Specimen Cluster Agreement

1.1 For purposes of this Agreement, the following words and phrases shall mean and be defined as follows:

2.1 The Parties hereto agree to organize a new corporation under the laws of the Commonwealth of Massachusetts in accordance with the Articles of Organization annexed hereto as EXHIBIT A to be known as COLORFUL INSURANCE SERVICES, INC., hereinafter referred to as 'CIS.'

2.2 The By-Laws of CIS shall be in the form of EXHIBIT B annexed hereto.

2.3 Each Party shall subscribe to and purchase the number of shares of common voting stock of CIS as set forth on EXHIBIT C annexed hereto and shall pay the subscription price upon demand by CIS.

2.4 No Party shall sell, give, bequeath, convey, hypothecate, pledge or in any manner transfer ownership of or encumber any or all of the stock of CIS which shall be owned by a Party except in accordance with the terms of this Agreement. All stock certificates evidencing such shares shall be endorsed with the following restrictive legend:

'This certificate is transferable on the books of Colorful Insurance Services, Inc., only upon compliance with the provisions of an Agreement dated ____________, 19__, among said Company and its Stockholders, a copy of which will be supplied to the holder of this certificate upon written request to the Clerk of said Company.'

2.5 CIS shall purchase from the Parties hereto those articles of tangible personal property owned by the Parties as identified and described on EXHIBIT D annexed hereto for the purchase price set forth thereon. Said purchase price shall be payable in full within 30 days from the date on which CIS shall commence operations.

2.6 On the date on which CIS shall become operational, it shall hire those certain persons who are now employed by the Parties hereto as identified on EXHIBIT E annexed hereto upon such terms and conditions as shall be mutually acceptable to such persons and the Board of Directors of CIS.

2.7 There shall be no transfer hereinafter to CIS by any Party of any incident of ownership of the Accounts now or hereafter owned by any party, including expirations and expiration data with respect thereto, which customer lists and records with respect thereto as well as additional Accounts produced by a Party hereafter shall be and remain the exclusive property of such Party.

2.8 No shares of stock of CIS shall be issued to anyone at anytime except as provided on EXHIBIT C hereto except upon the affirmative vote of the holders of not less than 80 percent of the issued and outstanding voting stock of CIS.

2.9 CIS shall not assume any liability of any of the Parties, all of which remain the exclusive individual liability of each of the Parties. No individual Party shall assume any liability of any other Party hereto.

2.10 CIS shall provide all usual and customary services of an insurance agency with respect to administration, accounting, servicing, marketing, claims and other services. Each Party shall provide its own personnel for production of business and to serve as the primary liaison or contact with its Accounts to such extent as it shall deem necessary and appropriate.

2.11 CIS shall provide all office space, equipment furniture and supplies necessary and appropriate to the proper and efficient operation of CIS. Assignment of office space shall be as designated on EXHIBIT F annexed hereto. Each Party shall pay rent to CIS for the use of its designated space at the initial rate of $ _________ per square foot per annum.

2.12 Rent set forth in Section 2.11 hereof has been estimated with the intent of covering the cost of operation of the premises but not the cost of personnel, equipment and supplies. CIS shall have the right to revise said rent at reasonable intervals, if necessary, to adjust for changes in costs of operating the premises. It is the intention that CIS shall set rents at a level reasonably estimated to recover the entire cost of operation of said premises but not to generate a profit.

2.13 CIS shall have the right to reallocate space and to allocate the use of CIS personnel, equipment and supplies based upon the reasonable exercise of its judgment from time to time during the term hereof.

2.14 The legal relationship between CIS and each of the Parties, in addition to the fact that each Party shall be a shareholder of CIS, shall be that of agent (CIS) and broker (Party). Except as provided herein, in the By-Laws of CIS and in such rules, regulations and procedures as may be established by CIS and disseminated to the Parties, the said agent-broker relationship shall be governed by and construed in accordance with the laws of and the custom and practice prevailing in the Commonwealth of Massachusetts.

2.15 Upon the organization of CIS and its legal existence, but prior to the time CIS shall become operational and as a condition precedent thereto and to the obligations of the Parties hereto, CIS shall subscribe to this Agreement as provided hereinafter.

3.1 At such time as CIS shall be duly licensed for the purposes set forth herein by the Commonwealth of Massachusetts, each of the Parties hereto, subject to prior approval of the pertinent insurance companies involved, shall transfer to CIS all of the agency agreements with each of the insurance companies which each of the Parties hereto represents as an agent. In the event an insurance company shall decline to permit such transfer and shall decline to appoint CIS as its agent, then the Party shall use its best efforts to maintain such agency agreement in its name and shall make use thereof only in accordance with the provisions hereof.

