Sample Asset Purchase Agreement 2013

Disclaimer

The accompanying Sample is published as a service to the IIAT membership. It is offered only

for general information purposes, and is not intended to provide specific advice about individual

legal, business or other matters. It was prepared solely as a guide, is not a substitute for

independent evaluation of all provisions included in a contract, and is not a recommendation that

any contract be accepted or rejected. No attorney-client relationship will be established by use of

all or any part of this sample contract. Specific legal advice is required and desired. The

services of an appropriate, qualified attorney should be sought.

This sample was prepared by Thomas M. Braniff, JD, CPCU. Mr. Braniff is the Managing

Partner of Braniff Attorneys / Counselors, and President of Texas Insurance Consulting. Both

firms concentrate their activities in the area of insurance, regulatory and risk management

matters. Mr. Braniff has previously owned and operated general lines agencies, managing

general agencies, and insurance companies. He can be contacted directly for additional

information or regarding representation at 713-664-0604 or [email protected].

PURCHASE AND SALE AGREEMENT

This Agreement Is Subject To Arbitration

Under The Texas General Arbitration Act

THIS AGREEMENT is made and entered into effective the __ day of ________________, 2012

the “Effective Date”), by and between ____________________________, individually (hereinafter

referred to as "Seller") and _______________________________________________, a Texas

corporation (hereinafter referred to as "Buyer").

WHEREAS, Seller is engaged in the business of operating an independent insurance agency in

the name of _______________ Insurance Agency (hereinafter referred to as “Agency”) having its

principal place of business at ________________, Texas; and

WHEREAS, Seller owns one hundred percent (100%) of the assets (hereinafter referred to as

"Assets" and/or “Accounts” and/or “Policies”) of the Agency, and Seller desires to sell to Buyer

certain of the Assets, Accounts and/or Policies of the Agency, as more fully set forth in this

Purchase and Sale Agreement and/or Exhibits thereto (hereinafter referred to as "Agreement");

and

WHEREAS, Buyer desires to purchase those certain Assets, Accounts and/or Policies of Seller

upon the terms and conditions set forth herein; and

WHEREAS, the respective parties deem it advisable and in their best interest for Buyer to acquire

said Assets, Accounts and/or Policies of Seller and for Seller to sell the Assets, Accounts and/or

Policies to Buyer:

NOW, THEREFORE, in consideration of the mutual representations, warranties and covenants

contained herein and other good and valuable consideration, receipt of which is hereby

acknowledged, the parties hereto agree as follows:

MASTER

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

REVISED

02/01/13

1. CLOSING. The date of Closing ("Closing") shall be on or about _______________ __,

201_. The place of Closing shall be at the office of _______________________________

in __________________________, Texas, at 10:00 a.m.

(a) At the Closing, Seller shall deliver:

(i) An executed copy of this Agreement and/or other instruments of

conveyance as Buyer may reasonably require (if any) to transfer to the

Buyer good, valid and marketable title and beneficial ownership of all of the

assets referred to in Exhibit "A" hereof, free and clear of all liens, claims,

security interests, encumbrances, restrictions or other charges of any kind.

(ii) All files, expiration records, dailies and other documents relating to the

Accounts or Policies. Seller shall provide immediate access to such records

and other documents so that Buyer may take possession thereof.

(iii) Copies of the insurance agent licenses currently held by Seller and staff

licenses.

(iv) All moneys that have been collected by Seller for Policies with an

effective date on or after the effective date of this Agreement, including a

detailed listing of all prepaid amounts by Account for reconciling

payments made to Seller prior to the Effective Date.

(v) Such other instruments and documents of conveyance or assignment as

may be reasonably necessary to transfer the Assets being acquired, and to

carry out the requirements and intent hereof.

(b) At the Closing, Buyer shall deliver:

(i) A Producer Agreement in a form agreed to between the parties prior to

execution of this Agreement.

(ii) Such other instruments and documents as may be reasonably necessary

to carry out the requirements and intent hereof.

and documents as may be reasonably required to transfer to Buyer title to the

subject Assets, further secure Buyer’s or security in the Assets, and/or to carry out

the terms, conditions and intent hereof.

