  enforced or sued on or against all or substantially all its
                  assets and such secured party maintains possession, or any
                  such process is not dismissed, discharged, stayed or
                  restrained, in each case within 30 days thereafter: (8) causes
                  or is subject to any event with respect to it which, under the
                  applicable laws of any jurisdiction, has an analogous effect
                  to any of the events specified in clauses (1) to (7)
                  (inclusive); or (9) takes any action in furtherance of, or
                  indicating its consent to, approval of, or acquiescence in,
                  any of the foregoing acts; or

         (viii)   MERGER WITHOUT ASSUMPTION. The party or any Credit Support
         Provider of such party consolidates or amalgamates with, or merges with
         or into, or transfers all or substantially all its assets to, another
         entity and, at the time of such consolidation, amalgamation, merger or
         transfer:--

                  (1) the resulting, surviving or transferee entity fails to
                  assume all the obligations of such party or such Credit
                  Support Provider under this Agreement or any Credit Support
                  Document to which it or its predecessor was a party by
                  operation of law or pursuant to an agreement reasonably
                  satisfactory to the other party to this Agreement; or

                  (2) the benefits of any Credit Support Document fail to extend
                  (without the consent of the other party) to the performance by
                  such resulting, surviving or transferee entity of its
                  obligations under this Agreement.

(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger


                                        6


<PAGE>





if the event is specified pursuant to (iv) below or an Additional Termination
Event if the event is specified pursuant to (v) below:--

         (i) ILLEGALITY. Due to the adoption of, or any change in, any
         applicable law after the date on which a Transaction is entered into,
         or due to the promulgation of, or any change in, the interpretation by
         any court, tribunal or regulatory authority with competent jurisdiction
         of any applicable law after such date, it becomes unlawful (other than
         as a result of a breach by the party of Section 4(b)) for such party
         (which will be the Affected Party):--

                  (1) to perform any absolute or contingent obligation to make a
                  payment or delivery or to receive a payment or delivery in
                  respect of such Transaction or to comply with any other
                  material provision of this Agreement relating to such
                  Transaction; or

                  (2) to perform, or for any Credit Support Provider of such
                  party to perform, any contingent or other obligation which the
                  party (or such Credit Support Provider) has under any Credit
                  Support Document relating to such Transaction;

         (ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
         brought in a court of competent jurisdiction, on or after the date on
         which a Transaction is entered into (regardless of whether such action
         is taken or brought with respect to a party to this Agreement) or (y) a
         Change in Tax Law, the party (which will be the Affected Party) will,
         or there is a substantial likelihood that it will, on the next
         succeeding Scheduled Payment Date (1) be required to pay to the other
         party an additional amount in respect of an Indemnifiable Tax under
         Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
         6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
         required to be deducted or withheld for or on account of a Tax (except
         in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
         additional amount is required to be paid in respect of such Tax under
         Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
         (B));

         (iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
         next succeeding Scheduled Payment Date will either (1) be required to
         pay an additional amount in respect of an Indemnifiable Tax under
         Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
         6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
         been deducted or withheld for or on account of any Indemnifiable Tax in
         respect of which the other party is not required to pay an additional
         amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
         either case as a result of a party consolidating or amalgamating with,
         or merging with or into, or transferring all or substantially all its
         assets to, another entity (which will be the Affected Party) where such
         action does not constitute an event described in Section 5(a)(viii);

         (iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
         specified in the Schedule as applying to the party, such party ("X"),
         any Credit Support Provider of X or any applicable Specified Entity of
         X consolidates or amalgamates with, or merges with or into, or
         transfers all or substantially all its assets to, another entity and
         such action does not constitute an event described in Section
         5(a)(viii) but the creditworthiness of the resulting, surviving or
         transferee entity is materially weaker than that of X, such Credit
         Support Provider or such Specified Entity, as the case may be,
         immediately prior to such action (and, in such event, X or its
         successor or transferee, as appropriate, will be the Affected Party);
         or

         (v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
         is specified in the Schedule or any Confirmation as applying, the
         occurrence of such event (and, in such event, the Affected Party or
         Affected Parties shall be as specified for such Additional Termination
         Event in the Schedule or such Confirmation).

(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.


                                        7


<PAGE>





6.       EARLY TERMINATION

(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)      RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

         (i) NOTICE. If a Termination Event occurs, an Affected Party will,
         promptly upon becoming aware of it, notify the other party, specifying
         the nature of that Termination Event and each Affected Transaction and
         will also give such other information about that Termination Event as
         the other party may reasonably require.

         (ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
         Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
         Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
         the Affected Party, the Affected Party will, as a condition to its
         right to designate an Early Termination Date under Section 6(b)(iv),
         use all reasonable efforts (which will not require such party to incur
         a loss, excluding immaterial, incidental expenses) to transfer within
         20 days after it gives notice under Section 6(b)(i) all its rights and
         obligations under this Agreement in respect of the Affected
         Transactions to another of its Offices or Affiliates so that such
         Termination Event ceases to exist.

         If the Affected Party is not able to make such a transfer it will give
         notice to the other party to that effect within such 20 day period,
         whereupon the other party may effect such a transfer within 30 days
         after the notice is given under Section 6(b)(i).

         Any such transfer by a party under this Section 6(b)(ii) will be
         subject to and conditional upon the prior written consent of the other
         party, which consent will not be withheld if such other party's
         policies in effect at such time would permit it to enter into
         transactions with the transferee on the terms proposed.

         (iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
         or a Tax Event occurs and there are two Affected Parties, each party
         will use all reasonable efforts to reach agreement within 30 days after
         notice thereof is given under Section 6(b)(i) on action to avoid that
         Termination Event.

         (iv)     RIGHT TO TERMINATE. If:--

                  (1) a transfer under Section 6(b)(ii) or an agreement under
                  Section 6(b)(iii), as the case may be, has not been effected
                  with respect to all Affected Transactions within 30 days after
                  an Affected Party gives notice under Section 6(b)(i); or

                  (2)      an Illegality under Section 5(b)(i)(2), a Credit
                  Event Upon Merger or an Additional Termination Event occurs,
                  or a Tax Event Upon Merger occurs and the Burdened Party is
                  not the Affected Party,

         either party in the case of an Illegality, the Burdened Party in the
         case of a Tax Event Upon Merger, any Affected Party in the case of a
         Tax Event or an Additional Termination Event if there is more than one
         Affected Party, or the party which is not the Affected Party in the
         case of a Credit Event Upon Merger or


                                        8


<PAGE>





         an Additional Termination Event if there is only one Affected Party
         may, by not more than 20 days notice to the other party and provided
         that the relevant Termination Event is then continuing, designate a day
         not earlier than the day such notice is effective as an Early
         Termination Date in respect of all Affected Transactions.

(c)      EFFECT OF DESIGNATION.

         (i) If notice designating an Early Termination Date is given under
         Section 6(a) or (b), the Early Termination Date will occur on the date
         so designated, whether or not the relevant Event of Default or
         Termination Event is then continuing.

         (ii) Upon the occurrence or effective designation of an Early
         Termination Date, no further payments or deliveries under Section
         2(a)(i) or 2(e) in respect of the Terminated Transactions will be
         required to be made, but without prejudice to the other provisions of
         this Agreement. The amount, if any, payable in respect of an Early
         Termination Date shall be determined pursuant to Section 6(e).

(d)      CALCULATIONS.

         (i) STATEMENT. On or as soon as reasonably practicable following the
         occurrence of an Early Termination Date, each party will make the
         calculations on its part, if any, contemplated by Section 6(e) and will
         provide to the other party a statement (1) showing, in reasonable
         detail, such calculations (including all relevant quotations and
         specifying any amount payable under Section 6(e)) and (2) giving
         details of the relevant account to which any amount payable to it is to
         be paid. In the absence of written confirmation from the source of a
         quotation obtained in determining a Market Quotation, the records of
         the party obtaining such quotation will be conclusive evidence of the
         existence and accuracy of such quotation.

         (ii) PAYMENT DATE. An amount calculated as being due in respect of any
         Early Termination Date under Section 6(e) will be payable on the day
         that notice of the amount payable is effective (in the case of an Early
         Termination Date which is designated or occurs as a result of an Event
         of Default) and on the day which is two Local Business Days after the
         day on which notice of the amount payable is effective (in the case of
         an Early Termination Date which is designated as a result of a
         Termination Event). Such amount will be paid together with (to the
         extent permitted under applicable law) interest thereon (before as well
         as after judgment) in the Termination Currency, from (and including)
         the relevant Early Termination Date to (but excluding) the date such
         amount is paid, at the Applicable Rate. Such interest will be
         calculated on the basis of daily compounding and the actual number of
         days elapsed.

(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

         (i)      EVENTS OF DEFAULT. If the Early Termination Date results from
         an Event of Default:--

                  (1) First Method and Market Quotation. If the First Method and
                  Market Quotation apply, the Defaulting Party will pay to the
                  Non-defaulting Party the excess, if a positive number, of (A)
                  the sum of the Settlement Amount (determined by the
                  Non-defaulting Party) in respect of the Terminated
                  Transactions and the Termination Currency Equivalent of the
                  Unpaid Amounts owing to the Non-defaulting Party over (B) the
                  Termination Currency Equivalent of the Unpaid Amounts owing to
                  the Defaulting Party.

                  (2)      First Method and Loss. If the First Method and Loss
                  apply, the Defaulting Party will pay to the Non-defaulting
                  Party, if a positive number, the Non-defaulting Party's Loss
                  in respect of this Agreement.


                                        9


<PAGE>





                  (3) Second Method and Market Quotation. If the Second Method
                  and Market Quotation apply, an amount will be payable equal to
                  (A) the sum of the Settlement Amount (determined by the
                  Non-defaulting Party) in respect of the Terminated
                  Transactions and the Termination Currency Equivalent of the
                  Unpaid Amounts owing to the Non-defaulting Party less (B) the
                  Termination Currency Equivalent of the Unpaid Amounts owing to
                  the Defaulting Party. If that amount is a positive number, the
                  Defaulting Party will pay it to the Non-defaulting Party; if
                  it is a negative number, the Non-defaulting Party will pay the
                  absolute value of that amount to the Defaulting Party.

                  (4) Second Method and Loss. If the Second Method and Loss
                  apply, an amount will be payable equal to the Non-defaulting
                  Party's Loss in respect of this Agreement. If that amount is a
                  positive number, the Defaulting Party will pay it to the
                  Non-defaulting Party; if it is a negative number, the
                  Non-defaulting Party will pay the absolute value of that
                  amount to the Defaulting Party.

         (ii)     TERMINATION EVENTS. If the Early Termination Date results
         from a Termination Event:--

                  (1) One Affected Party. If there is one Affected Party, the
                  amount payable will be determined in accordance with Section
                  6(e)(i)(3), if Market Quotation applies, or Section
                  6(e)(i)(4), if Loss applies, except that, in either case,
                  references to the Defaulting Party and to the Non-defaulting
                  Party will be deemed to be references to the Affected Party
                  and the party which is not the Affected Party, respectively,
                  and, if Loss applies and fewer than all the Transactions are
                  being terminated, Loss shall be calculated in respect of all
                  Terminated Transactions.

                  (2)      Two Affected Parties. If there are two Affected
                  Parties:--

                           (A) if Market Quotation applies, each party will
                           determine a Settlement Amount in respect of the
                           Terminated Transactions, and an amount will be
                           payable equal to (I) the sum of (a) one-half of the
                           difference between the Settlement Amount of the party
                           with the higher Settlement Amount ("X") and the
                           Settlement Amount of the party with the lower
                           Settlement Amount ("Y") and (b) the Termination
                           Currency Equivalent of the Unpaid Amounts owing to X
                           less (II) the Termination Currency Equivalent of the
                           Unpaid Amounts owing to Y; and

                           (B) if Loss applies, each party will determine its
                           Loss in respect of this Agreement (or, if fewer than
                           all the Transactions are being terminated, in respect
                           of all Terminated Transactions) and an amount will be
                           payable equal to one-half of the difference between
                           the Loss of the party with the higher Loss ("X") and
                           the Loss of the party with the lower Loss ("Y").

                  If the amount payable is a positive number, Y will pay it to
                  X; if it is a negative number, X will pay the absolute value
                  of that amount to Y.

         (iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
         Termination Date occurs because "Automatic Early Termination" applies
         in respect of a party, the amount determined under this Section 6(e)
         will be subject to such adjustments as are appropriate and permitted by
         law to reflect any payments or deliveries made by one party to the
         other under this Agreement (and retained by such other party) during
         the period from the relevant Early Termination Date to the date for
         payment determined under Section 6(d)(ii).

         (iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
         an amount recoverable under this Section 6(e) is a reasonable
         pre-estimate of loss and not a penalty. Such amount is payable for the
         loss of bargain and the loss of protection against future risks and
         except as otherwise provided in this Agreement neither party will be
         entitled to recover any additional damages as a consequence of such
         losses.


                                       10


<PAGE>





7.       TRANSFER

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.       CONTRACTUAL CURRENCY

(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d)      EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.


                                       11


<PAGE>





9.       MISCELLANEOUS

(a)      ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c)      SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)      REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)      COUNTERPARTS AND CONFIRMATIONS.

         (i) This Agreement (and each amendment, modification and waiver in
         respect of it) may be executed and delivered in counterparts (including
         by facsimile transmission), each of which will be deemed an original.

         (ii) The parties intend that they are legally bound by the terms of
         each Transaction from the moment they agree to those terms (whether
         orally or otherwise). A Confirmation shall be entered into as soon as
         practicable and may be executed and delivered in counterparts
         (including by facsimile transmission) or be created by an exchange of
         telexes or by an exchange of electronic messages on an electronic
         messaging system, which in each case will be sufficient for all
         purposes to evidence a binding supplement to this Agreement. The
         parties will specify therein or through another effective means that
         any such counterpart, telex or electronic message constitutes a
         Confirmation.

(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.      OFFICES; MULTIBRANCH PARTIES

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.


                                       12


<PAGE>





11.      EXPENSES

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

12.      NOTICES

(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-- (i) if in writing and
delivered in person or by courier, on the date it is delivered;

         (ii)     if sent by telex, on the date the recipient's answerback is
         received;

         (iii) if sent by facsimile transmission, on the date that transmission
         is received by a responsible employee of the recipient in legible form
         (it being agreed that the burden of proving receipt will be on the
         sender and will not be met by a transmission report generated by the
         sender's facsimile machine);

         (iv) if sent by certified or registered mail (airmail, if overseas) or
         the equivalent (return receipt requested), on the date that mail is
         delivered or its delivery is attempted; or

         (v)      if sent by electronic messaging system, on the date that
         electronic message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)      CHANGE OF ADDRESSES. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.