3.2 All insurance business whether property, casualty, life or other including bonds which may be written or renewed by a Party with an effective date of coverage following the date on which CIS shall become operational, shall be written or renewed only through the facilities of CIS and in the name of CIS as agent of record. To the extent that CIS shall be unable to place such business through its facilities including its use of general agency agreements which may remain in the name of any specific Party as aforesaid, then, in that event, CIS shall endeavor to place such business through markets outside of its general agency facilities and shall use its best efforts to do so; such business shall be placed only in the name of CIS. Only to the extent that CIS shall be unable to place any specific piece of business shall any Party be authorized to place such business outside of the facilities of CIS in the name of the Party rather than CIS.

3.3 CIS shall provide and be responsible for the billing and collection of premiums due on business written in its name. CIS shall provide each Party with weekly reports of all outstanding accounts receivable on business written by CIS for Accounts owned by each Party. In the event that premiums shall remain unpaid to CIS for a period of more than 45 days after the billing date, the Party whose Account is so delinquent shall pay to CIS on demand the gross premium due thereon unless, prior to the expiration of such 45 day period, the Party shall have instructed CIS to cancel for non-payment of premium any such business. Even in the event of such cancellation for non-payment of premium, should CIS be liable for an earned premium on account of such business, the Party whose business shall be so cancelled shall remit to CIS the net (gross less commission) premium due thereon upon billing to it by CIS.

3.4 CIS shall provide each Party with a monthly accounting of all insurance business written on behalf of a Party during the preceding month identifying thereon all transactions which shall have occurred during the preceding month with respect to a Party's Accounts. Each Party shall have full and complete access to the books and records of CIS at any time for any reasonable purpose provided that it shall be upon reasonable advance request and during such times and upon such conditions as shall not unreasonably impair the operations of CIS.

3.5 CIS shall account for and remit to the Parties on a monthly basis in arrears on or before the last day of the month following the month in which it shall book Net Annual commissions an amount equal to _______ percent of all Net Annual Commissions which it shall receive for the writing or renewal of insurance business on behalf of Accounts owned by a Party and shall retain the balance thereof.

3.6 CIS shall receive and retain all so-called contingent, bonus and/or profit sharing commissions which may be due from insurance companies on account of business placed by CIS.

3.7 Each Party shall be responsible for repayment to CIS of all return commissions which may be due on account of cancellation of or endorsement to insurance coverage or on account of nonpayment of premium in proportion to the percentage of commission which shall have been paid to the Party. CIS shall be entitled to set off such return commissions on monthly accountings and payments due the Parties; provided, however, if for any reason the amount of such return commissions shall exceed what is due from CIS to a Party for the month in question, CIS shall be entitled to payment from such Party of such return commissions which shall be due and payable by the Party upon demand.

3.8 Each Party shall remain individually responsible for collection of its accounts receivable with respect to insurance business written by a Party prior to the time CIS shall become operational; provided, however, CIS shall assume the function of collecting such receivable on behalf of a Party if the Party shall so request. Should CIS be requested to collect any such receivables, it shall do so diligently and account for and remit to the Party for which it shall collect receivables on a weekly basis for such collections. CIS shall not be obligated to expend any extraordinary funds to effect such collection other than stationery, postage and other normal office costs including time of its employees. CIS shall not be required to utilize the services of collection agencies or attorneys. CIS shall retain 2 percent of all such receivables as it shall collect as compensation for its services. A Party who has authorized CIS to collect receivables for it at anytime may remove such receivables from CIS and proceed to collect the same on its own; in which event, no portion of the premium not actually collected by the efforts of CIS shall be payable to CIS.

3.9 Each Party shall remain individually responsible for repayment of all return commissions as may be due on account of business written by it prior to the time CIS shall become operational.

3.10 Each Party shall be entitled to all commissions on endorsements to insurance, which endorsements were processed by the Party prior to the date CIS shall become operational.

3.11 CIS shall be entitled to receive and retain commissions on endorsements to existing insurance effective prior to the date CIS shall become operational regardless of the effective date of the endorsement if CIS shall process the endorsement, provided that CIS shall remit to the Party for whose Account the endorsement shall have been processed the same percentage of commission stated in Section 3.5 hereof and in the manner provided for in said Section 3.5.

