Asset Purchase Agreement

1.   DEFINITIONS .

1.1.   Certain Defined Terms .     As used in this Agreement, except as otherwise set forth herein, each capitalized term shall have the meaning ascribed to such term in Exhibit A .

1.2.   Construction, etc.     Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:  (i) whenever the context requires, the singular includes the plural and the plural includes the singular; (ii) “or” is not exclusive; (iii) a reference to any Person includes such Person’s successors and assigns but, if applicable, only if succession or any assignment to such successors and assigns is not prohibited by this Agreement; (iv) the words “include,” “includes” and “including” and any other words or phrases of inclusion shall not limit the generality of any enumerations or descriptions preceding such terms, and references to “included” matters will be regarded as non-exclusive, non-characterizing illustrations; (v) a reference to any gender includes each other gender; (vi) references to any document, instrument or agreement (A) shall be deemed to include all exhibits, schedules, addenda, riders and other attachments thereto, (B) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (C) shall mean such document, instrument or agreement as amended, modified or supplemented from time to time and in effect from time to time in accordance with the terms thereof; (vii) the words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document; (viii) the section headings contained in this Agreement are for the reference purposes only and shall not affect the meaning or interpretation of any of the provisions of this Agreement; (ix) all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with generally accepted accounting principles for financial reporting in the United States, consistently applied; (x) any reference to any statutory provision includes each successor provision and all applicable laws as to that provision; (xi) “will” has the same meaning as “shall” and, thus, connotes an obligation and an imperative and not a futurity; (xii) “copy” or “copies” means that the copy or copies of the material to which it relates are true, correct and complete; and (xiii) an entity will have knowledge of a particular fact or matter if any of its current directors, officers, managers or similar Persons have knowledge of such fact or other matter, including, in the case of each member of the Seller Group, Barry B. Goldstein, Barry Lefkowitz and Victor Brodsky, and in the case of Buyer, Grossberg and Todd Yomtov).

1.2.1.   This Agreement is a result of negotiations among, and has been reviewed by Seller, Buyer, Shareholder and their respective counsel.  Accordingly, this Agreement shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against any party hereto.

2.   PURCHASE AND SALE OF THE PURCHASED ASSETS.

2.1.   Purchase and Sale .     Upon the terms and conditions of this Agreement, Buyer hereby agrees to purchase and acquire, and Seller hereby agrees to sell, convey, assign, transfer and deliver to Buyer, free and clear of all Liens, the Purchased Assets.

2.2.   Assumption of Liabilities .     As part of the consideration for the Purchased Assets, Buyer shall assume as of the Closing Date and shall pay and discharge or cause to be paid and discharged in accordance with their terms only (A) those Liabilities accruing in respect of periods from and after the Closing Date under the Contracts specifically identified in Schedule 2.2 as to be assumed by the Buyer (collectively, the “ Assumed Contracts ”), but in each case excluding (i) any Liability that relates to a period or portion of a period prior to the Closing Date, and (ii) any Liability based on a breach or alleged breach of any such Contract on or before the Closing Date, (B) Unearned Commissions as provided in Section 6.16 , and (C) the AMS Obligation as provided in Section 2.4.2.4 (collectively, the “ Assumed Liabilities ”).

2.3.   Excluded Liabilities .     Except for the assumption of the Assumed Liabilities, Buyer will not acquire or assume and will have no responsibility for paying, performing or discharging any of Seller’s Liabilities.  No such assumption shall be implied or construed by operation of Law or otherwise.  All Liabilities other than the Assumed Liabilities shall remain the sole responsibility of and shall be retained, paid, performed and discharged solely by Seller.  Without limiting the generality of the foregoing, the excluded Liabilities  include, among other things, each of the following: (i) any liabilities or obligations relating to any consultant, broker, producer, sub-producer employee or former employee of Seller, including any claim by any such Person or any other Person (including brokers with whom Seller has split-commission arrangements or other arrangements) for salary, wages, commissions, vacation or holiday pay, severance pay, sick pay, workers compensation, medical benefits, retirement benefits, any other employee benefits or other benefits of any kind whatsoever, and including any liability or obligation under the New York State Worker Adjustment Retraining Notification Act ( “NY WARN” ) or any corresponding or similar federal or state legislation, or pursuant to other applicable Law, Proceedings or Orders; (ii) any liability or obligation of Seller in respect of any Tax or similar payment obligation to any Tax Authority; (iii) any liability or obligation of Seller in respect of any Contract, whether arising or accruing before or after the Closing Date, including any Leases and any carrier contracts assigned and transferred to Buyer in accordance with this Agreement (except as provided in Section 2.2 with respect to the Assumed Contracts); (iv) all of Seller’s accounts payable and all indebtedness of Seller for borrowed money or otherwise, whether for periods preceding or following the Closing Date (except to the extent they are included in the Assumed Contracts for periods on or after the Closing Date and for the AMS Obligation); (v) any liabilities or obligations to Seller’s customers, clients or accounts, including liabilities relating to customer or client deposits held by Seller in fiduciary accounts in its name; (vi) any liability to any shareholder or Affiliate of Seller or the Shareholder; (vii) any liability arising out of any Proceeding, including any commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental or Regulatory Authority and including any relating to the acts or omissions of Seller or its employees and agents or the operation of the Business; (viii) any liabilities or obligations with respect to Prior Claims; and (ix) any liabilities based on, arising out of or in connection with the execution, delivery or performance by Seller of this Agreement, including all liabilities of Seller for federal, state, county, local or other income, sales, use or other Taxes or assessments of any kind, including any based upon, or related to, the sale of the Purchased Assets, the dissolution of Seller or any action related to any of the foregoing.