13.      GOVERNING LAW AND JURISDICTION

(a)      GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)      JURISDICTION. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--

         (i) submits to the jurisdiction of the English courts, if this
         Agreement is expressed to be governed by English law, or to the
         nonexclusive jurisdiction of the courts of the State of New York and
         the United States District Court located in the Borough of Manhattan in
         New York City, if this Agreement is expressed to be governed by the
         laws of the State of New York; and

         (ii) waives any objection which it may have at any time to the laying
         of venue of any Proceedings brought in any such court, waives any claim
         that such Proceedings have been brought in an inconvenient forum and
         further waives the right to object, with respect to such Proceedings,
         that such court does not have any jurisdiction over such party.


                                       13


<PAGE>





Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.      DEFINITIONS

As used in this Agreement:--

"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).

"AFFECTED PARTY" has the meaning specified in Section 5(b).

"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"APPLICABLE RATE" means:--

(a)      in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c)      in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and

(d)      in all other cases, the Termination Rate.

"BURDENED PARTY" has the meaning specified in Section 5(b).

"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.


                                       14


<PAGE>





"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).

"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.

"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.

"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"DEFAULTING PARTY" has the meaning specified in Section 6(a).

"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"ILLEGALITY" has the meaning specified in Section 5(b).

"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "UNLAWFUL" will be construed accordingly.

"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.


                                       15


<PAGE>





"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

"OFFICE" means a branch or office of a party, which may be such party's head or
home office.

"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--

(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and


                                       16


<PAGE>





(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"SPECIFIED ENTITY" has the meaning specified in the Schedule.

"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

"STAMP TAX" means any stamp, registration, documentation or similar tax.

"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"TAX EVENT" has the meaning specified in Section 5(b).

"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).

"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Terminated Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.


                                       17


<PAGE>





"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.


SUNTRUST BANK                              BROWN & BROWN, INC.


By:                                        By:
   --------------------------------           ---------------------------------
   Fred D. Woolf                              Name:
   Vice President                             Title:

Date:                                      Date:
     --------------------                       ---------------------


                                       18


<PAGE>





                                 SCHEDULE TO THE
                              ISDA MASTER AGREEMENT
                      DATED AS OF DECEMBER 5, 2001, BETWEEN

                                  SUNTRUST BANK
                                  ("PARTY A")

                                       AND

                              BROWN & BROWN, INC.
                                  ("PARTY B")


                                     Part 1
                                   Definitions

1.       "Affiliate" shall have the meaning assigned to such term in Section 14
         of this Agreement.

2.       "Calculation Agent" shall mean Party A.

3.       "Shareholders' Equity" means with respect to any entity, at any time,
         the sum (as shown in the most recent annual audited financial
         statements of such entity) of (i) its capital stock (including
         preferred stock) outstanding, taken at par value, (ii) its capital
         surplus and (iii) its retained earnings, minus (iv) treasury stock,
         each to be determined in accordance with generally accepted accounting
         principles.

4.       "Specified Entity" shall mean for the purposes of Sections 5(a)(v),
         (vi), and (vii), and Section 5(b)(iv) of this Agreement, in the case of
         Party A, not applicable, and in the case of Party B, any Affiliate of
         Party B.

5.       "Specified Indebtedness" shall have the meaning assigned to such term
         in Section 14 of this Agreement, but shall not include indebtedness in
         respect of deposits received.

6.       "Specified Transaction" shall have the meaning assigned to such term
         in Section 14 of this Agreement.

7.       "Termination Currency" shall mean United States Dollars.

8.       "Threshold Amount" shall mean, for purposes of Section 5(a)(vi) of
         this Agreement, (a) with respect to Party A, an amount equal to three
         percent (3%) of its Shareholders' Equity, determined in accordance
         with generally accepted accounting principles in such party's
         jurisdiction of incorporation or organization, consistently applied,
         as at the end of such party's most recently completed fiscal year, and
         (b) with respect to Party B, an amount equal to $1,000,000 (or the
         equivalent thereof in any other currencies), except that with respect
         to indebtedness under the Loan Agreement, the Threshold Amount shall
         be $0.00.


                                       19


<PAGE>





                                     Part 2
                                 Representations

1.       Tax Representations. None.

2.       The following paragraph is added as Section 3(g) of this Agreement:

         "(g) Eligible Contract Participant. It is an Eligible Contract
         Participant as defined in Section 101(12) of the Commodity Futures
         Modernization Act of 2000."


                                     Part 3
                                   Agreements

1.       Documents to be delivered. For purposes of Section 4(a) of this
         Agreement, each party agrees to deliver the following documents as
         applicable:

         (a)      Certified copies of all documents evidencing necessary
                  corporate authorizations, as well as other authorizations and
                  approvals with respect to the execution, delivery and
                  performance by the party of this Agreement and any Credit
                  Support Document.

                  Party required to deliver:                  Party B

                  Date by which to be delivered:              Upon execution of
                                                                  this Agreement

                  Covered by Section 3(d) Representation:     Yes

        (b)       An incumbency certificate of an authorized officer of the
                  party certifying the names, true signatures and authority of
                  the officers of the party signing this Agreement and any
                  Credit Support Document.

                  Party required to deliver:                  Party B

                  Date by which to be delivered:              Upon execution of
                                                                  this Agreement

                  Covered by Section 3(d) Representation:     Yes

         (c)      Such other document as the other party may reasonably request
                  in connection with each Transaction.

                  Party required to deliver:                  Party B

                  Date by which to be delivered:              Promptly upon
                                                                         request

                  Covered by Section 3(d) Representation:     Yes

         (d)      Such other written information respecting the condition or
                  operations, financial or otherwise, of Party B as Party A may
                  reasonably request from time to time.

                  Party required to deliver:                  Party B

                  Date by which to be delivered:              Promptly upon
                                                                         request

                  Covered by Section 3(d) Representation:     Yes


                                       20


<PAGE>





                                     Part 4
                             Termination Provisions

1.       Cross Default. The "Cross Default" provisions of Section 5(a)(vi) of
         this Agreement shall apply to each of Party A and Party B.

2.       Credit Event Upon Merger. The "Credit Event Upon Merger" provisions of
         Section 5(b)(iv) of this Agreement shall apply to each of Party A and
         Party B.

3.       Automatic Early Termination. The "Automatic Early Termination"
         provision of Section 6(a) of this Agreement shall not apply to either
         Party A or Party B.

4.       Payments on Early Termination. For purposes of Section 6(e) of this
         Agreement, Second Method and Loss shall apply.

5.       Additional Termination Event will not apply. Notwithstanding the
         foregoing, Party A will have the right (but not the obligation) to
         terminate all or a pro rata portion of any Transaction related to the
         Loan Agreement and will be entitled to receive from, or will be
         required to pay to, Party B the fair market value for such
         termination, as determined by Party A in good faith and in accordance
         with market practice and its own customary procedures, upon the
         occurrence of one or more of the following events:

         (a)      If the indebtedness under the Loan Agreement is (for whatever
                  reason, in whatever manner) partially or fully paid or
                  discharged (except with respect to any scheduled
                  amortization);

         (b)      If Party A ceases to be a party to the Loan Agreement;

         (c)      If the lenders party to the Loan Agreement become secured or,
                  if already secured, the lenders obtain additional security
                  thereunder and Party A, in its capacity as a party to this
                  Agreement and any Transaction hereunder, is not entitled to
                  the same rights, privileges, and interest in the collateral
                  and/or guaranty agreements as the lenders are entitled to
                  under the Loan Agreement;

         (d)      If there is a default, an event of default, or other similar
                  condition or event (however described) in relation to Party B
                  under the Loan Agreement (without regard to the existence of
                  any waiver or forbearance agreement with respect thereto); and

         (e)      If the Loan Agreement is amended, restated, supplemented, or
                  otherwise modified and Party A does not consent, in its sole
                  discretion, to such amendment, restatement, supplement, or
                  other modification.

         Party A may exercise such right to terminate, at any time in its sole
         discretion, following the occurrence of any one of such events through
         the Termination Date. A failure or delay in exercising the foregoing
         right to terminate will not be presumed to operate as a waiver, and a
         single or partial exercise of such right will not be presumed to
         preclude any subsequent or further exercise of that right.


                                       21


<PAGE>





                                     Part 5
                                  Miscellaneous

1.       Notices. For purposes of Section 12 of this Agreement:

         (a)      The address for notice or communication to Party A is:

                  SunTrust Capital Markets, Inc.
                  Financial Risk Management, Operations
                  303 Peachtree Street, N.E.
                  23rd Floor, Center Code 3913
                  Atlanta, GA  30308
                  404-575-2696 (phone)
                  404-532-0514 (fax)

        (b)       The address for notice or communication to Party B is:

                  Mr. Cory T. Walker
                  Chief Financial Officer
                  Brown & Brown, Inc.
                  220 S. Ridgewood Ave.
                  Daytona Beach, FL  32114
                  386-239-7250 (phone)
                  386-239-7252 (fax)

2.       Governing Law. Section 13(a) of this Agreement is hereby restated as
         follows:

                  "(a) Governing Law. This Agreement will be governed by and
                  construed in accordance with the laws of the State of New
                  York without reference to choice of law doctrine."

3.       Jurisdiction. Section 13(b)(i) of this Agreement is hereby restated as
         follows:

                  "(i) submits to the nonexclusive jurisdiction of the courts of
                  the State of Georgia and the United States District Court
                  located in Atlanta, Georgia; and"

4.       Process Agent. Process Agent shall not apply to this Agreement.

5.       Offices. The provisions of Section 10(a) of this Agreement shall not
         apply to either party.

6.       Multibranch Party. For purposes of Section 10(c) of this Agreement,
         neither Party A nor Party B is a Multibranch Party.

7.       Credit Support Provider.

         Credit Support Provider means in relation to Party A: Not applicable.
         Credit Support Provider means in relation to Party B: The party, as of
         any particular time and as may be acceptable to Party A, whose
         undertakings or assets under the Credit Support Document secure the
         timely performance of Party B's obligations under this Agreement.

8.       Credit Support Document.

         Credit Support Document means in relation to Party A: Not applicable.
         Credit Support Document means in relation to Party B: Any guaranty,
         letter of credit, credit agreement, security agreement, mortgage, deed
         of trust, pledge agreement, assignment agreement, investment agreement,
         surety bond, or other credit enhancement device, or any combination
         thereof issued as security for the timely performance of Party B's
         obligations under this Agreement, as may be acceptable to Party A,
         including, without limitation, any amendments, supplements,
         restatements, or other modifications, or any substitutions or
         replacements thereto in form and substance satisfactory to Party A.


                                       22


<PAGE>





                                     Part 6
                              Additional Agreements

1.       Recording of Conversations. Each party (i) consents to the monitoring
         or recording, at any time and from time to time, by the other party of
         any and all communications between officers or employees of the
         parties, (ii) waives any further notice of such monitoring or
         recording, and (iii) agrees to notify (and, if required by law, obtain
         the consent of) its officers and employees with respect to such
         monitoring or recording.

2.       Mediation and Arbitration. Notwithstanding anything to the contrary
         contained herein, the parties agree to submit to mediation and, should
         settlement through mediation not occur, to arbitration any and all
         claims, disputes, and controversies between them (and their respective
         employees, officers, directors, affiliates, attorneys, and other
         agents) resulting from or arising out of this Agreement. Such
         mediation and arbitration shall proceed in the jurisdiction where
         Party A is located, shall be governed by the law specified in this
         Agreement, and shall be conducted (a) in accordance with such rules as
         may be agreed upon by the parties or (b) in the event the parties do
         not reach an agreement as to such rules within thirty (30) days after
         a notice of dispute, in accordance with the Commercial Mediation Rules
         and Commercial Arbitration Rules of the American Arbitration
         Association. If, within thirty (30) days after service of a written
         demand for mediation, the mediation does not result in settlement of
         the dispute, then any party may demand arbitration, and the decision
         of the arbitrator(s) shall be binding on the parties. Judgment upon
         the award rendered by the arbitrator(s) may be entered in any court
         having jurisdiction. It is agreed that the arbitrators shall have no
         authority to award treble, exemplary, or punitive damages of any type
         under any circumstances, whether or not such damages may be available
         under state or federal law, or under the Federal Arbitration Act, or
         under the Commercial Arbitration Rules of the American Arbitration
         Association, the parties hereby waiving their right, if any, to
         recover any such damages.

3.       Set Off. Section 6 of the Agreement is amended by adding the following
         new subsection 6(f):

                  "(f) RIGHT OF SET-OFF. Upon the occurrence of an Event of
                  Default with respect to Party B, or an Illegality or Credit
                  Event Upon Merger where Party B is the Affected Party, Party A
                  will have the right (but not the obligation), without prior
                  notice to Party B or any other person, to set-off any
                  obligation of Party A or any of Party A's present or future
                  Affiliates, branches, or offices owing to Party B, against any
                  obligation of Party B owing to Party A or any of Party A's
                  present or future Affiliates, branches, or offices (whether or
                  not such obligations arise under this Agreement, whether or
                  not matured, whether or not contingent, and regardless of the
                  place of payment or booking office of the obligations). In
                  order to enable Party A to exercise its rights of set-off, if
                  an obligation is unascertained, Party A may in good faith
                  estimate that obligation and set-off in respect of the
                  estimate, subject to Party A accounting to Party B when the
                  obligation is ascertained.

                  Nothing in this Section 6(f) shall be effective to create a
                  charge or other security interest. This Section 6(f) shall be
                  without prejudice and in addition to any right of set-off,
                  combination of accounts, lien, or other right to which any
                  party is at any time otherwise entitled (whether by operation
                  of law, contract, or otherwise)."

4.       By signing this Schedule, Party B acknowledges that it has received and
         understands the SunTrust Bank "Terms of Dealing for OTC Risk Management
         Transactions" and the "Risk Disclosure Statement for OTC Risk
         Management Transactions" (each attached hereto and incorporated by
         reference into this Agreement).


                                       23


<PAGE>





Please confirm your agreement to the terms of the foregoing Schedule by signing
below.


SUNTRUST BANK                                    BROWN & BROWN, INC.


By:                                              By:
   ------------------------------                   ---------------------------
Name:                                            Name:
Title:                                           Title:


                                       24


<PAGE>





                           SUNTRUST BANK ("SUNTRUST")
             TERMS OF DEALING FOR OTC RISK MANAGEMENT TRANSACTIONS


In connection with the negotiation, entry into, and performance from time to
time of over-the-counter ("OTC") risk management transactions, please be advised
that:

SunTrust acts as principal only and does not act as advisor, agent, broker, or
fiduciary for or with respect to any counterparty (unless otherwise expressly
agreed in a written engagement letter).