2. ASSETS BEING TRANSFERRED. Seller hereby agrees to sell, assign, transfer and

convey to the Buyer, and Buyer hereby agrees to purchase from Seller the Assets, more

particularly described as follows:

(a) Seller’s book of insurance business consisting of policies and customer lists,

expiration information and other written material relating to all property, casualty,

life, health and disability insurance policies, including rights to renewals thereof,

and all records and documents relating to all insurance handled by Seller,

(hereinafter collectively referred to as the “Accounts” or "Policies"). A description

and listing of the Policies and customers issued and outstanding as of

__________, 201_, in alphabetical order, each client’s name, address, contact

information, and the annual premium and commissions earned from each during

the previous twelve (12) months, is attached thereto as Exhibit "A" of this

Agreement.

(b) The exclusive rights to use the trade names “___________ Insurance Agency” and

“______________ Insurance”, or derivatives thereof, so long as Buyer performs all

obligations pursuant to this Agreement.

any yellow page and magazine advertisements pertaining to said phone, fax and

data service numbers, domain names URL/websites and email addresses and

other means of communication; and assignment of Agency’s post office box

numbered in ______________, _______________ County, Texas, as well as all

domain rights associated with Agency’s URL/websites, email addresses and other

means of communication; with future costs for all of the above to be assumed by

Buyer on and after ______________ __, 201_.

(d) All items of furniture, fixtures, equipment, machines, computers and peripheral

supplies and any business property of Seller (as generally described in Exhibit “B”

attached hereto) used in the operation of the Agency as of the close of business on

_____________, 201__; subject to no implied or expressed warranty as to use for

intended purpose merchantability or condition.

(e) Those certain agency agreements which Seller now has with insurance companies

that Seller represents as an agent/broker. Buyer acknowledges that none of said

agency agreements are assignable without the consent of the insurance

companies which are parties thereto. Seller makes no warranty or representation

with respect to whether said entities will grant such requisite consent, and it is

understood and agreed that the grant of such consent by any or all of said

insurance companies shall not be a condition precedent to the obligations of Buyer

hereunder. Provided, however, Seller does agree to use his/her best efforts

diligently and in good faith to assist Buyer in obtaining the consent of such

insurance companies to said assignment and/or the appointment of Buyer as

agent of said companies under a new agreement.

(f) All forms, form letters and templates, both software and printed, developed by

Agency, and used by Agency prior to ____________, 201_. Buyer acknowledges

that continued use shall be solely at Buyer’s own risk and without liability to Seller.

(g) Those certain employment agreements and/or covenants not to compete in effect

between Seller, Agency and its current and former employees, if any.

3. PURCHASE PRICE. Subject to the terms and conditions of this Agreement and in

reliance upon the representations, warranties and covenants of Seller, Buyer shall

purchase the Assets, Accounts and/or Policies in exchange for the following consideration:

(a) Buyer shall execute a Promissory Note to Seller in the principal amount of $___,

000 payable in __ payments of $___________ each, which shall include percent

(__%) annual interest on the declining balance, the first payment of which shall be

payable on _______________, 200_, with the remaining __ payments payable on

the __the of each month thereafter, with the final payment being due and payable

on _________________________, ______.

(b) As collateral to secure Buyer’s obligation set forth above, Buyer agrees that Seller

may file and record a security statement evidencing its interest in the book of

business and expiration rights in Seller’s book of business.

4. ALLOCATION OF PURCHASE PRICE. The parties hereto agree that the total

consideration to be paid hereunder shall be allocated as follows. The parties further

acknowledge the fairness and reasonableness of the following allocations, and agree that

for tax purposes they will each report the same in accordance with such allocations.

(a) The amount of _______________ percent (___ %) of the purchase price shall be

allocated specifically as consideration for the Accounts or Policies listed in Exhibit

"A" hereof.

(b) The amount of _______________ percent (___ %) of the purchase price shall be

allocated specifically as consideration for the goodwill of the Seller.

allocated specifically as the consideration for the protective and restrictive

covenants of Seller contained in this Agreement.

(d) The amount of _______________ percent (___ %) of the purchase price shall be

allocated specifically as consideration for the tangible personal property of the

Seller described in Section 2(d) hereof, and listed in Exhibit “B” hereof.