2.4.   Purchase Price; Allocation .     The purchase price (the “Purchase Price” ) shall be as follows:

2.4.1.   The Purchase Price for all of the Purchased Assets, other than the Closed Store Book of Business, shall be Two Million Three Hundred Thirty Six Thousand Nine Hundred Fifty Two Dollars ($2,336,952), payable as follows:

2.4.1.1.   One Million Eight Hundred Eighty Six Thousand Four Hundred Nine Dollars ($1,886,409) (collectively, the “ Cash Payment ”), subject to reduction as provided in Schedule 8.1.4 , will be paid to Seller at the Closing by wire transfer (with the reduction amount, if any, being paid to the Escrow Agent as provided for in Schedule 8.1.4 ).

2.4.1.2.   Subject to offset as provided herein, the balance of the Purchase Price in the amount of Four Hundred Fifty Thousand Five Hundred Forty Three Dollars ($450,543) shall be paid by Buyer to Shareholder pursuant to a promissory note substantially in the form attached hereto as Exhibit B (the “ Promissory Note ”).  Seller consents to Buyer’s payment of the Promissory Note to the Shareholder and not to Seller.  The Promissory Note shall be dated as of the Closing Date and will provide for the principal balance to be paid in two equal installments of principal of Two Hundred Twenty Five Thousand Two Hundred Seventy One and 50/100 Dollars ($225,271.50), the first being due on March 31, 2010 and the second being due on September 30, 2010 (the “ Maturity Date ”), together with applicable  interest payments accruing from the Closing Date at the rate of five and 25/100 percent (5.25%) per annum.  All accrued and unpaid interest on the unpaid principal under the Promissory Note to the date of the first such installment shall be due and payable with such first installment, and all accrued and unpaid interest on the unpaid principal remaining after the payment of the first installment, from the date of the first installment to the Maturity Date, shall be due and payable with such second installment on the Maturity Date.

2.4.2.   The Purchase Price for the Closed Store Book of Business shall be an amount equal to sixty percent (60%) ( “Seller’s Share” ) of the Net Commissions Derived from the Closed Stores during the period that begins on the Closing Date and ends on September 30, 2010 (such period being the “Payment Period” ).

2.4.2.1.   The term “Net Commissions Derived from the Closed Stores” means all new and renewed agency billed and direct billed commissions actually collected by the Buyer during the Payment Period from the sale, placement or renewal of insurance products to or for any Person who was a client, customer or account of the Closed Store Book of Business as of the Closing Date (each a “Closed Store Account” ) (as determined pursuant to the provisions of Section 2.4.2.4 ) net of adjustments for unearned or return commissions and other policy audit charges actually deducted therefrom; provided , that Net Commissions Derived from the Closed Stores shall not include (a) any service fees, public adjuster fees, profit sharing payments, overrides, contingent or bonus commissions or income, interest income, or any other miscellaneous income, compensation or revenue of any kind, character or description derived, earned or realized from any source, or any commissions attributable to non-owned business, (b) commissions paid to any third party producing agent or agency or to any third party broker, (c) commissions with respect to the sale, placement or renewal of insurance products to or for any Person who was not a Closed Store Account (including any Person referred to Buyer by a Closed Store Account), or (d) commissions with respect to new insurance products (such as homeowner’s insurance placed for a Closed Store Account who did not have a homeowner’s insurance policy prior to the Closing Date) sold to or placed for any Closed Store Account.  As an illustration of the foregoing, if a Closed Store Account has an insurance policy with respect to an automobile and obtains a policy through Buyer with respect to another automobile, or if an insurance policy for a Closed Store Account is switched through Buyer from one insurance carrier to another, commissions received with respect thereto shall constitute Net Commissions Derived from the Closed Stores.

2.4.2.2.   Subject to offset as provided herein, the Purchase Price for the Closed Store Book of Business shall be paid to Seller as follows:  the Seller’s Share of the Net Commissions Derived from the Closed Stores collected by the Buyer  during each calendar quarter of the Payment Period shall be remitted to BSA or DA, as the case may be, within 20 days after the end of each such calendar quarter, and each such quarterly remittance shall be accompanied by documentation, including carrier commission statements, evidencing the Net Commissions Derived from the Closed Stores actually collected by the Buyer during the applicable quarter from any insurance carriers during such quarter (or, if the 20 ^th day is not a business day, then no later than the next business day), and information as to all Closed Store Accounts who switched insurance carriers during such prior quarter, including the name of, and subcode utilized for the particular Closed Store Account by, the new carrier.

2.4.2.3.   The Buyer shall use commercially reasonable efforts to retain each Closed Store Account for the duration of the Payment Period, and for these purposes “commercially reasonable efforts” means only the same efforts that the Buyer and any Affiliate of the Buyer uses in the ordinary course of its insurance agency business to retain its own insurance agency clients, customers or accounts.  Each Closed Store Account will be assigned to the Buyer’s master producer code, but the Buyer will establish and maintain throughout the Payment Period a subcode under the Buyer’s master code which denotes that the activity associated with the subcode relates only to a Closed Store Account.  The subcode established for a particular Closed Store Account will not be changed during the Payment Period, except to reflect any Closed Store Accounts who switch insurance carriers, as provided in Section 2.4.2.2 .

2.4.2.4.   At the Closing, Seller will provide to Buyer Schedule 2.4.2.4 which will list, as of a date no more than five (5) business days prior to the Closing, each client, customer and account of the Closed Stores that has an active policy as of the date the schedule is provided.  The schedule will be deemed a list of the Closed Store Accounts for purposes of this Agreement, subject to adjustment in case any such Person no longer had an active policy as of the Closing Date.  In addition, at the Closing, the Seller will deliver to Buyer a computer disc which will contain all data, as of a date no more than five (5) business days prior to the Closing, relating to the Current Book of Business and the Closed Store Book of Business on the Seller’s AMS 360 client management computer system (the “ AMS 360 System ”).  Buyer agrees that (i) no representation or warranty is made as to the convertibility of the data contained on the disc from the AMS 360 System (the “ Disc ”) to any system utilized by Buyer and (ii) it shall be responsible for the payment of the amount due for the production of the Disc (the “ AMS Obligation ”).