SunTrust expects that its counterparties have the authority and capacity to
enter into and perform their obligations under their OTC risk management
transactions with SunTrust, and SunTrust relies on the express and implied
representations of its counterparties with respect thereto.

SunTrust expects that its counterparties possess adequate knowledge and
experience to assess independently, or with the assistance of their own
advisors, the merits and risks of each OTC risk management transaction that the
counterparty may from time to time enter into, amend, or terminate.

SunTrust endeavors to maintain the confidentiality of all confidential
counterparty information and expects its counterparties to do the same. Unless a
counterparty gives SunTrust written notice to the contrary, each counterparty
authorizes SunTrust and all SunTrust affiliates, including SunTrust Capital
Markets, Inc. (STCM), to share with each other confidential information
concerning a counterparty and/or its accounts for marketing or other purposes
from time to time. Any trade ideas, term sheets, and other similar documents
sent to counterparties by SunTrust are not to be shared with others.

SunTrust may pay fees, commissions, and other amounts to agents, brokers, and/or
other third parties in connection with OTC risk management transactions entered
into with counterparties. SunTrust considers the amount of such fees,
commissions, and other amounts to be confidential and does not disclose the same
to its counterparties.

SunTrust may from time to time receive orders for similar or identical
transactions, and SunTrust makes no representation with respect to execution
priorities.

STCM's Authorized Officers have the authority to bind SunTrust in connection
with OTC risk management transactions. A current list of Authorized Officers may
be obtained from STCM upon request.

OTC risk management obligations of SunTrust are not FDIC insured.


                                       25


<PAGE>





                           SUNTRUST BANK ("SUNTRUST")
         RISK DISCLOSURE STATEMENT FOR OTC RISK MANAGEMENT TRANSACTIONS


Over-the-counter ("OTC") risk management transactions, like other financial
transactions, involve a variety of significant potential risks. OTC risk
management transactions generally include options, forwards, swaps, swaptions,
caps, floors, collars, combination and variations of such instruments, and other
executory contractual arrangements, and may involve interest rates, currencies,
securities, commodities, equities, credit, indices, and other underlying
interests.

Before entering into any OTC risk management transaction, you should carefully
consider whether the transaction is appropriate for you in light of your
experience, objectives, financial and operational resources, and other relevant
circumstances. You should also ensure that you fully understand the nature of
the transaction and contractual relationship into which you are entering and the
nature and extent of your exposure to risk of loss, which may significantly
exceed the amount of any initial payment or investment by you.

The specific risks presented by a particular OTC risk management transaction
necessarily depend upon the character of the specific transaction and your
circumstances. In general, however, all OTC risk management transactions involve
the risk of adverse or unanticipated market developments, risk of illiquidity
and credit risk, and may involve other material risks. Equity risk management
transactions may increase or decrease in value with a change in, among other
things, stock prices and interest rates which could result in unlimited loss. In
addition, you may be subject to internal operational risks in the event that
appropriate internal systems and controls are not in place to monitor the
various risks and funding requirements to which you are subject by virtue of
your activities in the OTC risk management and related markets. OTC risk
management transactions frequently are tailored to permit parties to customize
transactions to accomplish complex financial and risk management objectives.
Such customization can also introduce significant risk factors of a complex
character.

As in any financial transaction, you must understand the requirements (including
investment restrictions), if any, applicable to you that are established by your
regulators or by your Board of Directors or other governing body. You should
also consider the tax and accounting implications of entering into any risk
management or other transaction. To the extent appropriate in light of the
specific transaction and your circumstances, you should consider consulting such
advisers as may be appropriate to assist you in understanding the risks
involved. If you are acting in the capacity of financial adviser or agent, you
must evaluate the foregoing matters in light of the circumstances applicable to
your principal.

In entering into any OTC risk management transaction, you should also take into
consideration that, unless you and SunTrust have established in writing an
express financial advisory or other fiduciary relationship or you and SunTrust
have expressly agreed in writing that you will be relying on SunTrust's
recommendations as the primary basis for making your trading or investment
decisions, SunTrust is acting solely in the capacity of an arm's-length
contractual counterparty and not in the capacity of your financial advisor or
fiduciary. In addition, SunTrust or its affiliates may from time to time have
substantial long or short positions in and may make a market in or otherwise buy
or sell instruments identical or economically related to the OTC risk management
transaction entered into with you or may have an investment banking or other
commercial relationship with the issuer of any security or financial instrument
underlying an OTC risk management transaction entered into with you.

THIS BRIEF STATEMENT DOES NOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT
ASPECTS OF ENTERING INTO OTC RISK MANAGEMENT TRANSACTIONS. YOU SHOULD REFRAIN
FROM ENTERING INTO ANY SUCH TRANSACTION UNLESS YOU FULLY UNDERSTAND ALL SUCH
RISK AND HAVE INDEPENDENTLY DETERMINED THAT THE TRANSACTION IS APPROPRIATE FOR
YOU.


                                       26

<PAGE>
-------------------------------------------------------------------------------

[SUNTRUST ROBINSON HUMPHREY LETTERHEAD]


303 Peachtree Street, N.E.
23rd Floor, Center Code 3913
Atlanta, Georgia  30308
Member NASD and SIPC

                                                               December 6, 2001

                   CONFIRMATION OF INTEREST RATE TRANSACTION

THIS LETTER AGREEMENT SHOULD BE REVIEWED, EXECUTED BY AN AUTHORIZED PERSON(S),
               AND RETURNED IMMEDIATELY VIA FAX TO 404-532-0514.
       (PLEASE DIRECT ANY QUESTIONS TO KEN KUYKENDALL AT 404-532-0303.)

Cory T. Walker
Chief Financial Officer
Brown & Brown, Inc.
220 S. Ridgewood Ave.
Daytona Beach, Florida  32114
Ph#:     386-239-7250
Fax#:    386-239-7252

REF:     13932

Dear Mr. Walker:

         The purpose of this letter agreement is to set forth the terms and
conditions of the Rate Transaction entered into between Brown & Brown, Inc.
("Counterparty" or "you") and SunTrust Bank ("SunTrust" or "us") on the Trade
Date specified below (the "Transaction"). SunTrust Capital Markets, Inc. acts
as agent on behalf of SunTrust with respect to this Transaction. This letter
agreement constitutes a "Confirmation" as referred to in the ISDA Master
Agreement to be entered into by the parties hereto (see Section 2(a) below).

         The definitions and provisions contained in the 1991 ISDA Definitions
published by the International Swap and Derivatives Association, Inc. ("ISDA"),
as amended and supplemented by the 1998 Supplement to the 1991 ISDA Definitions
(the "Definitions"), are incorporated by reference into this Confirmation. In
the event of any inconsistency between the Definitions and this Confirmation,
this Confirmation shall govern.

         This Confirmation supplements, forms a part of, and is subject to the
ISDA Master Agreement, as amended and supplemented from time to time (the "Swap
Agreement"), between you and us. All provisions contained or incorporated by
reference in the Swap Agreement shall govern this Confirmation except as
expressly modified below. Prior to the execution and delivery of such Swap
Agreement, this Confirmation alone shall constitute a complete and binding
agreement with respect to the Transaction.

         Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in (or refrained from engaging in) substantial
financial transactions and has taken other material actions in reliance upon
the parties' entry in the Transaction to which this Confirmation relates on the
terms and conditions set forth below.



<PAGE>
                                                                              2


         This Confirmation shall be governed by and construed in accordance
with the laws of the State of New York without reference to choice of law
doctrine.

1.       The terms of the particular Transaction to which this Confirmation
         relates are as follows:

         Type of Transaction:       Swap Transaction

         Notional Amount:           $77,142,857.16 amortizing (see attached
                                    Schedule A)

         Trade Date:                December 5, 2001

         Effective Date:            January 2, 2002

         Termination Date:          December 31, 2007, with adjustment in
                                    accordance with the Modified Following
                                    Business Day Convention

         FIXED AMOUNTS:

         Fixed Rate Payer:          Counterparty

         Fixed Rate Payer
         Payment Dates:             The last day of each March, June,
                                    September, and December, beginning March
                                    31, 2002, through and including the
                                    Termination Date, subject to adjustment in
                                    accordance with the Modified Following
                                    Business Day Convention

         Fixed Rate:                4.53% per annum

         Fixed Rate Day Count
         Fraction:                  Actual/360

         Adjustment to Period
         End Dates:                 Applicable

         FLOATING AMOUNTS:

         Floating Rate Payer:       SunTrust

         Floating Rate Payer
         Payment Dates:             The last day of each March, June,
                                    September, and December, beginning March
                                    31, 2002, through and including the
                                    Termination Date, subject to adjustment in
                                    accordance with the Modified Following
                                    Business Day Convention

         Floating Rate for
         initial Calculation
         Period:                    To be determined

         Floating Rate Day
         Count Fraction:            Actual/360

         Designated Maturity:       3 month



<PAGE>
                                                                              3


         Floating Rate Option:      USD-LIBOR-BBA

         Spread:                    Inapplicable

         Adjustment to Period
         End Dates:                 Applicable

         Reset Dates:               The first day of each Floating Rate Payer
                                    Calculation Period

         Calculation Agent:         SunTrust

         Business Days:             New York


2.       Other Provisions

         (a)      Subject to the terms, conditions and limitations of any other
         agreement between the parties, SunTrust shall have the right, but not
         the obligation, to terminate this Transaction if seventy-five (75)
         days have elapsed since the Trade Date and the Swap Agreement has not
         been executed by you and received by SunTrust. If this right to
         terminate is exercised, SunTrust will be entitled to receive from you
         or will be required to pay to you the fair market value for such
         termination as determined by SunTrust in good faith and in accordance
         with market practice and its own customary procedures.

         (b)      You agree to provide us (i) corporate resolutions, and (ii) a
         certificate of incumbency with respect to the individual(s) executing
         this Confirmation, both documents evidencing your authority to enter
         into this Transaction. This provision shall constitute an additional
         Agreement for the purpose of Section 4 of the Swap Agreement.

         (c)      By signing this Confirmation, you acknowledge that you have
         received and understand the SunTrust Bank "Terms of Dealing for OTC
         Risk Management Transactions" and the "Risk Disclosure Statement for
         OTC Risk Management Transactions" (each attached hereto and
         incorporated by reference into this Confirmation).

         (d)      "Loan Agreement" shall mean each agreement, related by its
         terms to this Transaction, to which you (as borrower) and SunTrust (or
         one of its Affiliates) are or hereafter become parties (and to which
         other lenders may be parties) involving the making of loans,
         extensions of credit or financial accommodations thereunder or
         commitments therefor, as the same exists on the Trade Date and without
         regard to (i) any termination or cancellation thereof, whether by
         reason of payment of all indebtedness incurred thereunder or
         otherwise, or (ii) unless consented to in writing by SunTrust, any
         amendment, modification, addition, waiver or consent thereto or
         thereof.



<PAGE>
                                                                              4


3.       Account Details

         Payment to Counterparty:

         Depository:                [PLEASE ADVISE]
         ABA #
         Favor of:
         Account #

         Payments to SunTrust:

         SunTrust Bank
         ABA # 061000104
         FBO:  Bond Wire Clearing
         Account # 9088-0000-95
         Attn: Financial Risk Management, Operations


4.       Offices

         (a)      The Office of Counterparty for the Transaction is its Daytona
         Beach office; and

         (b)      The Office of SunTrust for the Transaction is its Atlanta
         office.

         By signing below, you also acknowledge and agree that we have
explained to you the risks involved in this Transaction, which risks include
but are not limited to the following:

-        Market Risk: The risk that the Transaction may increase or decrease in
         value with a change in, among other things, interest rates or the
         yield curve; and

-        Liquidity Risk: The risk that the Transaction cannot be closed out or
         disposed of quickly at or near its value.

         You further acknowledge and agree that you understand these risks and
the Transaction as a whole, that you are capable of managing the risks
associated with this Transaction, that the risks involved in this Transaction
are consistent with your financial goals, policies and procedures, and risk
tolerance, and that you have determined that this Transaction is appropriate
for you.

         Please confirm that the foregoing correctly sets forth the terms of
our agreement by signing this copy of this Confirmation and immediately
returning it to SunTrust Capital Markets, Inc. via fax at the number indicated
on Page 1.

Very truly yours,                   Accepted and Confirmed as of the date
                                    first written:

SUNTRUST BANK                       BROWN & BROWN, INC.


By:                                 By:
   ---------------------------         ----------------------------------------
   Fred D. Woolf                       Name:
   Vice President                      Title:



<PAGE>
                                                                              5


                            AMORTIZATION SCHEDULE A*



<TABLE>
<CAPTION>
   PERIOD BEGIN                          PERIOD END                          NOTIONAL AMOUNT
   ------------                          ----------                          ---------------
   <S>                                   <C>                                 <C>
     2-Jan-02                            29-Mar-02                            77,142,857.16
    29-Mar-02                            28-Jun-02                            73,928,571.45
    28-Jun-02                            30-Sep-02                            70,714,285.74
    30-Sep-02                            31-Dec-02                            67,500,000.03
    31-Dec-02                            31-Mar-03                            64,285,714.32
    31-Mar-03                            30-Jun-03                            61,071,428.61
    30-Jun-03                            30-Sep-03                            57,857,142.90
    30-Sep-03                            31-Dec-03                            54,642,857.19
    31-Dec-03                            31-Mar-04                            51,428,571.48
    31-Mar-04                            30-Jun-04                            48,214,285.77
    30-Jun-04                            30-Sep-04                            45,000,000.06
    30-Sep-04                            31-Dec-04                            41,785,714.35
    31-Dec-04                            31-Mar-05                            38,571,428.64
    31-Mar-05                            30-Jun-05                            35,357,142.93
    30-Jun-05                            30-Sep-05                            32,142,857.22
    30-Sep-05                            30-Dec-05                            28,928,571.51
    30-Dec-05                            31-Mar-06                            25,714,285.80
    31-Mar-06                            30-Jun-06                            22,500,000.09
    30-Jun-06                            29-Sep-06                            19,285,714.38
    29-Sep-06                            29-Dec-06                            16,071,428.67
    29-Dec-06                            30-Mar-07                            12,857,142.96
    30-Mar-07                            29-Jun-07                             9,642,857.25
    29-Jun-07                            28-Sep-07                             6,428,571.54
    28-Sep-07                            31-Dec-07                             3,214,285.83
</TABLE>



*AMORTIZATION SCHEDULE A, subject to adjustment for the Period End Dates in
accordance with the Modified Following Business Day Convention.