5. SELLERS’ RIGHT TO AUDIT. Seller shall have the right to audit those books and

records of Buyer that pertain to the administration and servicing of the Accounts or

Policies being transferred by this Agreement. Should Seller elect to exercise his right to

audit, he shall do so by notice to Buyer in writing. Said notice shall designate the date (not

sooner than five (5) days from the date of notice) and time of such audit which shall be

conducted on the premises of Buyer during normal business hours or otherwise as the

parties may agree; provided, however, no such audit may be conducted by Seller during

such time as Buyer’s books and records are being audited by Buyer’s auditors for tax

purposes or any other legitimate business purpose. Buyer shall instruct its personnel to

cooperate with Seller’s representatives in the conduct of such audit. In the event such

audit shall determine that an error has been made in said accounting, then the parties

shall may such adjustment as may be required within thirty (30) days following completion

of said audit. Seller shall have the right to conduct such audits not more often than once

in any six (6) month period. Said audit(s) shall be at the sole expense of Seller.

6. SERVICING OF EXISTING POLICIES. From and after the Effective Date, Buyer hereby

agrees to service the in force business generated by Seller prior to the closing. Buyer will

handle all of Seller’s receivables, and payables with insurance companies, brokers and

other providers, that are due to or from Seller as of the Effective Date. Seller, however,

shall remain responsible for any amounts that Buyer may be requires to pay in connection

with such transactions.

An escrow account will be established by Buyer under the name _________________

Escrow Account. Seller shall deposit into this account an amount equal to the accounts

payable indicated in Seller’s Balance Sheet, plus any prepaid amounts as provided in

Section 1 (a) (iv) of this Agreement. Buyer will pay refunds or other amounts to Accounts

or insurance companies, brokers and other providers in excess of the balance of the

Escrow Account, and charge the amounts to the Escrow Account balance. In the event

Buyer pays refunds due to Accounts or insurance companies, brokers and other providers,

Buyer may charge the expense against other amounts due from Buyer to Seller. When all

such refunds or other amounts pertaining to business placed by Seller prior to the

Effective Date of this Agreement are paid in full, any amount remaining in the Escrow

Account shall be the property of Seller.

7. ACCOUNTS RECEIVABLE / PAYABLE AND ADDITIONAL / RETURN COMMISSIONS.

The following provisions shall apply with respect to accounts receivable and accounts

payable, as well as additional and return commissions and premiums:

(a) All of Agency’s or Seller’s accounts receivable, and all commissions and other

revenues actually received by Seller which are attributable to the insurance placed

by Agency or Seller with an effective date of coverage prior to the Effective Date of

this Agreement shall remain the property of and/or be the responsibility of Seller.

(b) All of Agency’s or Seller’s accounts payable, as well as all return commissions or

premiums due in connection with revenues received by Agency or Seller prior to

the Effective Date of this Agreement, shall be the responsibility of the Seller.

Seller may have collected for business written with an effective date of coverage

on and after the Effective Date of this Agreement. Thereafter, Agency and/or Seller

shall remit to Buyer forthwith upon receipt of any such payments.

(d) All commissions on Agency Bill policies with a policy effective date prior to the

Effective Date of this Agreement, and actually billed and having a payment due

date prior to the Effective Date of this Agreement, shall be the property of Seller;

and those with a policy effective date, or that are billed, or that have an installment

payment due date on or after the Effective Date of this Agreement shall be the

property of Buyer.

(e) All commissions on Direct Bill policies actually received by Seller from insurance

carriers and other providers before the Effective Date of this Agreement shall be

the property of Seller; and those actually received from insurance carriers and

other providers on or after the Effective Date of this Agreement shall be the

property or Buyer.

(f) All additional commissions as a result of audits, endorsements or other

transactions actually received by Agency or Seller before the Effective Date of this

Agreement shall be the property of Seller. All additional commissions as a result of

audits, endorsements or other transactions actually received on or after the

Effective Date of this Agreement shall be the property of Buyer, regardless of

effective date of the transaction.

(g) Buyer shall be entitled to all contingent or override commissions that may be

received for increased production, and commissions for endorsements, audits and

installment payments received on or after the Effective Date of this Agreement,

regardless of when earned.

8. PROFIT SHARING / CONTINGENCY BONUSES. Contingency, bonus or profit sharing

payments, if any, that may be received, that are based on production or performance of

Seller and/or Agency during calendar years ____ and ____, from either ____ Insurance

Company or _________________ Insurance Company, shall be shared pro-rata between

Buyer and Seller in accordance with the volume of premium written, with each insurance

company during those calendar years. Thereafter, Seller’s right to contingency, bonus or

profit sharing payments shall be governed by the Producer Agreement executed between

Buyer and of Seller.