2.4.2.5.   The   term “Closed Stores” mean only those locations of Seller identified as such on Schedule 2.4.2.5.   Any locations of Seller that are not Closed Stores shall be deemed “Open Stores” and are listed as such on Schedule 2.4.2.5 .

2.4.2.6.   Seller shall have the right, upon reasonable notice, to inspect Buyer’s books and records in connection with the matters provided for in this Section 2.4.2 , but, except for the purposes set forth in Section 6.6.2 , Seller’s right to inspect shall not continue after such time as the Purchase Price for the Closed Store Book of Business has been paid in full.

2.4.3.   Subject to Section 7.5 , the Promissory Note, and any payment of the Purchase Price for the Closed Store Book of Business due under Section 2.4.2. , shall be subject to reduction by Buyer to offset any unsatisfied obligations of the Seller Group arising under this Agreement.  Satisfaction of any Seller Group obligations from the amounts due under the Promissory Note or under Section 2.4.2. shall not operate to waive the obligations of the Seller Group contained in this Agreement for amounts owed by Seller to Buyer in excess of the amounts offset under this Section 2.4.3 , subject to the provisions of Section 7.7 .

2.4.4.   The Purchase Price (including the Purchase Price for the Closed Store Book of Business) shall be allocated as set forth in Schedule 2.4.4 .  Buyer, on the one hand, and the Seller Group, on the other hand, have arrived at this allocation as set forth in Schedule 2.4.4 by arm’s-length negotiation and none of them will take a position (and each of them will cause their respective Affiliates not to take a position) on any Tax Return or before any Governmental or Regulatory Authority charged with the collection of any Tax or in any Proceeding that is in any manner inconsistent with the terms of Schedule 2.4.4 or this Section 2.4.4 without the prior written consent of the other parties to this Agreement.

2.5.   Excluded Assets .     The Purchased Assets shall not include any of Seller’s right, title or interest in or to the following (collectively, “ Excluded Assets ”), all of which are excluded from the sale and purchase contemplated hereunder and shall remain the property of Seller after the Closing:

2.5.1.   all cash, cash equivalents, bank deposits or similar cash items of Seller, including without limitation all customer deposit fiduciary accounts in Seller’s name;

2.5.2.   all Contracts other than the Assumed Contracts;

2.5.3.   all minute books, stock Records and corporate seals;

2.5.4.   all prepaid expenses and security deposits (other than the Lease and Utility Security Deposits and prepaid telephone directory advertising expenses transferred to Buyer);

2.5.5.   all claims for refund of Taxes and other governmental charges of whatever nature;

2.5.6.   all rights of Seller under this Agreement and the documents and instruments entered into by Seller in connection with this Agreement;

2.5.7.   all non-transferable Permits;

2.5.8.   all rights with regard to the editorial content and page layouts comprising Seller’s internet websites;

2.5.9.   all rights with respect to the personal property set forth on Schedule 2.5.9 ;

2.5.10.   all rights with respect to amounts payable by Nonconsenting Carriers; provided , that all rights with respect to amounts payable by any Nonconsenting Carrier shall not be deemed Excluded Assets, but shall instead be deemed Purchased Assets, from and after the date such Nonconsenting Carrier appoints Buyer to sell any of its products and such carrier is no longer a Nonconsenting Carrier pursuant to the provisions of Schedule 8.1.4 ;

2.5.11.   except as provided in Section 2.4.2.5 , all rights with respect to the following licenses: (a) AMS 360; (b) Metafile; (c) Silver Plume; and (d) BSAMS;

2.5.12.   all insurance policies covering Seller as the insured and all rights thereunder;

2.5.13.   all Pre-Closing Overrides;

2.5.14.   except as provided in Section 6.21 , all rights with respect to Seller’s computer servers;

2.5.15.   all rights with respect to claims against Lynn Taylor; and

2.5.16.   all rights with respect to the clients, customers and accounts of the Current Book of Business who reside in the Commonwealth of Pennsylvania and who are identified on Schedule 2.5.16 .

2.6.   Guaranty .  Buyer’s obligation to (a) pay the Promissory Note, the Purchase Price for the Closed Store Book of Business, the Pre-Closing Overrides and an amount equal to sixty percent (60%) of the Post-Closing Overrides and (b) indemnify, defend and hold harmless Seller and Shareholder as provided for herein will be guaranteed by Matthew Grossberg (“ Grossberg ”) pursuant to a guaranty substantially in the form attached hereto as Exhibit C (the “ Guaranty ”).

2.7.   Adjustment to Purchase Price .  At the Closing, an adjustment shall be made to the Purchase Price and the Cash Payment to give effect to any amounts paid by Seller with respect to the real property Leases set forth on Schedule 5.10 that relate to the period on or after the Closing Date.

3.   CLOSING DATE; CLOSING DELIVERIES; TERMINATION .

3.1.   Closing .     Subject to the satisfaction of the conditions set forth in Sections 8.1 and 8.2 hereof (or the waiver thereof by the party entitled to waive that condition), the closing of the purchase and sale of the Purchased Assets (the “ Closing ”) shall take place at such place as Buyer and Seller may mutually agree upon at 10:00 a.m. (Eastern Standard Time) on a date to be specified by the mutual consent of Buyer and Seller, which date shall be no later than five (5) business days after satisfaction or waiver of the conditions set forth in Section 8 hereof (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), unless another time or date, or both, are agreed to in writing by Buyer and Seller.  The date on which the Closing shall be held is referred to in this Agreement as the “ Closing Date ”.  The Closing will be effective as of 12:01 a.m. local time on the Closing Date.  The Business will operate for the benefit of Buyer on the Closing Date.