<PAGE>
                                                                              6


                           SUNTRUST BANK ("SUNTRUST")
             TERMS OF DEALING FOR OTC RISK MANAGEMENT TRANSACTIONS


In connection with the negotiation, entry into, and performance from time to
time of over-the-counter ("OTC") risk management transactions, please be
advised that:

SunTrust acts as principal only and does not act as advisor, agent, broker, or
fiduciary for or with respect to any counterparty (unless otherwise expressly
agreed in a written engagement letter).

SunTrust expects that its counterparties have the authority and capacity to
enter into and perform their obligations under their OTC risk management
transactions with SunTrust, and SunTrust relies on the express and implied
representations of its counterparties with respect thereto.

SunTrust expects that its counterparties possess adequate knowledge and
experience to assess independently, or with the assistance of their own
advisors, the merits and risks of each OTC risk management transaction that the
counterparty may from time to time enter into, amend, or terminate.

SunTrust endeavors to maintain the confidentiality of all confidential
counterparty information and expects its counterparties to do the same. Unless
a counterparty gives SunTrust written notice to the contrary, each counterparty
authorizes SunTrust and all SunTrust affiliates, including SunTrust Capital
Markets, Inc. (STCM), to share with each other confidential information
concerning a counterparty and/or its accounts for marketing or other purposes
from time to time. Any trade ideas, term sheets, and other similar documents
sent to counterparties by SunTrust are not to be shared with others.

SunTrust may pay fees, commissions, and other amounts to agents, brokers,
and/or other third parties in connection with OTC risk management transactions
entered into with counterparties. SunTrust considers the amount of such fees,
commissions, and other amounts to be confidential and does not disclose the
same to its counterparties.

SunTrust may from time to time receive orders for similar or identical
transactions, and SunTrust makes no representation with respect to execution
priorities.

STCM's Authorized Officers have the authority to bind SunTrust in connection
with OTC risk management transactions. A current list of Authorized Officers
may be obtained from STCM upon request.

OTC risk management obligations of SunTrust are not FDIC insured.



<PAGE>
                                                                              7


                           SUNTRUST BANK ("SUNTRUST")
         RISK DISCLOSURE STATEMENT FOR OTC RISK MANAGEMENT TRANSACTIONS


Over-the-counter ("OTC") risk management transactions, like other financial
transactions, involve a variety of significant potential risks. OTC risk
management transactions generally include options, forwards, swaps, swaptions,
caps, floors, collars, combination and variations of such instruments, and
other executory contractual arrangements, and may involve interest rates,
currencies, securities, commodities, equities, credit, indices, and other
underlying interests.

Before entering into any OTC risk management transaction, you should carefully
consider whether the transaction is appropriate for you in light of your
experience, objectives, financial and operational resources, and other relevant
circumstances. You should also ensure that you fully understand the nature of
the transaction and contractual relationship into which you are entering and
the nature and extent of your exposure to risk of loss, which may significantly
exceed the amount of any initial payment or investment by you.

The specific risks presented by a particular OTC risk management transaction
necessarily depend upon the character of the specific transaction and your
circumstances. In general, however, all OTC risk management transactions
involve the risk of adverse or unanticipated market developments, risk of
illiquidity and credit risk, and may involve other material risks. Equity risk
management transactions may increase or decrease in value with a change in,
among other things, stock prices and interest rates which could result in
unlimited loss. In addition, you may be subject to internal operational risks
in the event that appropriate internal systems and controls are not in place to
monitor the various risks and funding requirements to which you are subject by
virtue of your activities in the OTC risk management and related markets. OTC
risk management transactions frequently are tailored to permit parties to
customize transactions to accomplish complex financial and risk management
objectives. Such customization can also introduce significant risk factors of a
complex character.

As in any financial transaction, you must understand the requirements
(including investment restrictions), if any, applicable to you that are
established by your regulators or by your Board of Directors or other governing
body. You should also consider the tax and accounting implications of entering
into any risk management or other transaction. To the extent appropriate in
light of the specific transaction and your circumstances, you should consider
consulting such advisers as may be appropriate to assist you in understanding
the risks involved. If you are acting in the capacity of financial adviser or
agent, you must evaluate the foregoing matters in light of the circumstances
applicable to your principal.

In entering into any OTC risk management transaction, you should also take into
consideration that, unless you and SunTrust have established in writing an
express financial advisory or other fiduciary relationship or you and SunTrust
have expressly agreed in writing that you will be relying on SunTrust's
recommendations as the primary basis for making your trading or investment
decisions, SunTrust is acting solely in the capacity of an arm's-length
contractual counterparty and not in the capacity of your financial advisor or
fiduciary. In addition, SunTrust or its affiliates may from time to time have
substantial long or short positions in and may make a market in or otherwise
buy or sell instruments identical or economically related to the OTC risk
management transaction entered into with you or may have an investment banking
or other commercial relationship with the issuer of any security or financial
instrument underlying an OTC risk management transaction entered into with you.

THIS BRIEF STATEMENT DOES NOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT
ASPECTS OF ENTERING INTO OTC RISK MANAGEMENT TRANSACTIONS. YOU SHOULD REFRAIN
FROM ENTERING INTO ANY SUCH TRANSACTION UNLESS YOU FULLY UNDERSTAND ALL SUCH
RISK AND HAVE INDEPENDENTLY DETERMINED THAT THE TRANSACTION IS APPROPRIATE FOR
YOU.


<PAGE>
                                                                    EXHIBIT 10q
                            ASSET PURCHASE AGREEMENT

         This ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of October
3, 2001, is made and entered into by and among BROWN & BROWN OF LEHIGH VALLEY,
INC., a Pennsylvania corporation ("Buyer"); APOLLO FINANCIAL CORPORATION, a
Pennsylvania corporation d/b/a AFC Insurance ("Seller"); and WILLIAM H. LEHR, a
resident of the Commonwealth of Pennsylvania, and PATSY A. LEHR, a resident of
the Commonwealth of Pennsylvania (each a "Shareholder" and collectively, the
"Shareholders").

                                   BACKGROUND

         Seller is engaged in the insurance agency business in Bethlehem,
Pennsylvania (the "Business"), and wishes to sell certain of its assets relating
to such Business to Buyer. Buyer desires to acquire such assets upon the terms
and conditions expressed in this Agreement. The Shareholders own all of the
outstanding capital stock of Seller and is entering into this Agreement to
provide certain non-competition, indemnification and other assurances to Buyer
as a material inducement for Buyer to enter into this transaction.

         THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements set forth herein, the sufficiency of which
is hereby acknowledged, the parties agree
 as follow:

                                    ARTICLE 1
                                 THE ACQUISITION

         Section 1.1       COVENANTS OF SALE AND PURCHASE. At the Closing (as
defined in SECTION 2.1), and upon and subject to the terms and conditions of
this Agreement, the parties mutually covenant and agree as follows:

                  (a)      Seller will sell, convey and assign to Buyer all
right, title and interest of Seller in and to the Acquired Assets (as defined in
SECTION 1.2) free and clear of all liens, pledges, security interests, charges,
restrictions or encumbrances of any nature whatsoever except as set forth in
Schedule 1.1(a); and

                  (b)      Buyer will purchase the Acquired Assets from Seller
in exchange for the consideration described in SECTION 1.4.

         Section 1.2       THE ACQUIRED ASSETS. In this Agreement, the phrase
"Acquired Assets" means all of the assets of Seller described below:

                  (a)      Purchased Book of Business. All of Seller's insurance
agency business, including but not limited to the life, health, bond, and
property and casualty insurance business (both personal and commercial lines)
and renewals and expirations thereof, together with all written or otherwise
recorded documentation, data or information relating to Seller's insurance
agency business, whether compiled by Seller or by other agents or employees of
Seller, including but not limited to: (i) lists of insurance companies and
records pertaining thereto; and



<PAGE>
(ii) customer lists, prospect lists, policy forms, and/or rating information,
expiration dates, information on risk characteristics, information concerning
insurance markets for large or unusual risks, and all other types of written or
otherwise recorded information customarily used by Seller or available to
Seller, including all other records of and pertaining to the accounts and
customers of Seller, past and present, including, but not limited to, the active
insurance customers of Seller, all of whom are listed on Schedule 1.2(a)
(collectively, the "Purchased Book of Business").

                  (b)      General Intangibles. All of the following intangible
personal property used in connection with Seller's insurance agency business or
pertaining to the Acquired Assets:

                           (i)      all of Seller's business records necessary
to enable Buyer to renew the Purchased Book of Business;

                           (ii)     the goodwill of Seller's insurance agency
business, including the name "AFC Insurance" and all derivatives thereof, and
any other fictitious names and trade names that are currently in use by Seller,
and all telephone listings, post office boxes, mailing addresses, and
advertising signs and materials; and

                           (iii)    any assignable non-solicitation agreements
and covenants not to compete made by employees of Seller and all other
assignable covenants not to compete in favor of Seller; provided, however, that
Buyer and Seller agree that due to Shareholders' continuing involvement and
interest in the business after the Closing Date, Seller shall retain such
continuing interest in the enforcement of the assigned non-solicitation
agreements and covenants not to compete as shall be necessary to the joint
enforcement of such provisions referenced in SECTION 4.9.

                  (c)      Miscellaneous Items. All other assets of Seller
relating or pertaining to the Purchased Book of Business, including computer
disks, server, software, databases (whether in the form of computer tapes or
otherwise), related object and source codes, and associated manuals, and any
other records or media of storage or programs for retrieval of information
pertaining to the Purchased Book of Business, and all supplies and materials,
including promotional and advertising materials, brochures, plans, supplier
lists, manuals, handbooks, and related written data and information, including
any customer deposits held for future due dates.

                  (d)      Tangible Property. All items of furniture, fixtures,
computers, office equipment and other tangible property used in Seller's
business. To the extent that any of such items are subject to a lease as set
forth in Schedule 1.2(d), Buyer will assume the lease and acquire all of
Seller's right to acquire such property upon termination of the lease.

                  (e)      Assigned Agreements. All of Seller's rights under the
leases and agreements identified in Schedule 1.2(e) hereof (the "Assigned
Agreements").

         Section 1.3       EXCLUSIONS AND EXCEPTIONS. Seller does not agree to
sell or assign, and Buyer does not agree to purchase or assume, any assets not
described in SECTION 1.2 hereof. Without limiting the foregoing, Buyer shall not
purchase or assume any of the following:


                                       2

<PAGE>

                  (a)      cash in hand or in banks, certificates of deposits or
any interest accrued thereon, accounts receivable, life insurance policies
relating to Shareholders or proceeds thereof, money market certificates, stocks,
bonds, real estate and automobiles;

                  (b)      any contract, lease or other obligation not
specifically assigned to Buyer under this Agreement;

                  (c)      as set forth in more detail in SECTION 4.9, any duty
or liability of any type whatsoever with respect to any employee or to any
pension or profit sharing plan or other employee benefit;

                  (d)      corporate minutes books and stock books;

                  (e)      all non-transferable permits;

                  (f)      claims for refunds of taxes and other governmental
charges to the extent such refunds relate to periods ending prior to the
Effective Date; or

                  (g)      any bonus, incentive, or advance payments received by
Seller in connection with the Assigned Agreements (except with respect to any
contingent commissions as set forth in SECTION 1.5).

         Section 1.4       PURCHASE PRICE. (a) The purchase price for the
Acquired Assets (the "Purchase Price") shall be equal to the sum of (i)
$1,405,542.00, which equals (A) one and one-half (1.5) times (B) the Core
Revenue (as defined herein) received by Seller from the Purchased Book of
Business in the twelve-month period ended September 30, 2001 ("2001 Core
Revenue"), plus (ii) an amount equal to seventy-five one-hundredths (0.75) times
the excess of Operating Profit (as defined herein), if any, received by Buyer
from the Purchased Book of Business in the twelve-month period ending December
31, 2002, over a base amount equal to $234,257.00 (the "Base Amount"), which
Base Amount the parties agree equals twenty-five percent (25%) of 2001 Core
Revenue.

                  (b)      As used herein, the term:

                           (i)      "Core Revenue" means  commission  revenue
net of any commissions paid to any third party producing agent or agency, or to
any third party broker (plus as interest income equal to one percent (1%) of
such actual commission revenue), but shall not include contingent commissions,
override commissions, first year life insurance commissions or any income item
(such as countersignature fees) other than earned commissions and fees earned in
lieu of commissions. Revenues generated from any one account shall not be
included more than once in any twelve-month period in determining Core Revenue
for such period. Core Revenue will be determined in accordance with generally
accepted accounting principles. Specifically, direct bill revenue is recognized
when received (cash basis) and agency bill revenue is recognized on the later of
the effective date of the policy installment or the date the installment is
billed to the customer; and


                                       3

<PAGE>
                           (ii)     "Operating Profit" shall mean the excess of
revenues over expenses, determined in accordance with generally accepted
accounting principles and the usual methods and conventions of accounting used
by Buyer. Among other things, direct bill commission revenue shall be deemed to
be earned on the cash method and agency bill commission income shall be deemed
to be earned on the later of the effective date of the policy or policy billing
date. Expenses shall include all standard corporate charges of Buyer, including
an overhead charge based on net retained revenues (which shall be set at four
percent (4.0%) for purposes of determining the Purchase Price), charges for
insurance coverages, the profit center bonus for the applicable period, and
charges for accounts receivable aged over fifty-nine (59) days pursuant to
Buyer's bad debt policy, but shall not include income taxes or amortization.

                  (c)      Subject to SECTION 1.4(D), the Purchase Price will be
paid to Seller as follows: (i) $1,124,000.00, which equals ninety percent (90%)
of the portion of the Purchase Price set forth in SECTION 1.4(A)(I), shall be
paid to Seller on the Closing Date; and (ii) $140,554.00, representing the
remaining portion of the Purchase Price under SECTION 1.4(A)(I) (the "Holdback
Amount") plus the remaining portion of the Purchase Price under SECTION
1.4(A)(II), will be paid to Seller on or before January 31, 2003. At Seller's
request, Buyer shall provide Seller with complete financial records in order to
permit Seller to confirm the amount of the Purchase Price amount payable under
clause (II) above.

                  (d)      In accordance with ARTICLE 7 hereof, the Holdback
Amount shall be delivered by Buyer at Closing to Fitzpatrick Lentz & Bubba,
P.C., which shall act as escrow agent. The Holdback Amount and the remaining
portion of the Purchase Price under SECTION 1.4(A)(II) shall each be subject to
reduction by Buyer to offset any obligations of Seller and the Shareholders
under the indemnification provisions contained in ARTICLE 6 hereof. Satisfaction
of any indemnity obligations from the deferred portion of the Purchase Price
shall not operate to waive the indemnification obligations of Seller and the
Shareholders contained in ARTICLE 6 for damages incurred by Buyer in excess of
such amounts; provided, however, that the Holdback Amount shall be credited
against the total aggregate liability of Seller and the Shareholders referred to
in SECTION 6.6 hereof.