9. TRIPS / REWARDS / INCENTIVES. With respect to any trips, prizes, rewards or other

similar non-monetary gifts or incentives that are received by Buyer or Seller in conjunction

with premium production or other performance during calendar years ____ or ____ (but

not actually awarded until ____ or ____, as the case may be) shall be divided between

Buyer and Seller as equally as may be possible under the circumstances. Any such

awards or incentives received by Buyer in conjunction with premium production or other

performance taking place during calendar years ____ and thereafter, shall be the property

of Buyer, to be distributed as Buyer's in its sole discretion may decide.

10. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and

warrants to Buyer as follows, which warranties and representations shall be true and

complete as of the Effective Date of this Agreement, and shall survive thereafter.

(a) _______________ Insurance Agency, _____ is a Texas ________________ duly

organized, validly existing and in good standing under the laws of the State of

Texas and is duly qualified in each jurisdiction in which Seller conducts operations

to carry on the business in which it is engaged, and to execute and deliver and

carry out the transactions contemplated by this Agreement.

(b) Seller has full power and authority to execute and deliver and carry out the

transactions contemplated by this Agreement.

of Texas to conduct business as an insurance agent, under the authority granted

by a General Lines Agent’s license. Agency has full power and authority to

conduct all of its business as now conducted.

(d) Seller holds good and marketable title to the Assets to be sold and transferred

hereunder free and clear of all liens, claims, security interests, encumbrances,

restrictions or other charges of any kind. No other person, firm or corporation

owns or has any record, beneficial or security interest in said Assets or Policies or

any part thereof; and, upon final execution hereof, Buyer will acquire good, valid

and marketable title, free and clear of all liens, claims, security interests,

encumbrances, restrictions or other charges of any kind.

(e) All of the Policies are for direct Accounts owned exclusively by Seller, free of all

liens, encumbrances, claims and demands of all persons. None of the Policies

have been produced for Seller by any producer or employee, nor have any of the

Policies been “brokered” into Seller by anyone, nor have any of the Policies been

purchased by Seller or otherwise acquired from anyone within forty-eight (48)

months immediately preceding the date of execution of this Agreement.

(f) Seller is not a party to any agreement, whether written or oral, which in any

manner restricts their right to enter into this Agreement and to carry out the terms

and conditions hereof.

(g) Seller is not in arrears or in default of their obligations under any of the agency

agreements with insurance companies and other providers, and Seller is in good

standing with all the insurance companies or other providers with whom it has

done business.

(h) There is no pending or threatened litigation against Seller or proceeding before any

administrative or licensing authority which in any manner may affect the value of or

title to the Assets and/or Policies being sold hereunder, and there are no unsettled

or unpaid judgments against Seller.

(i) Seller has filed all federal, state and municipal income tax returns and all other

applicable federal, state and municipal tax returns required to have been filed by it,

and has paid the taxes due, and no waivers or extensions of the statutory period of

limitation within which assessments may be made have been granted with respect

to any such returns.

(j) All premiums properly due and payable (meaning those not the subject of

legitimate dispute, which dispute has been raised by Seller in writing directed to

the claimant) to insurance companies or general agents for business written with

an inception date prior to the effective date of this Agreement have been paid or

will be paid, prior to any default thereon.

(k) Exhibit "A" is a true and complete list of all the Accounts and Policies; and all of the

Policies listed in Exhibit "A" are, to the best of Seller’s knowledge, active accounts

with property, casualty, life and/or health insurance in force as of _____________

__, 201_.

(l) Seller is not in arrears in the payment of any producer commissions, or wages, or

withholding social security or other taxes thereon.

(m) Neither Seller nor Agency have any contracts, agreements, understandings or

arrangements of any kind, either oral or written, with respect to the sharing of fees

or commissions in connection the Accounts or Policies being transferred under this

Agreement; including, but not limited to, any contract, agreement, arrangement or

understanding with any insurance carrier (except for the agency agreements with

insurance companies) or with any insurance agent or broker, or with any trade

group or association or any other person or entity with respect to any of the

Policies or Accounts.

(n) Within the ___________ (__) months prior to the date of this Agreement, no other

potential buyer or other insurance agent or broker or representatives thereof have

received copies of or have had access to Seller’s or Agency’s files and records

containing information relative to the Policies including, but not limited to,

expirations, dailies, customer lists and customer account records.

(o) There has been no known material adverse change in the condition, financial or

otherwise, of Seller or of any of the Assets to be transferred to Buyer hereunder.