3.2.   Seller Group Deliveries at Closing .     Subject to the terms and conditions of this Agreement, on the Closing Date the members of the Seller Group, as appropriate, shall execute (as applicable) and/or deliver to Buyer:

3.2.1.   a Bill of Sale in form and substance reasonably satisfactory to counsel for Buyer and the Seller Group (the “ Bill of Sale ”);

3.2.2.   an assignment and assumption agreement with respect to the Assumed Contracts, in form and substance reasonably satisfactory to Buyer and Seller,   and separate assignment and assumption agreements for each of the real estate Leases listed on   Schedule 5.10 ;

3.2.3.   any and all other third party consents required in order to transfer the Purchased Assets to Buyer, including consents to the assignment of the Assumed Contracts and estoppel certificates from all landlords with respect to each of the real estate Leases listed on Schedule 5.10 in form and substance reasonably satisfactory to Buyer, Seller and Lender and a Landlord’s Agreement substantially in the form attached hereto as Exhibit G from each such landlord; provided , however, that:

3.2.3.1.   Notwithstanding the foregoing provisions of Section 3.2.3   to the contrary , Seller will not be obligated to deliver a consent with respect to any of the advertising contracts, copying machine contracts, bottled water contracts, waste removal contracts or alarm contracts set forth on Schedule 2.2 .

3.2.3.2.   Anything in this Agreement to the contrary notwithstanding, (a) in the event an assignment to the Buyer of any real estate Leases   or   other Assumed Contracts   or any claim, right or benefit arising thereunder or resulting therefrom which, without the consent of the lessor, licensor or other similar parties thereto, would result in the Buyer not receiving all of the rights of the Seller thereunder, and/or (b) if any such consent has not been obtained by the Closing Date and the parties have nevertheless elected to proceed with the Closing, such Lease or other Assumed Contract shall be deemed not to have been assigned to the Buyer.  However, the obligations thereof shall nevertheless be deemed to have been assumed by the Buyer and constitute Assumed Liabilities and if requested by the Buyer, after the Closing, the parties who were unable to obtain any such consent will use reasonable commercial efforts to obtain such consent (subject to Section 6.8 ); provided that, if the consent is not obtained and is required to effectively assign any such Assumed Contract to the Buyer, the parties will cooperate with each other in any reasonable arrangement to provide the Buyer with the full claims, rights and benefits thereunder; the foregoing shall not be construed as a limitation on the conditions to the obligation of the Buyer to consummate the transactions contemplated hereby, including the requirement that the consents, estoppels and Landlord’s Agreements be delivered at Closing as provided for in Section 3.2.3 (subject to Section 3.2.3.1 ) , it being understood and agreed that the Buyer shall have no obligation to consummate the transactions contemplated hereby if any such instruments are not so delivered or if any other such conditions are not fulfilled or satisfied;

3.2.4.   a true, correct and complete list of the Current Book of Business as of a date not more than five (5) business days prior to the Closing Date, and Schedule 2.4.2.4 which will be a true, correct and complete list of the Closed Store Accounts as of a date not more than five (5) business days prior to the Closing Date;

3.2.5.   a certificate of an officer of Seller, in form and substance reasonably satisfactory to counsel for Buyer and the Seller Group, certifying as to (i) the incumbency and signatures of the officers of Seller that have or will execute any of the Transaction Documents on behalf of Seller, (ii) the resolutions of the board of directors of each Person comprising the Seller and the Shareholder authorizing the execution, delivery and performance of the Transaction Documents, and (iii) Seller’s certificate of incorporation and bylaws;

3.2.6.   to the extent applicable, evidence reasonably acceptable to Buyer’s counsel of the release of any and all Liens on the Purchased Assets;

3.2.7.   evidence reasonably acceptable to Buyer that as to those employees of Seller being offered employment with Buyer, Seller has, effective as of the Closing Date, terminated all such employees from the Business and has satisfied all obligations of Seller with respect to such terminated employees (including, the payment of salary, bonuses and all other remuneration for all periods through the Closing Date, subject to Section 6.2 ), as required by applicable Laws (including the NY WARN), contract or otherwise;

3.2.8.   an assignment of the telephone number(s), facsimile number(s) and domain names used in connection with the Business, as may be required;

3.2.9.   a certificate of good standing for Seller from the jurisdiction of its organization and from each other jurisdiction in which Seller is authorized or qualified to do business, each dated not later than thirty (30) days prior to the Closing Date;

3.2.10.   a certificate of the Shareholder to the effect set forth in Sections 8.1.1 and 8.1.2 ;

3.2.11.   articles of amendment, effective on the Closing Date, evidencing the change of name of each Person comprising the Seller, as required by Section 6.14 ;

3.2.12.   all other certificates, instruments and documents that are expressly required pursuant to this Agreement to be delivered by the Seller Group to Buyer at the Closing;

3.2.13.   such other bills of sale, endorsements, assignments and such other instruments of transfer and conveyance, in form and substance reasonably satisfactory to Buyer’s counsel, as shall be effective to vest in Buyer as of the Closing Date, good and marketable title, free and clear of any Liens, to all of the Purchased Assets, and otherwise pursuant to Section 9.9 (Further Assurances);

3.2.14.   a final profit and loss statement and consolidated and reconciled final balance sheet dated as of the date of closing; provided that Seller may deliver the same to Buyer not later than May 15, 2009 if the same are not delivered at Closing;

3.2.15.   the Offset Escrow Agreement; and

3.2.16.   a Standby Creditor’s Agreement substantially in the form attached hereto as Exhibit F (the “ Standby Creditor’s Agreement ”).

3.3.   Buyer Deliveries at Closing .     Subject to the terms and conditions of this Agreement, on the Closing Date Buyer shall execute (as applicable) and/or deliver, or cause to be delivered, to Seller:

3.3.1.   the Cash Payment;

3.3.2.   the Promissory Note;

3.3.3.   the Guaranty;

3.3.4.   a certificate of Buyer to the effect set forth in Sections 8.2.1 and 8.2.2 ;

3.3.5.   countersigned copies of the assignment and assumption agreements for the Assumed Contracts and real estate Leases referred to in Section 3.2.2 ;

3.3.6.   all other certificates, instruments and documents that are expressly required pursuant to this Agreement to be delivered by Buyer to Seller at the Closing; and

3.3.7.   the Offset Escrow Agreement.