                  (e)      For federal and state income tax purposes, the
parties agree to allocate the Purchase Price as follows: (i) $75,000.00 of the
Purchase Price shall be allocated to the tangible property described in SECTION
1.2(D); (ii) $10,000.00 shall be allocated to the covenants of Seller,
$10,000.00 shall be allocated to the covenants of Shareholder William H. Lehr,
and $30,000.00 shall be allocated to the covenants of Shareholder Patsy A. Lehr,
contained in SECTION 4.2 hereof, and (iii) the remainder of the Purchase Price
shall be allocated to the Purchased Book of Business and related goodwill. The
parties shall execute corresponding IRS Form 8594s at Closing to confirm the
allocation of the Purchase Price.

         Section 1.5       COMMISSIONS COLLECTED. All commissions on
installments of agency bill policies with an effective date prior to October 1,
2001 (the "Effective Date") and actually billed prior to such date shall be the
property of Seller and those billed or effective on or after the Effective Date
shall be the property of Buyer, regardless of when actually received. All
commissions on direct bill policies actually received by Seller from insurance
carriers before the


                                       4

<PAGE>
Effective Date shall be the property of Seller and those actually received from
insurance carriers on or after the Effective Date shall be the property of
Buyer, regardless of when billed by the insurance carrier. Buyer shall be
entitled to all contingent commissions and/or override commissions received on
or after the Effective Date, regardless of when earned. All additional or return
commissions as a result of audits actually received before the Closing shall be
the property or the responsibility of Seller, whether credit or debit, and
regardless of effective date, and those actually received on or after the
Closing shall be the property or responsibility of Buyer, whether credit or
debit, and regardless of effective date.

         Section 1.6 NO ASSUMED LIABILITIES. Except for the ongoing obligation
to service the Purchased Book of Business or any obligation otherwise expressly
assumed hereunder, Buyer shall not assume or be deemed to have assumed any
liability or obligation of Seller whatsoever.

                                    ARTICLE 2
                         CLOSING, ITEMS TO BE DELIVERED,
                     FURTHER ASSURANCES, AND EFFECTIVE DATE

         Section 2.1       CLOSING. The consummation of the purchase and sale
of assets under this Agreement (the "Closing") will take place at 9 a.m., local
time, on October 3, 2001 (the "Closing Date"), at the offices of Fitzpatrick
Lentz & Bubba, P.C., located at 4001 Schoolhouse Lane, Center Valley,
Pennsylvania, unless another date or place is agreed to in writing by the
parties hereto.

         Section 2.2       CONVEYANCE AND DELIVERY BY SELLER. On the Closing
Date, Seller will surrender and deliver possession of the Acquired Assets to
Buyer and take such steps as may be required to put Buyer in actual possession
and operating control of the Acquired Assets, and in addition shall deliver to
Buyer such bills of sale and assignments and other good and sufficient
instruments and documents of conveyance, in form reasonably satisfactory to
Buyer, as shall be necessary and effective to transfer and assign to, and vest
in, Buyer all of Seller's right, title, and interest in and to the Acquired
Assets free and clear of any lien, charge, pledge, security interest,
restriction or encumbrance of any kind (except as set forth in Schedule 1.1(a).
Without limiting the generality of the foregoing, at the Closing, Seller shall
deliver to Buyer:

                  (a)      a Bill of Sale and Assignment, substantially in the
form of Exhibit 2.2(a), executed by Seller (the "Bill of Sale");

                  (b)      an Assignment and Assumption Agreement, substantially
in the form of Exhibit 2.2(b), with respect to the Assigned Agreements, executed
by Seller (the "Assignment and Assumption Agreement");

                  (c)      duly adopted resolutions of Seller's Board of
Directors satisfactory to Buyer in its reasonable discretion: (i) approving a
plan of asset transfer (the "Plan of Asset Transfer") and proposing same to the
Shareholders for their consideration and adoption, in accordance with Section
1932(b) of the Pennsylvania Business Corporation Law (the "PBCL"); (ii)
terminating Seller's Employee Benefit Plans; and (iii) directing the Seller's
401(k) Plan's Trustee to apply for a determination letter from the Internal
Revenue Service with respect to the termination of the


                                       5

<PAGE>
401(k) Plan and to submit a Notice of Intent to Terminate to all participants
and beneficiaries under 401(k) Plan (the "Seller's Board Resolutions"); and

                  (d)      duly adopted resolutions of the Shareholders,
adopting the Plan of Asset Transfer in accordance with Section 1932(b) of the
PBCL (the "Shareholder Resolutions").

         Section 2.3       DELIVERY BY BUYER.  On the Closing Date, Buyer will
deliver to Seller:

                  (a)      a wire transfer of immediately available funds to one
or more accounts designated in writing by Seller for the amount required to be
delivered at Closing pursuant to SECTION 1.4(B) hereof;

                  (b)      the Assignment and Assumption Agreement, executed by
Buyer;

                  (c)      a Promissory Note, substantially in the form of
Exhibit 2.3(c), with respect to the Holdback Amount, executed by Buyer (the
"Promissory Note"); and

                  (d)      duly adopted resolutions of Buyer's Board of
Directors, satisfactory to Seller in its reasonable discretion, approving the
transactions contemplated herein and Buyer's obligations under this Agreement.

         Section 2.4       MUTUAL PERFORMANCE. At the Closing, the parties shall
also deliver to each other the agreements and other documents referred to in
ARTICLE 4 hereof.

          Section 2.5      FURTHER ASSURANCES. From time to time after the
Closing, at Buyer's request, Seller will execute, acknowledge and deliver to
Buyer such other instruments of conveyance and transfer and will take such other
actions and execute and deliver such other documents, certifications and further
assurances as Buyer may reasonably request in order to vest more effectively in
Buyer, or to put Buyer more fully in possession of, any of the Acquired Assets.
Each of the parties hereto will cooperate with the others and execute and
deliver to the other parties such other instruments and documents and take such
other actions as may be reasonably requested from time to time by any other
party hereto as necessary to carry out, evidence and confirm the intended
purposes of this Agreement.

         Section 2.6       EFFECTIVE DATE. The Effective Date of this Agreement
and all related instruments executed at the Closing shall be October 1, 2001
unless otherwise specified. Notwithstanding the foregoing, Seller shall retain
the risk of loss for errors and omissions committed up until the Closing Date.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

I.       Seller and the Shareholders, jointly and severally when and where
applicable, represent and warrant to Buyer as follows:



                                       6

<PAGE>

         Section 3.1       ORGANIZATION. Seller is a corporation organized and
in good standing under the laws of the Commonwealth of Pennsylvania and its
status is active. Seller has all requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted. Seller is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the conduct of its insurance agency business requires it to be so
qualified.

         Section 3.2       CAPITALIZATION. The Shareholders own and hold all of
the outstanding shares of capital stock of Seller and there are no outstanding
options or rights to acquire additional shares of capital stock of Seller.

         Section 3.3       AUTHORITY. Seller has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of Seller. This Agreement has been, and the other agreements, documents
and instruments required to be delivered by Seller in accordance with the
provisions hereof (collectively, the "Seller's Documents") will be, duly
executed and delivered by duly authorized officers of Seller on behalf of
Seller, and this Agreement constitutes, and the Seller's Documents when executed
and delivered will constitute, the legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization or similar laws from time to
time in effect relating to or affecting the enforcement of creditors' rights
generally and general equitable principles.

         Section 3.4       CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the
execution, delivery or performance of this Agreement by Seller nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the provisions hereof will (a) conflict with or result in any breach
of any provision of its Articles of Incorporation or Bylaws, (b) require any
filing with, or permit, authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission, or other governmental or
other regulatory authority or agency (each a "Governmental Entity"), or (c)
except with respect to any consents which may be required pursuant to the
Assigned Agreements (other than Seller's agreement with Kempes or the addendum
regarding Seller to the agreement between the St. Paul Company and Henry S.
Lehr, Inc., each for which such consent has been obtained prior to Closing)
result in a violation or breach of, or constitute a default under, any of the
terms, conditions or provisions of any agreement or other instrument or
obligation to which Seller is a party or by which Seller or any of its
properties or assets may be bound.

         Section 3.5       NO THIRD PARTY OPTIONS. There are no existing
agreements, options, commitments, or rights with, of or to any person to acquire
any of Seller's securities, assets, properties or rights included in the
Acquired Assets or any interest therein.

         Section 3.6       FINANCIAL STATEMENTS. Seller has delivered to Buyer
true and complete copies of (a) its balance sheet at September 30, 2000 and the
related statement of income for the fiscal year then ended (the "2000 Financial
Statements"), and (b) its balance sheet at August 31, 2001 (the "Balance Sheet
Date") and the related statement of income for the eleven (11) months then ended
(the "Interim Financial Statements"). The 2000 Financial Statements were
prepared


                                       7

<PAGE>
in accordance with generally accepted accounting principles and the Interim
Financial Statements were prepared in accordance with Seller's standard internal
accounting methodology, in each case consistently applied throughout the periods
involved (subject, in the case of the Interim Financial Statements, to normal
recurring audit adjustments). Such balance sheets fairly present the
consolidated financial position, assets, and liabilities (whether accrued,
absolute, contingent or otherwise) of Seller at the dates indicated and such
statements of income fairly present the results of operations for the periods
then ended. Seller's financial books and records are accurate and complete in
all material respects. Except as set forth in Schedule 3.6, Seller has not
guaranteed any premium financing on behalf of its customers.

         Section 3.7       ORDINARY COURSE OF BUSINESS. Since the Balance Sheet
Date, Seller has carried on business in the usual, regular and ordinary course
in substantially the manner heretofore conducted and has taken no unusual
actions in contemplation of this transaction, except with the consent of Buyer.
Since the Balance Sheet Date, there have been no events or changes having an
adverse effect on Seller or the Acquired Assets. All of Seller's accounts
payable, including accounts payable to insurance carriers, are current and
reflected properly on its books and records, and will be paid in accordance with
their terms at their recorded amounts.

         Section 3.8       ASSETS. (a) Except as set forth in Schedule 1.1(a),
Seller owns and holds, free and clear of any lien, charge, pledge, security
interest, restriction, encumbrance or third-party interest of any kind
whatsoever (including insurance company payables), sole and exclusive right,
title and interest in and to the Acquired Assets, including but not limited to
the customer expiration records for those customers listed in Schedule 1.2(a),
together with the exclusive right to use such records and all customer accounts,
copies of insurance policies and contracts in force and all files, invoices and
records pertaining to the customers, their contracts and insurance policies, and
all other information comprising the Purchased Book of Business. Seller has not
received notice that any of the accounts listed in Schedule 1.2(a) has canceled
or non-renewed or intends to cancel or non-renew. Schedule 1.2(a) also shows the
revenue received by Seller from each of its appointed carriers in the
twelve-month period ended September 30, 2001. None of the accounts shown in
Schedule 1.2(a) represents business that has been brokered through a third
party.

                  (b)      The name "AFC Insurance" is the only trade name used
by Seller within the past three (3) years. No party has filed a claim during the
past three (3) years against Seller alleging that it has violated, infringed on
or otherwise improperly used the intellectual property rights of such party, or,
if so, the claim has been settled with no existing liability to Seller and, to
the Knowledge of Seller and the Shareholders (as defined in SECTION 7.3 hereof),
Seller has not violated or infringed any trademark, trade name, service mark,
service name, patent, copyright or trade secret held by others.

                  (c)      Schedule 3.8 lists all material contracts, agreements
and other written or verbal arrangements to which Seller is a party, including,
but not limited to, (i) any employment, non-compete, confidentiality or
non-solicitation agreement to which Seller or either of the Shareholders is a
party, (ii) any agreement relating to the purchase or sale of assets by Seller
within the past five (5) years, (iii) any agreement between Seller and either of
the Shareholders or between Seller and any officer, director or affiliate of
Seller, and (iv) any other contract or agreement not entered into in the
ordinary course of business. Seller has delivered true and


                                       8

<PAGE>
complete copies of each such agreement to Buyer and, in the case of unwritten
agreements, a true and complete summary of such arrangements. The parties to all
such agreements are in compliance with the terms thereof.

                  (d)      To the Knowledge of Seller and the Shareholders,
Seller's computer software included in the Acquired Assets performs in
accordance with the documentation and other written material used in connection
therewith, and is free of defects in programming and operation. Seller has
delivered to Buyer copies of all user and technical documentation related to
such software available to Seller.

         Section 3.9       LITIGATION AND CLAIMS. Except as disclosed in
Schedule 3.9, there is no suit, claim, action, proceeding or investigation
pending or, to the Knowledge of Seller and the Shareholders, threatened against
Seller and, to the Knowledge of Seller and the Shareholders, no circumstances
exist that could reasonably form a basis for such a suit, claim, action,
proceeding or investigation to be initiated or threatened. Seller is not subject
to any outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen, individually or in the aggregate, in the future would have
an adverse effect on Seller or the Acquired Assets or would prevent Seller from
consummating the transactions contemplated hereby. No voluntary or involuntary
petition in bankruptcy, receivership, insolvency or reorganization with respect
to Seller, or petition to appoint a receiver or trustee of Seller's property,
has been filed by or against Seller, nor will Seller file such a petition prior
to the Closing Date or for one hundred (100) days thereafter, and if such
petition is filed by others, the same will be promptly discharged. Seller has
not made any assignment for the benefit of creditors or admitted in writing
insolvency or that its property at fair valuation will not be sufficient to pay
its debts, nor will Seller permit any judgment, execution, attachment or levy
against it or its properties to remain outstanding or unsatisfied for more than
ten (10) days. Seller shall not become insolvent as a result of consummating the
transactions contemplated by this Agreement.

         Section 3.10      COMPLIANCE WITH APPLICABLE LAW. To the Knowledge of
Seller and the Shareholders, Seller holds all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities necessary for the
lawful conduct of the insurance agency business (collectively, the "Permits"),
and Seller is in compliance with the terms of the Permits. To the Knowledge of
Seller and the Shareholders, the business of Seller is not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity
(including, without limitation, the Gramm-Leach-Bliley Financial Services
Modernization Act of 1999 and any applicable federal or state regulations
promulgated pursuant thereto), except for possible violations that individually
or in the aggregate do not, and, insofar as reasonably can be foreseen, in the
future will not, have an adverse effect on its business. As of the date of this
Agreement, no investigation or review by any Governmental Entity with respect to
Seller is pending or, to the Knowledge of Seller and the Shareholders,
threatened.