(p) Seller and/or Agency have in effect a policy of errors and omissions insurance

issued by ________________ Insurance Company, effective ______________,

201__, through , 201__, being policy No._____________ with limits of

liability of not less than $__________ million per occurrence and $_________

million annual aggregate with a deductible of not more than $ _______ per

occurrence. Seller hereby covenants it will notify its errors and omissions carrier of

this transaction and obtain an extended claims reporting clause or extension

added to their existing policy for a period of not less than twenty-four (24) months

following the Effective Date of this Agreement.

(q) All of the tangible personal property of Seller listed on Exhibit "B" is now in good

and proper working order and will be delivered to Buyer at the Closing in good and

proper working order without material damage thereto.

(r) At no time during the past five (5) years have Sellers ever operated or conducted

business under any fictitious name other than _____________ Insurance Agency.

Said trade name is owned by Seller, free of the claims and demands of all persons.

(s) Seller shall add Buyer’s name to all of the insurance company premium

trust/escrow accounts currently maintained by Seller, and pass control of those

accounts to Buyer, in order to provide a smooth transition of cash flow following the

Closing. Buyer shall be authorized to deposit and withdraw funds from the

trust/escrow accounts. Seller shall audit all such trust/escrow accounts prior to

Closing and provide Buyer a detailed reconciliation indicating funds to be retained

by Seller, and funds to be left in the accounts to be paid to insurance companies

and other providers. In the event the funds left in the accounts are not adequate to

fulfill Agency’s or Seller’s obligations to the insurance companies in question, then

Seller shall immediately upon notice from Buyer deposit the funds necessary.

11. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and

warrants to Seller as follows, which warranties and representations are true and complete

as of the date hereof and, shall be true and complete as of the Effective Date of this

Agreement, and shall survive thereafter:

(a) Buyer is a _______________________________ duly organized, validly existing

and in good standing under the laws of the State of Texas and is duly qualified in

each jurisdiction in which Buyer conducts operations, with full power and authority

(corporate and other) to carry on the business in which it is engaged and to

execute and deliver and carry out the transactions contemplated by this

Agreement.

(b) The execution and delivery of this Agreement and the performance of the

transactions contemplated hereby have been duly authorized, and do not and will

not result in a breach of or constitute a default under any provision of the Articles of

Incorporation or By-Laws or Member or Partnership Agreement of Buyer; or any

lease, license or other agreement to which it is a party or is bound, or by which any

of its properties or assets may be bound or affected, or violate any order, of any

court or administrative agency.

obligation of Buyer enforceable in accordance with its terms except as limited by

bankruptcy, insolvency and similar laws affecting creditor’s rights generally and by

equitable principles.

(d) Buyer has adequate markets in which to renew substantially all existing Policies

and has sufficient and adequately trained personnel to service the Policies in a

proper and businesslike manner.

(e) There is no pending litigation against Buyer nor any pending proceedings against

Buyer before any administrative or licensing authority, and Buyer has no

knowledge of any threatened litigation against it or any threatened proceedings

against it before any administrative or licensing authority which in any manner has

any material affect upon its financial condition, its operations or its ability to enter

into this Agreement and carry out the transactions contemplated hereby.

(f) Buyer is not a party to any agreement, whether written or oral, which in any

manner restricts or impairs its right to enter into this Agreement and to carry out

the terms and conditions hereof, and no approval or consent is necessary from any

government agency or any individual or entity not a party hereto in order to effect

the transactions embodied herein.

(g) Buyer has in effect a policy of errors and omissions insurance issued by

______________ Insurance Company, effective ___ , 201_ through

_______________, 201_, being policy No.___________, with limits of liability of

not less than $_____________ per occurrence and $____________ annual

aggregate with a deductible of not more than $ __________ per occurrence.

Buyer hereby covenants it will maintain in effect for a period of not less than

____________ months following the Closing Date. Buyer further covenants that it

will notify its errors and omissions insurance company and pay any additional

premium that may be required in order to purchase coverage for matters that may

arise from acts or omissions of Buyer or its representatives which occur after the

Effective Date of this Agreement.

12. NO ASSUMPTION OF LIABILITIES BY BUYER. Except as expressly and specifically

provided herein, Buyer shall be under no obligation to assume and shall not be deemed to

have assumed any obligation, liability, contract or commitment of Seller of any kind

whatsoever; including, but not limited to, any liability under any employment agreement,

consulting arrangement, pension or profit sharing plan, stock option or purchase plan or

other employee contract, federal and state taxes, all of which liabilities shall remain the

exclusive obligation of Seller.