3.4.   Termination of Agreement .     Seller or Buyer may terminate this Agreement at any time prior to the Closing Date by giving written notice to the other under the following circumstances:

3.4.1.   by mutual consent of Seller and Buyer;

3.4.2.   if the Closing shall not have occurred by the close of business on or before the thirtieth (30th) day after the execution and delivery of this Agreement (or, if the 30 ^th day is not a business day, the next business day) or such later date as Buyer and Seller may agree to in writing (the “ Termination Date ”); provided , however , that if the Closing shall not have occurred on or before the Termination Date due to a material breach of any representations, warranties, covenants or agreements contained in this Agreement by Buyer or Seller, then the breaching party may not terminate this Agreement pursuant to this Section 3.4.2 ;

3.4.3.   if either Buyer or Seller is prohibited by an Order from consummating the transactions contemplated by this Agreement, and such Order has become final and non-appealable;

3.4.4.   by Buyer if, following the date of this Agreement any one or more customers representing, in the aggregate, at least ten percent (10%) of the net revenue derived from the Current Book of Business as of the date hereof terminates its or their business relationship with Seller, cancels its or their policies brokered by Seller or provides notice to Seller of its or their intent to terminate its or their business relationship with Seller or let its or their policies brokered by Seller expire without renewal;

3.4.5.   by Buyer, if any of the conditions to the obligations of Buyer set forth in Section 8.1 shall have become incapable of fulfillment other than as a result of a breach by Buyer of any covenant or agreement contained in this Agreement, and such condition has not been waived by Buyer in writing;

3.4.6.   by Seller, if any condition to the obligations of Seller set forth in Section 8.2 shall have become incapable of fulfillment other than as a result of a breach by Seller of any covenant or agreement contained in this Agreement, and such condition has not been waived by Seller in writing;

3.4.7.   by Buyer, if there shall be a breach by any member of the Seller Group of any representation or warranty made by such member, or any covenant or agreement contained in this Agreement, in either case which would result in a failure of a condition set forth in Section 8.1 and which breach cannot be cured or has not been cured by the earlier of (i) ten (10) business days after the giving of written notice by Buyer to Seller of such breach or (ii) the Termination Date; or

3.4.8.   by Seller, if there shall be a breach by Buyer of any representation or warranty made by Buyer, or any covenant or agreement contained in this Agreement, in either case which would result in a failure of a condition set forth in Section 8.2 and which breach cannot be cured or has not been cured by the earlier of (i) ten (10) business days after the giving of written notice by Seller to Buyer of such breach or (ii) the Termination Date.

3.5.   Effect of Termination .

3.5.1.   Subject to Section 3.5.2 below, if this Agreement is terminated by Buyer or Seller as permitted by   Section 3.4 , then each of the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to Buyer or Seller.   In no event shall Buyer have or incur liability to the Seller Group, or Seller Group have or incur liability to Buyer, for incidental, consequential, punitive, indirect or special damages.

3.5.2.   Nothing in this Section 3.5 shall relieve any or all members of the Seller Group or Buyer of any liability for a breach of this Agreement prior to the date of termination.  The damages recoverable by Buyer upon a breach by any member of the Seller Group shall include all attorneys’ fees, and the fees of other professional advisors, reasonably incurred by Buyer in connection with the transactions contemplated hereby.  The damages recoverable by Seller Group upon a breach by Buyer shall include all attorneys’ fees, and the fees of other professional advisors, reasonably incurred by Seller Group in connection with the transactions contemplated hereby.

4.   BUYER REPRESENTATIONS AND WARRANTIES .     Buyer represents and warrants to Seller as follows, knowing and intending that Seller will rely thereon in entering into and performing this Agreement:

4.1.   Organization and Authority .     Buyer is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware.  Buyer has the requisite power and authority to enter into this Agreement and to perform its obligations under this Agreement.  The signing, delivery and performance of this Agreement by Buyer have been duly authorized by Buyer, and no further action is required on Buyer’s part in order to authorize this Agreement or the transaction contemplated by this Agreement.  Buyer has all requisite power, authority and legal capacity to execute and deliver each Transaction Document to which it is a party, to perform its obligations under each such Transaction Document, and to consummate the transactions contemplated by each such Transaction Document.  This Agreement is the legal, valid and binding obligation of Buyer duly enforceable against Buyer in accordance with its terms.

4.2.   No Conflict or Violation .     Neither the signing and delivery of this Agreement and the other Transaction Documents by Buyer nor the performance by Buyer of the transaction contemplated by this Agreement will result in:  (i) a violation or conflict with Buyer’s formation or governing documents; (ii) a violation of any Laws or any Order to which Buyer is subject; or (iii) a breach or default under any mortgage, indenture, deed of trust or other Contract to which Buyer is a party or is otherwise subject.

4.3.   No Broker’s or Finder’s Fees .     No broker, finder, financial advisor or other person acting in a similar capacity has acted directly or indirectly for Buyer in connection with this Agreement or the transaction contemplated by this Agreement. 

4.4.   Consents and Approvals .     The signing, delivery and performance by Buyer of this Agreement and the other Transaction Documents does not require consent, approval or authorization from, or any declaration, filing, registration or notice with or to, any Governmental or Regulatory Authority or any other Person.

4.5.   Appointed Carriers .   Schedule 4.5 contains a true, complete and correct list of each insurance carrier for which Buyer or any Affiliate thereof (including N.I.I. Brokerage, L.L.C. (“N.I.I.”)) has been appointed as an agent.  Except as disclosed in Schedule 4.5 , (a) all of the agency agreements to which Buyer or any Affiliate thereof is a party are valid, binding and in full force and effect, (b) no notice of termination has been received by Buyer or any Affiliate thereof with respect to any agency agreement and, to the knowledge of Buyer, no insurance company has threatened to cancel or terminate any agency agreement with Buyer or any Affiliate thereof, and (c) to the knowledge of Buyer, there are no existing defaults, or events which with or without the passage of time or the giving of notice, or both, would constitute material defaults by Buyer or any Affiliate thereof or by any other party to any such agency agreements.