         Section 3.11      TAX RETURNS AND AUDITS. Seller has timely filed all
federal, state, local and foreign tax returns, including all amended returns, in
each jurisdiction where Seller is required to do so or has paid or made
provision for the payment of any penalty or interests arising from the late
filing of any such return, has correctly reflected all taxes required to be
shown thereon, and has fully paid or made adequate provision for the payment of
all taxes that have been incurred or are due and payable pursuant to such
returns or pursuant to any assessment with respect to taxes in such
jurisdictions, whether or not in connection with such returns. Seller has not
received any notice that


                                       9

<PAGE>
it is or may become subject to any audits with respect to any federal, state,
local or foreign tax returns required to be filed, and there are no unresolved
audit issues with respect to prior years' tax returns. To the Knowledge of
Seller and the Shareholders, there are no circumstances or pending questions
relating to potential tax liabilities nor claims asserted for taxes or
assessments of Seller that, if adversely determined, could result in a tax
liability that would have a material adverse effect on Seller or the Acquired
Assets for any period. Seller has not executed an extension or waiver of any
statute of limitations on the assessment or collection of any tax due that is
currently in effect. Seller is not holding any unclaimed property that it is
required to surrender to any state taxing authority including, without
limitation, any uncashed checks or unclaimed wages, and Seller has timely filed
all unclaimed property reports required to be filed with such state taxing
authorities. Seller does not purge its records of uncashed checks periodically.

         Section 3.12      NON-SOLICITATION COVENANTS. Except as set forth in
Schedule 3.12, Neither Seller nor either of the Shareholders is a party to any
agreement that restricts Seller's or the Shareholder's ability to compete in the
insurance agency industry or solicit specific insurance accounts.

         Section 3.13      ERRORS AND OMISSIONS; EMPLOYMENT PRACTICES LIABILITY.
Except as set forth in Schedule 3.13, Seller has not incurred any liability or
taken or failed to take any action that may reasonably be expected to result in
(a) a liability for errors or omissions in the conduct of its insurance business
or (b) employment practices liability (EPL), except such liabilities as are
fully covered by insurance. All errors and omissions (E&O) and EPL lawsuits and
claims currently pending or threatened against Seller are set forth in Schedule
3.13. Seller has E&O insurance coverage in force, with minimum liability limits
of $5 million per claim and $6 million aggregate, with a deductible of
$10,000.00 per claim and $30,000.00 aggregate, and the Shareholders will provide
to Buyer a certificate of insurance evidencing such coverage prior to or on the
Closing Date. Seller has EPL insurance coverage in force, with minimum liability
limits of $1 million per claim and $1 million aggregate, with a deductible of
$2,500.00 per claim, and the Shareholders will provide to Buyer a certificate of
insurance evidencing such coverage prior to or on the Closing Date. Seller has
had the same or higher levels of E&O and EPL coverage continuously in effect for
at least the past five (5) years.

         Section 3.14      EMPLOYEE DISHONESTY COVERAGE. Schedule 3.14 sets
forth a complete and correct list of all employee dishonesty bonds or policies,
including the respective limits thereof, held by Seller in the three (3) year
period prior to the Closing Date, and true and complete copies of such bonds or
policies have been delivered to Buyer. Seller has complied with all the
provisions of such bonds or policies and Seller has an employee dishonesty bond
or policy in full force and effect as of the Closing Date.

         Section 3.15      NO MISREPRESENTATIONS. None of the representations
and warranties of Seller and the Shareholders set forth in this Agreement or in
the attached Schedules, notwithstanding any investigation thereof by Buyer,
contains any untrue statement of a material fact, or omits the statement of any
material fact necessary to render the statements made not misleading.


                                       10


<PAGE>

II.      Buyer represents and warrants to Seller and the Shareholders as
follows:

         Section 3.16      ORGANIZATION. Buyer is a corporation organized and in
good standing under the laws of the Commonwealth of Pennsylvania and its status
is active. Buyer has all requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted. Buyer is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the conduct of its insurance agency business requires it to be so
qualified.

         Section 3.17      AUTHORITY. Buyer has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action on
the part of Buyer. This Agreement has been, and the other agreements, documents
and instruments required to be delivered by Buyer in accordance with the
provisions hereof (collectively, the "Buyer's Documents") will be, duly executed
and delivered by duly authorized officers of Buyer on behalf of Buyer, and this
Agreement constitutes, and the Buyer's Documents when executed and delivered
will constitute, the legal, valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization or similar laws from time to time in effect relating
to or affecting the enforcement of creditors' rights generally and general
equitable principles.

         Section 3.18      CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the
execution, delivery or performance of this Agreement by Buyer nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the provisions hereof will (a) conflict with or result in any breach
of any provision of its Articles of Incorporation or Bylaws, (b) require any
filing with, or permit, authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission, or other governmental or
other regulatory authority or agency (each a "Governmental Entity"), or (c)
result in a violation or breach of, or constitute a default under, any of the
terms, conditions or provisions of any agreement or other instrument or
obligation to which Buyer is a party or by which Buyer or any of its properties
or assets may be bound.

         Section 3.19      NO MISREPRESENTATIONS. None of the representations
and warranties of Buyer set forth in this Agreement, notwithstanding any
investigation thereof by Seller or the Shareholders, contains any untrue
statement of a material fact, or omits the statement of any material fact
necessary to render the statements made not misleading.

                                    ARTICLE 4
                              ADDITIONAL AGREEMENTS

         Section 4.1       BROKERS OR FINDERS. Each of the parties represents,
as to itself, its subsidiaries and its affiliates, that no agent, broker,
investment banker, financial advisor, or other firm or person is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement except
Berwind Financial, L.P. (any commissions or fees payable to which shall be the
sole responsibility of Seller), and each of the parties agrees to indemnify and
hold the others harmless from and against any and all claims, liabilities, or
obligations with respect to any fees, commissions, or expenses asserted by


                                       11

<PAGE>
any person on the basis of any act or statement alleged to have been made by
such party or its affiliate.

         Section 4.2       NON-COMPETITION COVENANTS. (a) Subject to SECTION
5.1(C), Seller and the Shareholders each agree that it, he or she, as the case
may be shall not, for a period of five (5) years beginning on the Closing Date,
engage in, or be or become the owner of an equity interest in, or otherwise
consult with, be employed by, or participate in the business of, any entity
(other than Buyer) engaged in the insurance agency business within a fifty
(50)-mile radius of Bethlehem, Pennsylvania. Without limiting the foregoing,
Seller and the Shareholders shall not, during such five-year period, (i)
solicit, divert, accept business from, nor service, directly or indirectly, as
insurance solicitor, insurance agent, insurance broker or otherwise, for his or
her account or the account of any other agent, broker, or insurer, either as
owner, shareholder, promoter, employee, consultant, manager or otherwise, any
account that is part of the Purchased Book of Business or any insurance account
then serviced by Buyer, or (ii) hire or directly or indirectly solicit any
employees of Buyer or its affiliates to work for Seller, the Shareholders or any
of their affiliates, or any company that competes with Buyer or its affiliates.
The Shareholders acknowledge that the non-solicitation covenants contained in
any employment agreement he or she may enter into with Buyer will be in addition
to, and will not supersede or be subordinate to, the non-competition and
non-solicitation covenants contained in this SECTION 4.2.

                  (b)      Notwithstanding anything in this Agreement to the
contrary, the covenants set forth in this SECTION 4.2 shall not be held invalid
or unenforceable because of the scope of the territory or actions subject hereto
or restricted hereby, or the period of time within which such covenants are
imperative; but the maximum territory, the actions subject to such covenants,
and the period of time in which such covenants are enforceable, respectively,
are subject to determination by a final judgment of any court which had
jurisdiction over the parties and subject matter.

         Section 4.3       REMEDY FOR BREACH OF COVENANTS. In the event of a
breach of the provisions of SECTION 4.2, Buyer shall be entitled to injunctive
relief as well as any other applicable remedies at law or in equity. Should a
court of competent jurisdiction declare any of the covenants set forth in
SECTION 4.2 unenforceable due to a unreasonable restriction, duration,
geographical area or otherwise, the parties agree that such court shall be
empowered and shall grant Buyer or its affiliates injunctive relief to the
extent reasonably necessary to protect their respective interests. Seller and
the Shareholders acknowledge that the covenants set forth in SECTION 4.2
represent an important element of the value of the Acquired Assets and were a
material inducement for Buyer to enter into this Agreement.

         Section 4.4       SUCCESSOR RIGHTS. The covenants contained in
SECTION 4.2 shall inure to the benefit of any successor in interest of Buyer by
way of merger, consolidation, sale or other succession.

         Section 4.5       ERRORS AND OMISSIONS, EMPLOYMENT PRACTICES LIABILITY,
AND EMPLOYEE DISHONESTY EXTENDING REPORTING ("TAIL") COVERAGE. On or prior to
the Closing Date, the Shareholders shall cause Seller to purchase, at Seller's
expense, a tail coverage extension on each


                                       12

<PAGE>
of Seller's errors and omissions (E&O), employment practices liability (EPL),
and employee dishonesty insurance policy (or employee dishonesty bond, as the
case may be). Such coverages shall extend for a period of at least five (5)
years from the Closing Date, shall have the same coverages and deductibles
currently in effect, and shall otherwise be in form reasonably acceptable to
Buyer. A certificate of insurance evidencing each such coverage shall be
delivered to Buyer at or prior to Closing.

         Section 4.6       EXPENSES. Whether or not the transaction contemplated
by this Agreement is consummated, all costs and expenses incurred in connection
with this Agreement and the transaction contemplated hereby shall be paid by the
party incurring such expenses.

         Section 4.7       CONFIDENTIALITY. The parties each agree to maintain
the terms of this Agreement, including the consideration payable by Buyer, in
strict confidence and shall not disclose such terms to any third party without
the prior written consent of Buyer, unless required to do so by law (including,
without limitation, applicable securities laws). Notwithstanding the foregoing,
Seller and the Shareholders acknowledge and agree that promptly after the
Closing, Buyer shall issue a press release, a copy of which shall have been
provided by Buyer to Seller and the Shareholders within a reasonable amount of
time in advance for their review and reasonable comment, which press release
shall, among other things, set forth Seller's estimated commission revenue for
the twelve-month period prior to Closing.

         Section 4.8       TERMINATION OF EMPLOYEES; REIMBURSEMENT OF BUSINESS
EXPENSES AND SEGREGATION OF REVENUES AFTER EFFECTIVE DATE. (a) Except as
otherwise provided in SECTION 4.8(B) below, Seller shall terminate the
employment of all of Seller's employees, effective as of the Effective Date.
Seller shall be responsible for all payments, unless such payments are the
responsibility of a third party (i.e., insurer), to all of Seller's employees
(whether or not terminated as of the Effective Date) for, and liabilities
associated with, all employee benefits and Employee Benefit Plans including, but
not limited to, vacation, bonuses, and sick leave benefits, accruing prior to
the Effective Date.

                  (b)      With respect to those employees who are employed by
Seller pursuant to a written employment agreement ("Contract Employees"), all of
which agreements are attached hereto collectively as Schedule 4.8(b), Seller
shall not terminate their employment as of the Effective Date. With respect to
such Contract Employees:

                           (i)      Seller and Buyer shall, at least two (2)
days prior to the scheduled Closing Date, jointly meet with each of the Contract
Employees and shall advise him/her that the employment agreements between Seller
and its Contract Employees will be assigned to Buyer as of the Closing Date. The
Notice attached hereto as Schedule 4.8(b)(i) shall be presented to the Contract
Employees by Buyer and Seller at such meetings, and the Contract Employees shall
be requested to sign the standard Brown & Brown employment agreement which shall
be attached to the Notice and is attached hereto as Schedule 4.8(b)(i). The
standard Brown & Brown employment agreement shall replace and supersede the
Contract Employees' current employment agreement with Seller but will provide
that the Contract Employees' commission schedule in effect as of the Closing
Date shall remain in effect through December 31, 2001.



                                       13

<PAGE>

                           (ii)     In the event any of the Contract Employees
refuses to enter into the standard Brown & Brown employment agreement on or
before the close of business on October 19, 2001, such employees shall be
considered to have immediately voluntarily resigned from their employment with
Seller without cause ("Resigning Employees"). Seller shall indemnify and hold
Buyer harmless from and against any Adverse Consequences, as defined in SECTION
6.2(B), that Buyer may suffer or incur arising out of or relating to claims by
the Resigning Employees, or any of them, for severance payments and/or payments
in lieu of notice under their respective employment agreements with Seller.

                  (c)      Buyer shall reimburse Seller for all wage and
employee benefit payments and other normal and customary business expenses made
or incurred by Seller after the Effective Date; provided, however, that on and
after the Closing Date, Seller shall segregate, hold in trust in a separate
account, and promptly pay over to Buyer all commissions and fees that are the
property of Buyer pursuant to SECTION 1.5 hereof. Buyer shall be responsible, as
of the Effective Date, for any wages and employee benefits under Buyer's
existing plans and policies for any employee of Seller, whether or not a
Contract Employee, who accepts an offer of employment with Buyer by entering
into Buyer's standard employment agreement.

         Section 4.9       ENFORCEMENT OF ASSIGNED EMPLOYMENT AGREEMENTS. In the
event that a Resigning Employee whose employment agreement with Seller was
assigned to Buyer under SECTION 1.2 hereof, (i) materially breaches any of the
post-termination covenants under his or her employment agreement with Seller,
Seller and the Shareholders shall cooperate with Buyer in enforcing the terms of
such agreement assigned to Buyer and shall join in any legal or equitable
proceedings (to the extent permitted under applicable law) instituted by Buyer
for such purpose, the legal fees and costs of any such proceedings to be borne
by Seller.

         Section 4.10      CORPORATE NAME. Promptly after the Closing, Seller
agrees to cease all use of the name "Apollo Financial Corporation" or any
derivative thereof and will, no later than five (5) business days after the
Closing Date, file an amendment to its Articles of Incorporation, changing its
corporate name to a new name that bear no resemblance to its current name.

                                    ARTICLE 5
                                   CONDITIONS

         Section 5.1       CONDITIONS TO EACH PARTY'S OBLIGATION. The respective
obligations of each party to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction prior to or on the Closing Date
of the following conditions:

                  (a)      All authorizations, consents, orders, or approvals
of, or declarations or filings with, or expirations of waiting periods imposed
by, any Governmental Entity, the failure to obtain which would have a material
adverse effect on the Business or the Acquired Assets after the Closing, shall
have been filed, occurred, or been obtained;

                  (b)      No temporary restraining order, preliminary or
permanent injunction, or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the transaction shall be in effect; and




                                       14

<PAGE>

                  (c)      The obligations of the parties to effect the
transactions contemplated by this Agreement are subject to the simultaneous sale
of the assets of Henry S. Lehr, Inc. to Buyer or its affiliates.