13. PRESERVATION OF RECORDS. Buyer agrees that it shall preserve all of the records in

connection with the Accounts and Policies transferred hereunder for a period of not less

than ___________ (__) months from the date of Closing. Buyer shall permit Seller or their

appointed representatives access to said records.

14. CODING OF POLICIES. Buyer agrees to segregate and establish separate codes in its

computer system for all Policies purchased thru this Agreement, for a period of not less

than ____________ (__) months after Closing. Said coding shall not be deemed to imply

any ownership interest in the Accounts and Policies by Seller.

15. SELLER’S INDEMNIFICATION OF BUYER. Seller hereby agrees to indemnify,

reimburse, hold harmless and defend Buyer from any and all debts, claims, taxes, costs

and expenses of any and every nature whatsoever (including attorney's fees and other

costs) resulting from (a) any and all errors and omissions claims arising out of or with

respect to insurance policies placed or which should have been placed by Seller prior to

the effective date, (b) the operation and conduct of Seller’s or Agency’s business prior to

the effective date hereunder, (c) any other obligations or liabilities of the Seller or Agency,

and/or (d) any breach by Seller of any of the obligations, agreements, covenants,

provisions, representations or warranties made by Seller herein or in any other agreement

or document. Buyer shall have no obligation or duty to detect or discover latent errors and

omissions of Seller or Agency (including their agents, servants and employees) with

respect to insurance business placed or which should have been placed by Seller prior to

the Effective Date of this Agreement; and Seller shall indemnify, defend or hold Buyer

harmless of any claim with respect to such errors and omissions.

16. BUYER’S INDEMNIFICATION OF SELLER. Buyer hereby agrees to indemnify,

reimburse, hold harmless and defend Seller from any and all debts, claims, taxes, costs

and expenses of any and every nature whatsoever (including attorney's fees) resulting

from (a) its operation and conduct of Buyer’s business following the effective date, (b) any

other financial obligations or liabilities of Buyer, and (c) any breach by Buyer of any of the

obligations, agreements, representations or warranties made by Buyer herein or in any

other agreement or document.

17. NOTICE OF CLAIM. In the event a claim shall be made against Buyer or the Assets

acquired by Buyer hereunder, due to the actions of Seller or on account of a breach by

Seller of any of the terms and conditions hereof, then Buyer shall notify Seller within five

(5) days of receipt of such notice, and upon the failure by Seller within fifteen (15) days of

notice of such claim, to assume the defense of such claim, Buyer shall be permitted and

entitled to defend, settle and pay said claim on its own. The reasonable cost of any such

defense, judgment or settlement, including expenses incurred by Buyer, shall be the

responsibility of Seller.

18. BUYER'S RIGHT OF OFFSET. Any sums which Seller may owe to Buyer hereunder,

whether on account of the obligation to indemnify Buyer for certain actions or on account

of any breach of warranty, representation or covenant herein contained or provided for, or

on account of premiums or commissions which Buyer may be required to pay or allow,

which premiums or commissions are the obligation of Seller, may be offset by Buyer

against any and all sums which Buyer may owe to Seller hereunder; provided, however,

such right of offset shall not relieve Seller of their obligation to indemnify or reimburse

Buyer, as aforesaid, but shall be only as a matter of convenience for Buyer should it elect

to make such offset in whole or in part.

19. PROTECTIVE AND RESTRICTIVE COVENANTS. In recognition of the fact that Seller

has been engaged in a personal service business involving confidential information and

personal relationships with insureds, the success of which business is in large part due to

the exclusive retention of confidential information and continuation of such personal

relationships with customers and prospects, Seller does hereby covenant and agree as

follows and acknowledges that the following covenants are reasonable and necessary for

the protection of Buyer and may be enforced to the extent set forth herein or to such

extent as a court of appropriate jurisdiction may deem reasonable and proper.

(a) All information concerning the Accounts or Policies being acquired under this

Agreement, including expiration data in connection therewith, is confidential

information constituting trade secrets and will be treated as such; and Seller will

not, from the effective date, directly or indirectly, make use of such information for

Seller’s own benefit, or for the benefit of anyone else, except Buyer; nor will Seller,

directly or indirectly divulge such information to anyone.