5.   SELLER GROUP REPRESENTATIONS AND WARRANTIES .     Each member of the Seller Group, jointly and severally, represents and warrants to Buyer as follows, knowing and intending that Buyer will rely thereon in entering into and performing this Agreement:

5.1.   Organization and Authority; Capitalization .

5.1.1.   BSA is a corporation duly organized, validly existing and in good standing under the Laws of the State of New York.  DA is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware.  Seller has the requisite power and authority to own the Purchased Assets and to carry on the Business as presently conducted.  Seller is duly qualified, licensed and authorized to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of the Business or the character or location of the Purchased Assets makes such qualification or licensing necessary.  Copies of (i) BSA’s Certificate of Incorporation and all amendments, certified by the New York Department of State as being true and accurate, (ii) DA’s Certificate of Incorporation and all amendments, certified by the Delaware Department of State as being true and accurate, and (iii) Bylaws, as amended, certified by Seller’s respective corporate secretary as being true, accurate and complete, are being delivered to Buyer together with this Agreement.  The sole shareholder of Seller is Shareholder.  No Person has any right or option to acquire shares of Seller’s stock from Seller or Shareholder.

5.1.2.   The signing, delivery and performance of this Agreement by Seller have been duly authorized by Seller’s board of directors and by Shareholder, as Seller’s only shareholder, and no further action is required on the part of Seller in order to authorize this Agreement or the transaction contemplated by this Agreement.  Each member of the Seller Group has all requisite power, authority and legal capacity to execute and deliver each Transaction Document to which it is a party, to perform its obligations under each such Transaction Document, and to consummate the transactions contemplated by each such Transaction Document.  This Agreement is the legal, valid and binding obligation of each member of the Seller Group, duly enforceable against each of them in accordance with its terms.

5.2.   Operation of the Business .     The Business is conducted only by Seller and not through any Affiliate or other Person.  No Affiliate or other Person, including but not limited to any employee, broker or producer, owns or has any right or interest in the Business or any of the Purchased Assets, or any right to receive fees on account of the Business or the revenues derived therefrom.  The Business and all of the Purchased Assets are owned or held exclusively by Seller and not by any other Person.  Seller does not conduct any business or activity other than the Business.  Seller does not own, directly or indirectly, any equity, securities or other interests in any Person and, insofar as the Business is concerned, is not a member of and does not otherwise participate in any partnership, joint venture, strategic alliance or other collaborative or cooperative arrangement, whether written or oral, or whether by practice or custom or course of dealing.  Seller has no subsidiaries and no Affiliates except the Shareholder.

5.3.   No Conflict or Violation .     Neither the signing and delivery of this Agreement and the other Transaction Documents by the Seller Group nor the performance by the Seller Group of the transaction contemplated by this Agreement and the other Transaction Documents will result in: (i) a violation or conflict with Seller’s certificates of incorporation or bylaws; (ii) a violation of any Laws or any Order to which Seller, the Business or any of the Purchased Assets are subject; (iii) the imposition of any Lien against the Purchased Assets; (iv) the loss, revocation or nonrenewal of any material Permit; or (v) a breach or default under any Contract to which any member of the Seller Group is a party or by which any member of the Seller Group is bound.

5.4.   Ordinary Course; Absence of Certain Events .     Since December 1, 2007, except for the closure of the Closed Stores, the Business has been operated only in the ordinary course and, except as set forth on Schedule 5.4 , there has been no: (i) entry into, termination of or receipt of notice of termination of or indication by any Agency or Producer of any intent to terminate any Agency Agreement or Producer Agreement to which Seller is a party; (ii) damage to or destruction or loss of any Purchased Asset; (iii) indication by any customer of Seller of an intention to discontinue or change the terms of its relationship with Seller or to cancel or not renew any policy constituting a part of the Current Book of Business or the Closed Store Book of Business (except for any discontinuance, change, cancellation or non-renewal which would not, either individually or together with other such discontinuances, changes, cancellations or non-renewals, have a material adverse effect on the Business); or (iv) other material adverse change in the Business.

5.5.   Consent and Approvals .     Except as set forth on Schedule 5.5 , the execution, delivery and performance of this Agreement by Seller (including, without limitation, the assignment of the Assumed Contracts, the Current Book of Business and the Closed Store Book of Business to Buyer) does not and will not require any consent, approval, appointment or authorization from, or any declaration, filing, registration or notice with or to, any Governmental or Regulatory Authority or any other Person.

5.6.   Absence of Litigation .     There are, and during the past three years, there have been, no Proceedings pending or, to the knowledge of any member of the Seller Group, any claims or investigations made or Proceedings threatened against or involving Seller, the Business or the Purchased Assets except for Proceedings which have been settled for an aggregate out-of-pocket amount from Seller to the claimants of not in excess of $30,000.  There are no outstanding Orders related to the Business against any member of the Seller Group or, to the knowledge of any member of the Seller Group, any producers or employees involved on behalf of Seller in the Business.  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 for 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 a petition is filed by any third party, it shall be promptly discharged by Seller.  Seller has not made any assignment for the benefit of creditors or admitted in writing its inability to pay its debts as they come due.

5.7.   Compliance with Laws; Permits .

5.7.1.   Seller (and each other member of the Seller Group insofar as it relates to the Business or the Purchased Assets) has been in the past and is now in compliance in all material respects with all Laws applicable to Seller and the Business.  No member of the Seller Group has received written notice of a violation or alleged violation of any Laws related to the Business which has not been rectified or which remains outstanding and, to the knowledge of each member of the Seller Group, no such outstanding violation exists or material violation has occurred.