         Section 5.2       CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to effect the transactions contemplated by this Agreement is subject to
the satisfaction of the following conditions, unless waived by Buyer:

                  (a)      The representations and warranties of Seller and the
Shareholders set forth in this Agreement shall be true and correct in all
material respects as of the Closing Date;

                  (b)      Seller and the Shareholders shall have performed in
all material respects all obligations required to be performed by them under
this Agreement at or prior to the Closing Date;

                  (c)      Buyer shall be satisfied, in its sole discretion,
with the results of its due diligence investigation of Seller's business and
records;

                  (d)      Seller shall have delivered the Bill of Sale to
Buyer;

                  (e)      Seller shall have delivered the Assignment and
Assumption Agreement to Buyer;

                  (f)      Seller shall have delivered the Shareholder
Employment Agreement to Buyer;

                  (g)      Subject to SECTION 4.9, Seller shall have delivered
the Staff Employment Agreements to Buyer;

                  (h)      Seller shall have delivered to Buyer a copy of
Seller's Board Resolutions;

                  (i)      Seller shall have delivered to Buyer a copy of the
Shareholder Resolutions, along with a copy of the Plan of Asset Transfer adopted
by the Shareholders;

                  (j)      Seller shall have delivered evidence to Buyer,
satisfactory to Buyer in its sole discretion, of a Certificate of Insurance
regarding the errors and omissions tail coverage required under SECTION 4.5
hereof;

                  (k)      All liens, judgments, and other encumbrances on the
Acquired Assets shall have been satisfied and released prior to Closing;

                  (l)      Buyer shall be satisfied in its sole discretion that
Kempes and The St. Paul Company are willing to appoint Buyer as their agent as
of the Closing Date;



                                       15

<PAGE>

                  (m)      The Acquisition Committee and the Board of Directors
of Buyer's parent company, Brown & Brown, Inc., shall have approved this
Agreement and the transactions contemplated herein; and

                  (n)      There shall have been no material adverse change to
the Business, Acquired Assets, or financial condition of Seller since the
Balance Sheet Date.

         Section 5.3       CONDITIONS TO OBLIGATION OF SELLER AND THE
SHAREHOLDERS. The obligation of Seller and the Shareholders to effect the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions, unless waived by Seller and the Shareholders:

                  (a)      The representations and warranties of Buyer set forth
in this Agreement shall be true and correct in all material respects as of the
Closing Date;

                  (b)      Buyer shall have performed in all material respects
all obligations required to be performed by it under this Agreement at or prior
to the Closing Date;

                  (c)      Buyer shall have executed and delivered the
Assignment and Assumption Agreement to Seller;

                  (d)      Buyer shall have executed and delivered the
Promissory Note to Seller; and

                  (e)      Buyer shall have delivered to Seller and the
Shareholders certified Resolutions of Buyer's Board of Directors.



                                       16

<PAGE>
                                    ARTICLE 6
                                 INDEMNIFICATION

         Section 6.1       SURVIVAL OF REPRESENTATIONS, WARRANTIES, INDEMNITIES
AND COVENANTS. (a) Subject to SECTION 6.1(B) and unless otherwise set forth in
this Agreement, the representations, warranties and indemnities set forth in
this Agreement shall survive for a period of two (2) years from the Closing
Date. All post-closing covenants shall survive the Closing for the period(s)
specified in this Agreement or, if not specified, for a period of two (2) years
following the Closing Date. If a party has received notice of a potential breach
of a representation, covenant or warranty, or the occurrence of an otherwise
potentially-indemnifiable event under this Agreement within such two-year
period, such party may preserve its right to assert a later claim for damages
arising from such breach or event by delivering notice of same to the other
party within the two-year period.

                  (b)      Notwithstanding anything set forth in SECTION 6.1(A),
all representations, warranties, covenants and indemnities in connection with
SECTION 4.7 or any tax liabilities shall survive in perpetuity, subject to
applicable statutes of limitations.

         Section 6.2       Indemnification Provisions for the Benefit of Buyer.
Subject to Section 6.4:

                  (a)      To the extent that any Resigning Employee (as defined
in SECTION 4.8(B)(I)) diverts in direct contravention of such Resigning
Employee's employment agreement with Seller being assigned to Buyer hereunder,
on or before the one-year anniversary of the Closing Date, any line of coverage
which is part of any account comprising the Purchased Book of Business, Buyer
shall be paid by Seller and the Shareholders (which obligations shall be joint
and several) an amount equal to (i) 1.5 times (ii) the aggregate annualized
policy commissions on such diverted lines of coverage.

                  (b)      Seller and the Shareholders agree, jointly and
severally, to indemnify and hold Buyer and its officers, directors, and
affiliates harmless from and against any Adverse Consequences (as defined below)
that any of such parties may suffer or incur resulting from, arising out of,
relating to, or caused by (i) the breach of any of Seller's or the Shareholders'
representations, warranties, obligations or covenants contained herein, or (ii)
the operation of the Business or ownership of the Acquired Assets by Seller on
or prior to the Closing, including, without limitation, any claims or lawsuits
based on conduct of Seller or the Shareholders occurring before the Closing. For
purposes of this ARTICLE 6, the phrase "Adverse Consequences" means all charges,
complaints, actions, suits, proceedings, hearings, investigations, claims,
demands, judgments, orders, decrees, stipulations, injunctions, damages, dues,
penalties, fines, costs, amounts paid in settlement, liabilities (whether known
or unknown, whether absolute or contingent, whether liquidated or unliquidated,
and whether due or to become due), obligations, taxes, liens, losses, expenses,
and fees, including all attorneys' fees and court costs.

                  (c)      In addition to and without limiting SECTION 6.2(A) or
(B), Seller and the Shareholders agree, from and after the Closing, to jointly
and severally indemnify Buyer from and against the entirety of any Adverse
Consequences Buyer may suffer resulting from, arising out of, relating to, in
the nature of, or caused by:



                                       17

<PAGE>

                           (i)      any liability or obligation of Seller that
is not assumed hereunder (including any liability of Seller that becomes a
liability of Buyer under any bulk transfer law of any jurisdiction, under any
common law doctrine of de facto merger or successor liability, or otherwise by
operation of law); or

                           (ii)     any liability of Seller for the unpaid taxes
of any person or entity (including Seller) under United States Treasury
Regulation ss. 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.

         Section 6.3       INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF SELLER
AND THE SHAREHOLDERS. Subject to SECTION 6.4, Buyer agrees to indemnify and hold
Seller, the Shareholders and their respective officers, directors, shareholders
and affiliates harmless from and against any Adverse Consequences that any of
such parties may suffer or incur resulting from, arising out of, relating to, or
caused by (a) the breach of any of Buyer's representations, warranties,
obligations or covenants contained herein, or (b) the operation of the Business
or ownership of the Acquired Assets by Buyer after the Closing, including,
without limitation, any claims or lawsuits based on conduct of Buyer occurring
after the Closing.

         Section 6.4       LIMITATION OF LIABILITY. (a) No indemnification by
either party under SECTION 6.2 or 6.3 shall be required to be made:

                           (i)      with respect to any claim for
indemnification by a party ("Indemnitee") as to which the party from whom
indemnification is sought ("Indemnitor") has not received written notice from
Indemnitee in accordance with SECTION 6.1(A);

                           (ii)     with respect to any claim for
indemnification for breaches of representations or warranties under SECTION
6.2(B)(I) or SECTION 6.3(A) if and to the extent the facts underlying such claim
were known to the actual knowledge of Indemnitee prior to the Closing; or

                           (iii)    with respect to (A) any claims under SECTION
6.2(A), the first Nine Thousand Dollars ($9,000.00) of aggregate Adverse
Consequences incurred by Buyer, and (B) with respect to any indemnification
claims pursuant to a provision other than under SECTION 6.2(A), the first Five
Thousand Dollars ($5,000.00) (the "Basket Amount") of aggregate Adverse
Consequences incurred by a party (Seller and the Shareholders being treated as
one party for purposes of this SECTION 6.4), it being the intent of the parties
that each party shall have a "basket" in such amount with respect to aggregate
claims for indemnification.

                  (b)      All amounts payable by Indemnitor shall be computed
net of any recovery actually paid to Indemnitee (less any deductible incurred by
Indemnitee) under any third-party insurance coverage with respect thereto which
offsets the Adverse Consequences that would otherwise be sustained by
Indemnitee.

                  (c)      The total aggregate liability of any party with
respect to its indemnification obligations under this Agreement shall not exceed
Six Hundred Fifty Thousand Dollars ($650,000.00) (the "Maximum Liability
Amount"); provided, however, that the Holdback Amount


                                       18

<PAGE>

shall be credited against the total aggregate liability of Seller and the
Shareholders set forth in this SECTION 6.4(B).

                  (d)      Notwithstanding any of the foregoing provisions, any
Adverse Consequences for which Buyer is entitled to indemnification as a result
of the breach by Seller or the Shareholders of their covenants set forth in
SECTION 4.2 shall not be subject to the Basket Amount or the Maximum Liability
Amount.

                                    ARTICLE 7
                                     ESCROW

         Section 7.1       ESCROW AGREEMENT. Pursuant to SECTION 1.4(C) hereof,
at Closing Purchaser shall by wire transfer deliver to Fitzpatrick Lentz &
Bubba, P.C. (the "Escrow Agent") the Holdback Amount (for purposes of this
ARTICLE 7, the "Escrowed Funds"), to be held and ultimately disbursed by the
Escrow Agent in accordance with this ARTICLE 7.

         Section 7.2       INTEREST. The Escrowed Funds shall be deposited in a
high performance money fund with a current yield of approximately three (3%)
percent per annum. Subject to the remaining terms of this Article, all interest
earned on the Escrowed Funds shall accrue to the benefit of Seller and
Shareholders.

         Section 7.3       INDEMNIFICATION CLAIMS.

                  (a)      If Buyer shall make a claim for indemnification
hereunder. Buyer shall promptly give written notice of such claim to (i) the
Escrow Agent, (ii) Seller, and (iii) Shareholders. Such notice shall describe
the nature of the claim, the amount thereof, the provisions in this Agreement
and related documents on which the claim is based and shall include a brief
summary of the factual basis on which the claim is based. The thirty (30) day
period immediately following the date which Buyer gives notice to the Escrow
Agent, Seller and Shareholders is referred to herein as the "Response Period."

                  (b)      If the Escrow Agent has not received a written
objection to a claim delivered pursuant to SECTION 7.3(A) from the Seller and/or
Shareholders during the Response Period, the claim shall be conclusively
presumed to have been approved by the Seller and/or Shareholders, and the Escrow
Agent shall promptly thereafter make a cash payment to Buyer equal to the amount
of the claim out of the Escrowed Funds

                  (c)      If during the Response Period the Escrow Agent shall
have received from the Seller and/or Shareholders a written objection to the
claim made by Buyer pursuant to SECTION 7.3(A) above, then for a period of
thirty (30 ) days after receipt by the Escrow Agent of such objection, Buyer and
the Seller and/or Shareholders shall endeavor to resolve the difference and to
issue a joint written direction to the Escrow Agent in respect to the claim in
issue (a "Written Direction"). The Escrow Agent shall act in accordance with the
Written Direction, if an when issued. If a Written Direction is not issued prior
to the end of such thirty (30) day period, Buyer or the Seller or Shareholders
may institute litigation in any court of competent jurisdiction to adjudicate
its rights under this Agreement. The Escrow Agent shall transfer to


                                       19

<PAGE>
Buyer funds from the Escrowed Funds in an amount equal to the full amount of any
final and nonappealable order entered in connection with such litigation or the
balance of the applicable Escrowed Funds, whichever is less, not later than five
(5) days after receipt of such order.

                  (d)      The obligations of Escrow Agent shall be limited to
receiving and holding the Escrowed Funds, and to disburse the same in accordance
with this ARTICLE 7. Should there arise any factual question or dispute
concerning the Escrowed Funds and whether the Escrow Agent turn over the same,
or to whom the same shall be paid or disbursed, or in any event, if the Escrow
Agent so decides, the Escrow Agent may, at its discretion, pay over and deliver
the same to the Court of Common Pleas of Northampton County to be held by said
court pending a resolution of the matter. Following such payment and delivery to
the court, the Escrow Agent shall there upon be discharged from all
responsibility and liability involving the said escrow paid to the court and may
represent Seller, Shareholders or Buyer hereunder in any such dispute. The
parties acknowledge that Escrow Agent is attorney for Seller and Shareholders
and that nothing herein shall preclude Escrow Agent from continuing to represent
Seller and the Shareholders in any adversary proceeding upon the payment of the
Escrowed Funds into court.

         Section 7.4       DISTRIBUTIONS AND TERMINATION OF ESCROW. On or before
October, 31, 2002 (the "Release Date"), Escrow Agent shall wire transfer the
balance of the Escrowed Funds plus all interest earned thereon to Seller and/or
Shareholders as directed in writing by the Seller and Shareholders. On the
Release Date, the applicable amount shall be promptly distributed to the Seller
and/or Shareholders, assuming the remaining amount in the Escrow Account is in
excess of the maximum amount which would be payable to Buyer if all then pending
claims applicable to the Escrowed Funds were determined in favor of Buyer (the
"Maximum Claim Amount"). A claim shall be deemed to be "pending" for purposes of
this Section if written notice of a claim for indemnification has been given in
good faith by Buyer and received by the Escrow Agent pursuant to SECTION 7.3(A)
hereof prior to the Release Date. If the remaining amount of the Escrowed Funds
would not be in excess of the Maximum Claim Amount, then Escrow Agent shall only
distribute to Seller and/or Shareholders the Release Date the amount of the
Escrowed Funds in excess of the Maximum Claim Amount. Any monies scheduled to be
released, but instead retained by the Escrow Agent due to pending claims, shall
be promptly distributed either to Buyer or to the Seller and/or Shareholders by
the Escrow Agent upon, and in accordance with, either a Written Direction or
court order as described in SECTION 7.3(C) hereof. Following the Release Date,
as pending claims are satisfied or otherwise disposed of, any part of the
Escrowed Funds held by the Escrow Agent which is in excess of the Maximum Claim
Amount shall be promptly distributed to the Seller and/or Shareholders.