(b) Except on behalf of or for the benefit of Buyer, Seller will not, for a period of

___________ (__) months following the effective date, directly or indirectly, solicit,

obtain, accept from or in any way transact insurance or financial services business

for any of the Accounts or customers being transferred to Buyer hereunder; nor

directly or indirectly aid or assist any other party in the solicitation or placement of

insurance or financial services business for the customers or Accounts being

transferred hereunder.

months following the date of termination of Seller’s association with Buyer as a

Producer, Seller will not solicit, attempt to obtain, accept or transact insurance or

financial services business; or in any manner engage in the insurance and/or

financial services business for any of the Accounts or customers that Seller may

develop and write business for during the term of the Producer Agreement

between Buyer and Seller.

(d) The promises and covenants of each of the parties provided in Section __ of this

Agreement shall apply within the geographic area of _______________ County,

Texas; and shall apply outside that area only to the extent that the protected

customers or Accounts have operations, locations, or affiliates outside the area. In

the event the provisions of Section __ of this Agreement should be deemed to

exceed the time, scope, or geographic limitations permitted by applicable laws,

then such provisions shall be reformed to the maximum time, scope, or geographic

limitation permitted by such applicable laws.

(e) The parties hereby acknowledge that a breach or threatened breach of the

provisions of Section ___ of this Agreement would cause irreparable harm to

Buyer or the other individuals or agencies that are or that may have been

associated with Buyer, the amount of which would be impossible to calculate in

monetary terms. Should Seller violate or threaten to violate any of the provisions

of this Agreement, then Buyer shall, in addition to its other rights or remedies, be

entitled to injunctive relief to restrain Seller from violation or threatened violation.

Buyer shall not be required to post a bond or other security in connection with such

restraining order(s) and/or injunction(s).

(f) In the event that any action, suit or proceeding, in law or in equity, is brought to

enforce the provisions of this Agreement, and such action results in the award or a

judgment for monetary damages and/or the granting of a restraining order or

injunction in favor of Buyer, Buyer shall also be entitled to recover from Seller all

reasonable expenses incurred, including attorney’s fees, court costs, and other

expenses associated with the matter.

20. PUBLIC ANNOUNCEMENTS. The parties agree that, prior to the Closing hereunder,

except as otherwise required by law, any and all public announcements or other

communications with anyone, whether public or private (including, but not limited to, any

communications to those insurance companies which Seller represents) concerning this

Agreement and the transactions contemplated hereunder, shall be subject to the approval

of all parties.

21. ARBITRATION. Except with respect to the rights of Buyer under Section 15 of this

Agreement, for which a court of competent jurisdiction may grant a restraining order or

injunction in favor of Buyer, the parties hereby agree that any claim or controversy

regarding this Agreement which cannot by settled by Buyer and Seller shall be submitted

to binding arbitration upon the written request by either party to the other. The arbitration

shall be conducted at ______________, Texas, in the absence of and or agreement

otherwise between Buyer and Seller.

Unless both parties agree on a single Arbitrator within fifteen (15) days of the request to

arbitrate, then each party shall select an Arbitrator. The two (2) Arbitrators shall be

disinterested persons, knowledgeable about the insurance agency business in Texas, that

have not engaged in business with either party.

The two (2) Arbitrators shall then select a competent and disinterested person

knowledgeable about the insurance agency business in Texas as a third Arbitrator within

an additional fifteen (15) day period. If the two (2) Arbitrators cannot agree upon a third

Arbitrator within said period, each Arbitrator shall nominate two (2) individuals that are

knowledgeable in the insurance agency business in Texas to serve in that position. The

four (4) nominees’ names shall be placed on identical slips of paper and deposited into an

opaque receptacle by a disinterested person. The person whose name is drawn out by

the disinterested person shall serve as the third Arbitrator.

A decision of any two (2) of the three (3) Arbitrators shall be final and binding on both

Buyer and Seller. The decision shall be in writing signed by the three (3) Arbitrators, and

given to Buyer and Seller within sixty (60) days after the date of the request for arbitration.

Each of the parties to this Agreement agree to bear all the expenses of its selected

Arbitrator and equal shares of all other arbitration expenses; except in the event that a

single Arbitrator is used, in which case each party shall equally bear all arbitration

expenses.

22. NOTICE. Any notices required hereunder shall be in writing and deemed to have been

received (a) on the date delivered if delivered in hand, (b) the next following business day

after being sent if sent by overnight delivery service, or (c) two (2) business days after

mailing, postage prepaid, by certified mail, return receipt requested to the party entitled to

notice at the addresses indicated below, or such other address as may be directed by

written notice given hereafter. A business day shall be deemed any day on which the

United Postal Service shall have regular mail deliveries to the address to which the notice

shall be directed.