5.7.2.   Seller has all Permits necessary for the conduct and operation of the Business as presently conducted.   Schedule 5.7.2 lists all such Permits.  To the extent the Business is required to be operated or conducted by individuals who are duly licensed or hold applicable Permits, all such individuals have the required Permits, all of which are listed on Schedule 5.7.2 .  The Permits are in full force and effect.  Except as set forth on Schedule 5.7.2 , Seller has been, and is now, conducting the Business in material compliance with the Permits and, to the knowledge of the Seller Group, no Proceedings are pending or threatened to limit, not renew or revoke, or to impose or require any extraordinary action with respect to, any Permit.  Seller has timely filed all material reports, registrations, statements, renewal applications and other submissions that are required pursuant to any Permit to be filed with any Governmental or Regulatory Authority having jurisdiction over the Business.

5.8.   Intellectual Property .      Schedule 5.8 lists all registered or unregistered trademarks, service marks, tradenames, business names, alternate names, patents and patent applications, registered copyrights, logos and Internet domain names and address registrations owned or used under license by each Person comprising the Seller or from which the Business otherwise benefits (collectively, “ Intellectual Property ”).  Seller has the right to use the Intellectual Property, and except as set forth on Schedule 5.8 or to the extent it is an Excluded Asset, Buyer will have the right to use the Intellectual Property on and after the Closing Date.  There are no Proceedings pending or, to the knowledge of the Seller Group, threatened, asserting that Seller’s use of the Intellectual Property infringes the rights of any Person.  No member of the Seller Group has knowledge of any infringement upon any Intellectual Property by any Person.

5.9.   Title to Purchased Assets .     Seller has and will deliver to Buyer good title to all of the Purchased Assets, free and clear of all Liens.  Except as set forth on Schedule 5.9 , each asset that is necessary for the realization of all the revenue generated by the Business or is otherwise owned, used or held for use in connection with the Business as now conducted constitutes a Purchased Asset.  No Person other than Seller owns, holds or, to the knowledge of the Seller Group, claims any beneficial interest, ownership, option to purchase or right of first refusal or Lien of any kind in or to the Purchased Assets, and none of the Purchased Assets is subject to any purchase money lien, title retention agreement or other financing arrangement.  Seller has not leased or licensed any of the Purchased Assets for use by any other Person.

5.10.   Real Estate; Environmental .     Seller does not own any real property.   Schedule 5.10 contains a complete listing of the locations of Seller’s offices and all real property Leases to which Seller is a party.  No office locations are occupied by Seller under Lease or other right of use or occupancy except as set forth in Schedule 5.10 .  All Leases listed in Schedule 5.10 are in full force and effect.  Seller has not subleased or licensed any of the office locations listed on Schedule 5.10 or assigned any of Seller’s rights under any real property Leases to any other Person, and no Person except Seller has the right to occupy or use the office locations listed on Schedule 5.10 .  No security deposit paid by Seller under any of the Leases listed in Schedule 5.10 has been applied, refunded or otherwise disbursed by the applicable landlord.  Seller has received no written notice that Seller is in default under any of the Leases listed in Schedule 5.10 .  There are no material existing defaults on the part of Seller or, to Seller’s knowledge, any other party under any of the real property Leases, and no events have occurred or conditions arisen which, with the passage of time or the giving of notice or both, would constitute a material default under any such Leases.   Schedule 5.10 accurately sets forth the actual commencement date, the scheduled expiration date, a description of any renewal options (none of which have been exercised by Seller), the current monthly base rent paid by Seller, the current security deposit posted by Seller and held by the landlord and, to the extent reasonably ascertainable by Seller, the current annual or monthly (as applicable) payments for real estate taxes, insurance premiums, and common area maintenance or other operating expenses due and payable under each of the real property Leases.  True and complete copies of the real property Leases listed in Schedule 5.10 , including any amendments, have been delivered to Buyer.  Seller and the Business are in compliance in all material respects with all Environmental Laws.  Except for routine quantities of office supplies and cleaning supplies held for use in the ordinary course of the Business in compliance with Laws, the operations of the Business do not include or involve and have never included or involved any use, storage or disposal of Hazardous Materials.

5.11.   Book of Business .     The list of the Current Book of Business and the Closed Store Book of Business to be delivered to Buyer at the Closing will be true, correct and complete, and such list will contain all current customers of Seller as of a date not more than five (5) business days prior to the Closing Date.  Seller has not directly or indirectly provided any third party (other than AMS) with Seller’s customer account list Client Information, or any other information comprising or concerning the Current Book of Business or the Closed Store Book of Business, and to the knowledge of the Seller Group no third party has had or currently has access to any such information other than the insurance carriers with whom business is placed for the customers of Seller.  No member of the Seller Group has received written notice of any kind (whether on a commission statement or otherwise) that any customer account comprising a portion of the Current Book of Business or the Closed Store Book of Business has canceled or non-renewed or intends to cancel or non-renew other than due to the failure to pay premiums when due in the ordinary course of business, and all such non-renewals or cancellations resulting from the failure to pay premiums when due, in the aggregate, represent less than ten percent (10%) of the total Current Book of Business (measured in terms of Gross Commission) and less than ten percent (10%) of the Seller 2008 Commission Amount.  None of the customer accounts constituting part of the Current Book of Business or the Closed Store Book of Business represents business that has been brokered by Seller on behalf of a third party.