                                    ARTICLE 8
                                  MISCELLANEOUS

         Section 7.1       NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (if confirmed), or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses or at such other
address for a party as shall be specified by like notice:


                                       20

<PAGE>

                  (a)      If to Buyer, to

                                    Brown & Brown of Lehigh Valley, Inc.
                                    90 South Commerce Way, Suite 100
                                    Bethlehem, Pennsylvania  18017-2267
                                    Telecopy No.: (610) 867-1162
                                    Attn:  Robert Iocco

                           with a copy to

                                    Brown & Brown, Inc.
                                    401 E. Jackson St., Suite 1700
                                    Tampa, Florida  33601
                                    Telecopy No.: (813) 222-4464
                                    Attn:  Laurel Grammig

                  (b)      if to Seller or to the Shareholders, to

                                    William H. Lehr
                                    Patsy A. Lehr
                                    734 Paxinosa Avenue
                                    Easton, PA 18042

                                    Joseph A. Bubba, Esquire
                                    Fitzpatrick Lentz & Bubba, P.C.
                                    4001 Schoolhouse Lane
                                    P.O. Box 219
                                    Center Valley, Pennsylvania  18034-0219
                                    Telecopy No.: (610) 797-6663

         Section 8.2       USE OF TERM "KNOWLEDGE". With respect to the term
"Knowledge" as used herein: (a) an individual will be deemed to have "Knowledge"
of a particular fact or other matter if (i) such individual is actually aware of
such fact or other matter, or (ii) a prudent individual could be expected to
discover or otherwise become of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence of
such fact or matter; and (b) a corporation or other business entity will be
deemed to have "Knowledge" of a particular fact or other matter if any
individual who is serving, who has at any time in the twelve (12) months prior
to the Closing Date served, as a director, officer, executor, or trustee (or in
any similar capacity) of such corporation or business entity has, or at any time
had, Knowledge of such fact or other matter.

         Section 8.3       COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.


                                       21

<PAGE>
         Section 8.4       ENTIRE AGREEMENT. This Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.

         Section 8.5       ASSIGNMENT. Except as contemplated in SECTION 4.4
hereof, neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
This Agreement will be binding upon, inure to the benefit of, and be enforceable
by the parties and their respective successors and assigns.

         Section 8.6       SEVERABILITY. If any provision or covenant, or any
part thereof, of this Agreement should be held by any court to be illegal,
invalid or unenforceable, either in whole or in part, such illegality,
invalidity or unenforceability shall not affect the legality, validity or
enforceability of the remaining provisions or covenants, or any part thereof,
all of which shall remain in full force and effect.

         Section 8.7       ATTORNEYS' FEES AND COSTS. The prevailing party in
any proceeding brought to enforce the terms of this Agreement shall be entitled
to an award of reasonable attorneys' fees and costs incurred in investigating
and pursuing such action, both at the trial and appellate levels.

         Section 8.8       GOVERNING LAW. This Agreement shall be governed by
and construed and enforced in accordance with internal Pennsylvania law without
regard to any applicable conflicts of law.

         Section 8.9       WAIVER OF JURY TRIAL. The parties hereby knowingly,
voluntarily and intentionally waive any right either may have to a trial by jury
with respect to any litigation related to or arising out of, under or in
conjunction with this Agreement.

         Section 8.10      AMENDMENT; WAIVER.This Agreement may not be amended,
or any provision waived, except by an instrument in writing signed on behalf of
each of the parties.

                               * * * * * * * * * *

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS]


                                       22

<PAGE>

         IN WITNESS WHEREOF, the parties have signed or caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.

BUYER:

                                   BROWN & BROWN OF LEHIGH VALLEY, INC.


                                   By:
                                      ----------------------------------------

                                   Name:    Thomas E. Riley
                                   Title:   President

                                   SELLER:

                                   APOLLO FINANCIAL CORPORATION


                                   By:
                                       ----------------------------------------
                                   Name:
                                       ----------------------------------------
                                   Title:
                                       ----------------------------------------

                                   SHAREHOLDERS:


                                   --------------------------------------------
                                   William H. Lehr, individually



                                   --------------------------------------------
                                   Patsy A. Lehr, individually

                                   ESCROW AGENT:

                                   FITZPATRICK LENTZ & BUBBA, P.C.


                                   By:
                                      --------------------------------------
                                        Joseph A. Bubba, Esquire, A Director



                                       23

<PAGE>
                             SCHEDULES AND EXHIBITS


Schedule 1.1(a):           Permitted Liens and Encumbrances
Schedule 1.2(a):           Purchased Book of Business
Schedule 1.2(d):           Tangible Property
Schedule 1.2(e):           Assigned Agreements
Schedule 3.6:              Guaranteed Premium Financing
Schedule 3.8:              Material Contracts
Schedule 3.9:              List of Claims and Litigation
Schedule 3.12:             Non-Solicitation Covenants
Schedule 3.13:             E&O and EPL Claims and Litigation
Schedule 3.14:             Employee Dishonesty Coverage
Schedule 4.8(b):           Contract Employees
Schedule 4.8(b)(i):        Notice

Exhibit 2.2(a):            Bill of Sale
Exhibit 2.2(b):            Assignment and Assumption Agreement
Exhibit 2.3(c):            Promissory Note


                                       24


<PAGE>
                                                                     EXHIBIT 21


                              BROWN & BROWN, INC.
                              ACTIVE SUBSIDIARIES


Florida Corporations:

1.       B & B Insurance Services, Inc. f/k/a Brown & Brown, Inc.
2.       The Benefit Group, Inc.
3.       Champion Underwriters, Inc.
4.       The Connelly Insurance Group, Inc.
5.       Finwall & Associates, Inc.
6.       Jerry F. Nichols & Associates, Inc.
7.       Madoline Corporation
8.       Mangus Insurance & Bonding, Inc.
9.       Physician Protector Plan Risk Purchasing Group, Inc.
10.      Rankin & Rankin, Inc.
11.      Ross Insurance of Florida, Inc.
12.      SAN of East Central Florida, Inc.
13.      Signature Insurance Group, Inc.
14.      Spencer & Associates, Inc.
15.      Underwriters Services, Inc.
16.      United Benefits, Inc.

Foreign Corporations:

17.      AFC Insurance, Inc. f/k/a Brown & Brown Insurance of Pennsylvania,
           Inc. (PA)
18.      A.G. General Agency, Inc. (TX)
19.      American & British Excess, Inc. (VA)
20.      Benesys, Inc. (LA)
21.      Brown & Brown Aircraft Acquisition Co. (DE)
22.      Brown & Brown Insurance of Arizona, Inc. (AZ)
23.      Brown & Brown of California, Inc. (CA)
24.      Brown & Brown of Colorado, Inc. (CO)
25.      Brown & Brown of Connecticut, Inc. (CT)
26.      Brown & Brown of GF/EGF, Inc. f/k/a Froelich-Paulson-Moore, Inc. (ND)
27.      Brown & Brown Insurance of Georgia, Inc. (GA)
28.      Brown & Brown of Iowa, Inc. (IA)
29.      Brown & Brown Insurance Benefits, Inc. (TX)
30.      Brown & Brown Metro, Inc. (NJ)
31.      Brown & Brown of Michigan, Inc. (MI)
32.      Brown & Brown of Minnesota, Inc. (MN)
33.      Brown
 & Brown of Missouri, Inc. (MO)
34.      Brown & Brown of New Jersey, Inc. (NJ)
35.      Brown & Brown of New York, Inc. (NY)
36.      Brown & Brown of North Dakota, Inc. (ND)
37.      Brown & Brown of Ohio, Inc. (OH)
38.      Brown & Brown Agency of Insurance Professionals, Inc. (OK)



<PAGE>


39.      Brown & Brown Realty Co. (DE)
40.      Brown & Brown of South Carolina, Inc. (SC)
41.      Brown & Brown of Tennessee, Inc. (TN)
42.      Brown & Brown Insurance Services of Texas, Inc. (TX)
43.      Brown & Brown Insurance Services of El Paso, Inc. (TX)
44.      Brown & Brown Insurance Services of San Antonio, Inc.(TX)
45.      Brown & Brown Insurance Agency of Virginia, Inc. (VA)
46.      Brown & Brown Re, Inc. (CT)
47.      Brown & Brown of Washington, Inc. (WA)
48.      Brown & Brown of West Virginia, Inc. (WV)
49.      Brown & Brown of Wisconsin, Inc. (WI)
50.      Brown & Brown of Wyoming, Inc. (WY)
51.      Cost Management Services, Inc. (LA)
52.      The Flagship Group, Inc. (VA)
53.      Huffman & Associates, Inc. (GA)
54.      Huval Insurance Agency, Inc. (LA)
55.      Huval Insurance Agency of Abbeville, Inc. (LA)
56.      Huval Insurance Agency of Arnaudville, Inc. (LA)
57.      Huval Insurance Agency of Church Point, Inc. (LA)
58.      Huval Insurance Agency of Grand Coteau-Sunset, Inc. (LA)
59.      Huval Insurance Agency of Lafayette, Inc. (LA)
60.      Huval Insurance Agency of Loreauville, Inc. (LA)
61.      Huval Insurance Agency of New Iberia, Inc. (LA)
62.      Huval Insurance Agency of Opelousas, Inc. (LA)
63.      Huval Insurance Agency of Scott, Inc. (LA)
64.      Huval Management Company, Inc. (LA)
65.      Huval Richard Insurance Agency, Inc. (LA)
66.      Insurance Programs Incorporated (LA)
67.      Layne & Associates, Ltd. (NV)
68.      Logan Insurance Agency, Inc. (VA)
69.      McKinnon & Mooney, Inc. (MI)
70.      P & O of Texas, Inc. (TX)
71.      Peachtree Special Risk Brokers, LLC (GA) (Brown owns 75%)
72.      Peachtree Special Risk Brokers of New York, LLC (NY)
           (Brown owns (100-%)
73.      Poe & Associates of Illinois, Inc. (IL)
74.      Poe & Brown of North Carolina, Inc. (NC)
75.      Roswell Insurance & Surety Agency, Inc. (NM)
76.      Self Insurance Administrators, Inc. (LA)
77.      Unified Seniors Association, Inc.
78.      WMH, Inc. (GA)
79.      The Young Agency, Inc. (NY)


                                       2

<PAGE>

Indirect Subsidiaries:

80.      America Underwriting Management, Inc. (FL)
81.      Automobile Insurance Agency of Virginia, Inc. (VA)
82.      Azure IV Acquisition Corporation (AZ)
83.      Azure VI Merger Co. (CA)
84.      Bass Administrators, Inc. (LA)
85.      Brown & Brown of Indiana, Inc. f/k/a Poe & Brown of Indiana, Inc. (IN)
86.      Brown & Brown of Lehigh Valley, Inc. f/k/a Bowers, Schumann & Welch,
           Inc. (PA)
87.      Brown & Brown of Nevada, Inc. f/k/a Poe & Brown of Nevada, Inc. (NV)
88.      Brown & Brown of New Mexico, Inc. f/k/a Poe & Brown of New Mexico,
           Inc. (NM)
89.      Brown & Brown of Northern California, Inc. (CA)
90.      Ernest Smith Insurance Agency, Inc. (FL)
91.      Flagship Group Insurance Agency, Ltd. (MA)
92.      Flagship Management Co. (VA)
93.      Flagship Maritime Adjusters, Inc. (VA)
94.      Florida Intracoastal Underwriters, Limited Company (FL) (limited
           liability company)
95.      Halcyon Underwriters, Inc. (FL)
96.      Harris Holdings, Inc. (VA)
97.      The Homeowner Association Risk Purchasing Group, Inc. (AZ)
98.      Hotel-Motel Insurance Group, Inc. (FL)
99.      MacDuff America, Inc. (FL)
100.     MacDuff Pinellas Underwriters, Inc. (FL)
101.     MacDuff Underwriters, Inc. (FL)
102.     Richard-Flagship Services, Inc. (VA) (The Flagship Group, Ltd.
           owns 50%)
103.     Yates Insurance Agency, Inc. (LA)


                                       3


<PAGE>
                                                                      EXHIBIT 23


              Consent of Independent Certified Public Accountants


As independent certified public accountants, we hereby consent to the
incorporation by reference of our report dated January 18, 2002 on the
consolidated financial statements of Brown & Brown, Inc. and subsidiaries (the
Company) as of December 31, 2001 and 2000 and for each of the three years in the
period ended December 31, 2001, included in the Company's Form 10-K dated on or
around February 14, 2002, into the following registration statements previously
filed by the Company and to all references to our Firm included in these
registration statements: Form S-8 (File No. 33-41204) as amended by Amendment
No. 1 to Form S-8 (File No. 333-04888); Form S-8 (File No. 333-14925); Form S-8
(File No. 333-43018); Form S-3 (File No. 333-58004); Form S-3 (File No.
333-58006); Form S-3 (File No. 333-58008); Form S-3 (File No. 333-70480); Form
S-3 (File No. 333-75158).


                                             /s/ ARTHUR ANDERSEN LLP


Orlando, Florida,
  February 14, 2002






<PAGE>
                                                                      EXHIBIT 24


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                 /S/ BRADLEY CURREY, JR.
                                             --------------------------------
                                                     Bradley Currey, Jr.


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead,
 in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                           /S/ J. HYATT BROWN
                                                     -------------------------
                                                        J. Hyatt Brown


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for her and in her
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as she might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                           /S/ TONI JENNINGS
                                                     --------------------------
                                                        Toni Jennings


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                          /S/ DAVID H. HUGHES
                                                     --------------------------
                                                        David H. Hughes


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                          /S/ JAN E. SMITH
                                                     --------------------------
                                                          Jan E. Smith


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                    /S/ THEODORE J. HOEPNER
                                               --------------------------------
                                                  Theodore J. Hoepner


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                     /S/ SAMUEL P. BELL, III
                                              ---------------------------------
                                               Samuel  P. Bell, III


Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                   /S/ JIM W. HENDERSON
                                          ------------------------------------
                                               Jim W. Henderson

Dated:  January 23, 2002




<PAGE>


                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                       /S/ JOHN R. RIEDMAN
                                              ---------------------------------
                                                 John R. Riedman

Dated:  January 23, 2002




<PAGE>





                                POWER OF ATTORNEY

         The undersigned constitutes and appoints Laurel L. Grammig and Thomas
M. Donegan, Jr., or either of them, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign the 2001 Annual Report
on Form 10-K for Brown & Brown, Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as he might or could in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitutes, may lawfully do or
cause to be done by virtue hereof.

                                                     /S/ CORY T. WALKER
                                             ---------------------------------
                                               Cory T. Walker

Dated: January 23, 2002