If to Buyer: If to Seller:

23. MISCELLANEOUS.

(a) This Agreement may not be modified, revised, altered, added to, or extended in

any manner, or superseded except by an instrument in writing signed by Seller and

Buyer.

(b) This Agreement may be executed in several counterparts, each of which shall be

deemed an original, but all of which together shall constitute one and the same

instrument representing the agreement of the parties hereto.

any way construed as a waiver of any such provision nor prevent that party

thereafter from enforcing each and every provision of this Agreement.

(d) The invalidity or unenforceability of any particular provision of this Agreement shall

not affect the other provisions hereof, and this Agreement shall be construed in all

respects so as to permit the enforcement of each provision hereof to the fullest

extent permitted by law.

(e) This Agreement shall be binding upon and shall inure to the benefit of the parties

hereto and their successors and assigns; provided, however, no assignment by a

party of it rights and/or interest in and to this Agreement shall in any manner

relieve the assigning party of or from any of it obligations, liabilities or undertakings

herein contained. Buyer hereby consents to such assignment of this Agreement

by the Seller; provided, however, Buyer shall not be bound by such assignment

unless and until it shall have received notice that such assignment has occurred

and notice of the terms thereof.

(f) This Agreement (including all Exhibits hereto) contains the entire agreement

between the parties hereto and supersedes any and all prior agreements,

arrangements or understandings between the parties relating to the subject matter

hereof. No oral understandings, oral statements, oral promises, or oral

inducements exist. No representations, warranties, covenants or conditions,

express or implied, whether by statute or otherwise, other than as set forth herein,

have been made by the parties hereto.

(g) This Agreement shall be governed by and construed in accordance with the laws

of the State of Texas. Any legal proceedings (other that arbitration) shall be

conducted solely in the courts of the State of Texas in ______________ County

unless otherwise mutually agreed in writing by Seller and Buyer.

(h) The section headings in this Agreement are for the convenience of the parties, and

in no way alter, modify, or amend, limit or restrict the contractual obligations of the

parties.

IN WITNESS WHEREOF, the parties have each caused this instrument to be executed in their

respective names and on their respective behalf by them individually, or by a duly authorized

owner or officer, effective as of the date first above written, it being understood and agreed that no

signatory hereto shall be bound hereunder until this Agreement shall be executed by all parties

hereto.

___________________________________________ ("Buyer")

By: ___________________________________________

_______________________, President

________________________________ ("Seller")

_____________________________________________

ACKNOWLEDGED AND AGREED:

_____________________________________ ("Agency")

By: __________________________________________

______________________________, ___________

_____________________, INDIVIDUALLY (“Spouse”)

_____________________________________________

EXHIBIT “A”

LIST OF ACCOUNTS

THIS EXHIBIT forms a part of the Purchase And Sale Agreement entered into effective the 1

day

of ______________, 20__, by and between ____________________________, individually

(referred to as “Seller”) and _______________________________________________________,

a Texas Corporation (referred to as “Buyer”).

The following is a list of all Accounts comprising the book of business, customer lists, expirations,

and renewal rights being transferred to Buyer from Seller.

EXHIBIT “B”

FURNITURE / FIXTURE / EQUIPMENT

THIS EXHIBIT forms a part of the Purchase And Sale Agreement entered into effective the 1

day

of ______________, 20__, by and between ____________________________, individually

(referred to as “Seller”) and _______________________________________________________,

a Texas Corporation (referred to as “Buyer”).

The following is a list of all furniture, fixtures, equipment, machines, computers, and peripheral

supplies and business property of Seller and Agency that is being sold and transferred to Buyer

as provided in the Purchase And Sale Agreement:

CONSENT OF SPOUSE

The undersigned, being the spouse of _________________________, does hereby acknowledge

that he / she has read the foregoing Purchase And Sale Agreement executed in connection with

the sale of certain insurance accounts and other assets by _______________________________

to _________________________________________, Inc., a duly organized Texas Corporation,

and / or an entity that is affiliated therewith, and that he / she has had the opportunity to retain

independent counsel in reviewing its terms. The undersigned does, for himself or herself, his or

her heirs, representatives, and assigns, hereby agrees to all terms, conditions and provisions of

said Agreement, and to be bound thereby, and agrees to join in the execution and delivery of any

document required or convenient in carrying out the intentions and purpose of said Agreement.

Spouse: Dated:

_____________________________________ _____________________________