5.12.   Gross Commissions; Agency Agreements; Producer Agreements .

5.12.1.   Seller’s Gross Commissions earned from the Open Stores for the annual period beginning on December 1, 2007 and ending on November 30, 2008 were not less than $2,225,669; and Seller’s Gross Commissions earned during such period from the Closed Stores was not less than $443,368.  All of Seller’s Gross Commissions from both the Open Stores and the Closed Stores during said period constitute all of Seller’s Gross Commissions earned during said period and all such Commissions derive from bona fide transactions in the ordinary course of the Business.   Schedule 5.12.1 lists and describes all agreements or other arrangements whereby Seller shares, splits or otherwise divides commissions with any third party agency, broker, producer or other Person.  Except as set forth on Schedule 5.12.1 , there were no reductions or payouts in respect of either (a) the Seller 2008 Commission Amount, or (b) the amount set forth above in this Section 5.12.1 with respect to the Closed Stores and no reductions or payouts are reasonably anticipated from future Gross Commissions of the Business.

5.12.2.   Schedule 5.12.2 contains a true, complete and correct list of each Agency Agreement and sets forth a true and correct list of the revenue received by Seller from each of its appointed carriers and assigned risk carriers during the twelve (12) month periods ended December 31, 2007 and December 31, 2008.  Seller has delivered to Buyer a true, complete and correct copy of each such Agency Agreement.  Except as disclosed in Schedule 5.12.2 , (a) all of the Agency Agreements are valid, binding and in full force and effect, (b) no notice of termination has been received by Seller with respect to any Agency Agreement or any of Seller’s business thereunder, and to the knowledge of the Seller Group, no insurance company has threatened to cancel or terminate or modify any Agency Agreement or any of Seller’s business thereunder, (c) to the knowledge of Seller, there are no existing defaults, or events which with or without the passage of time or the giving of notice, or both, would constitute material defaults by Seller or by any other party to any such Agency Agreements, and (d) it is the intent of Seller to so transfer and assign all such business to Buyer as a part of the Purchased Assets.

5.12.3.   Seller is not a party to, and neither Seller nor the Business is bound by, any Producer Agreement.

5.13.   Contracts .      Schedule 5.13 sets forth a complete and correct list of all Contracts, whether written or oral, related to the Business or to which Seller is a party or by or to which the Seller or its assets or properties are bound or subject.  All of the Contracts set forth on Schedule 5.13 are in full force and effect and Seller has paid in full all amounts due to date thereunder and has satisfied in full all of its other material liabilities and obligations to date.  Seller is not in default under any Assumed Contract (true, correct and complete copies of which have been provided to Buyer) nor is any other party to any Assumed Contract in default, and there does not exist any condition which, with the giving of notice or the lapse of time or both, would constitute a material default under any Assumed Contract.

5.14.   Personnel .      Schedule 5.14 sets forth (i) the name, date of hire, position and the total compensation (including base salary, commissions and other forms of compensation) of each current employee, consultant and agent of the Business (including the Executive Employee) in calendar years 2007 and 2008, and (ii) all commitments or agreements by Seller to increase the compensation or modify the conditions or terms of employment or engagement of any such employee, consultant or agent whether or not in the ordinary course of business whether or not consistent with past practice.  Seller has provided Buyer with true, correct and complete copies of all written agreements with its employees, consultants and agents (including the Executive Employee) relating to the employment of such Persons or their ability to compete with Seller or the Business, and all such agreements are listed on Schedule 5.14 .

5.15.   Brokers; Powers of Attorney .

5.15.1.   No member of the Seller Group has employed or engaged any broker, financial advisor, finder or similar intermediary and no member of the Seller Group has incurred or will incur any broker’s, finder’s or similar fees, commissions or expenses in connection with sale of the Purchased Assets contemplated by this Agreement.

5.15.2.   The Seller Group has not granted any power of attorney to any Person (other than to Buyer) for any purpose whatsoever with respect to the Business or the Purchased Assets, which power of attorney is currently in force.

5.16.   Tax Matters .      Except as set forth on Schedule 5.16 :

5.16.1.   All federal, state and local income and franchise and all other Tax Returns required to be filed by or with respect to Seller or the Purchased Assets have been timely filed with the appropriate Tax Authorities in all jurisdictions in which such Tax Returns are required to be filed (taking into account any extension of time to file granted or to be obtained on behalf of Seller) and such Tax Returns are true, correct and complete in all material respects.  All Taxes due and payable by or with respect to Seller or the Purchased Assets, whether or not shown on such Tax Returns, have been timely paid in full.  Seller has established appropriate accruals and reserves for Taxes with respect to current periods which are not yet due and payable.

5.16.2.   All Taxes required to be withheld by Seller (including, without limitation, withholding Taxes for employees) have been withheld and have been (or will be) duly and timely paid to the proper Tax Authority.

5.16.3.   No written agreement or other document extending, or having the effect of extending, the period of assessment or collection of any Taxes of Seller is still in effect with any Tax Authority.

5.16.4.   No deficiencies with respect to Taxes of Seller have been asserted in writing by any Tax Authority that have not been fully paid.

5.16.5.   There are no audits or investigations by any Tax Authority of Seller in progress with respect to any Tax and no written notice has been received that a Tax Authority intends to commence any such audit or investigation.

5.16.6.   No claim has been made in writing within the past five (5) years by a Tax Authority in a jurisdiction where Seller does not file Tax Returns that it is or may be subject in that jurisdiction to a Tax.

5.16.7.   Seller is not a party to any Tax allocation, indemnity or sharing agreement or arrangement with respect to a Tax that could apply to the Purchased Assets after the Closing Date.

5.16.8.   Seller does not pay and is not required to pay any State sales tax, Seller has not reported the payment of sales tax on any Tax Return filed by Seller, and Seller has no State sales tax liability.

5.17.   Tangible Personal Property .      Schedule 5.17 sets forth a true and complete list of all material Tangible Personal Property owned or leased by Seller.  Except as set forth on Schedule 5.17 , the Tangible Personal Property owned by Seller is in good working order, ordinary wear and tear excepted, and sufficient for the conduct of the Business in the ordinary course.

5.18.   Inventories .     Except for routine office supplies, Seller has no inventories.

5.19.   Insurance .      Schedule 5.19 contains a true, correct and complete list, and Seller has made available to Buyer true and complete copies, of all insurance policies, binders or self-insura