3.12 CIS shall provide a policy of errors and omissions insurance with limits of liability of $1 million in the aggregate per occurrence upon such terms and conditions as CIS shall deem to be reasonable and appropriate and shall name thereon as a named insured each of the Parties hereto. In the event CIS shall be unable to provide such coverage for or on behalf of any Party, CIS shall notify such Party immediately upon learning of such inability, and each Party shall then take all necessary and reasonable steps to obtain a policy of errors and omissions insurance in its own name with limits of liability as aforesaid and shall provide CIS with a copy of the declaration page of such policy upon demand.

3.13 All insurance business produced by a Party shall be coded on the books of CIS to indicate ownership thereof by such Party. Commissions due on account of such business shall be paid only to the Party to which it shall be coded. So long as such business shall be written through the facilities of CIS, CIS shall not be authorized or permitted to change the coding of such business without the written consent of the Party to which it shall be coded.

3.14 Each Party shall bear its own selling and business promotion expenses.

No Party shall have any authority to incur any liability in the name of or on behalf of CIS. No Party shall bind any insurance in the name of CIS except in accordance with the authorization and procedures established by CIS from time to time.

3.15 A Party shall be authorized to conduct business in its own name with or without indicating its association with CIS as it may elect; provided, however, that any reference to CIS in any advertising or promotional materials used by any Party shall be subject to the prior written consent of CIS before it shall be used.

3.16 No percentage of Net Annual Commissions shall be due to a Party under any section of this Agreement unless and until the full commission on the subject business shall have been paid to CIS. Notwith-standing the foregoing, CIS may elect to account for and pay commissions based on business when written or booked; provided, however, in such case the Party to whom any commissions shall be paid on such basis shall be liable for repayment thereof to CIS upon demand in the event the full commission remains unpaid to CIS.

4.1 Each Party acknowledges that all information with respect to the Accounts owned by each of the Parties hereto is confidential information constituting trade secrets and shall be treated as such both during the time a Party shall be a Party to this Agreement and forever thereafter. No Party shall divulge any such confidential information to anyone without the consent of the Party which is the owner thereof. No Party shall make, create or retain any lists of Accounts or information with respect to Accounts of any other Party hereto.

4.2 Both during the time a Party shall be a Party hereto and for a period of five years thereafter, no Party shall, directly or indirectly, on its own or on behalf of another, solicit, accept, write or in any manner transact insurance business from, for or on behalf of an Account which shall be owned by another Party hereto nor, during the term hereof, shall a Party knowingly solicit, accept, write or in any manner transact insurance business from, for or on behalf of a prospective Account which shall be under active solicitation by another Party hereto.

4.3 In the event that a Party, unintentionally and inadvertently, shall solicit insurance business from an Account or prospect of another Party, then upon learning that it shall be an Account of another Party, the soliciting Party shall withdraw from the solicitation thereof and shall so notify the Party who shall be the owner of the Account. Such Parties may then make any arrangements which may be mutually agreeable to them; provided, however, until the Party to which such Account is coded on the books of CIS shall notify CIS of the terms of such mutual agreement, the Account shall remain coded to the original Party owner thereof.

4.4 Upon termination as a Party to this Agreement, no Party, for a period of three years following such termination, shall hire or be associated in business with any person who was an employee on the date of such termination by a Party or who was an employee at any time within 90 days prior to such termination, nor shall any Party at anytime while it shall be a Party hereto or at anytime thereafter induce any employee of CIS to terminate such employment.

5.1 Each corporate Party hereto does hereby warrant and represent that it is duly organized, existing and in good standing under the laws of the Commonwealth of Massachusetts and is duly licensed as a full insurance broker under the laws of said state, which license is in full force and effect and in good standing as of the date hereof.

5.2 Each individual Party hereto is a resident of the Commonwealth of Massachusetts and is duly licensed as a full insurance broker by such state, which license is in full force and effect and in good standing as of the date hereof.

5.3 No Party is a party to any pending litigation nor is any litigation or claims threatened against any Party.

5.4 No Party is the subject of any pending investigation or hearing by any governmental agency.

5.5 Each Party is the owner, free and clear of all encumbrances, of all of its assets including, but not limited to, all of its Accounts, all of which Accounts are direct Accounts of the Party, none of which have been brokered into the Party by any other person or entity.

5.6 No Party is subject to or bound by any agreement providing for the acquisition or transfer by sale, gift or otherwise at any time of any of its assets including, but not limited to, its Accounts.

5.7 No corporate Party or any individual shareholder thereof is a party to or bound by any agreement providing for the sale, gift, conveyance or other transfer of the shares of stock (whether issued or unissued) of any corporate Party, nor are any shares of stock (whether issued or unissued) subject to any options, warrants, pledges or encumbrances of any name or nature whether absolute or contingent.

5.8 The individual shareholders of each corporate Party and the proportions of stock owned by them of each of the corporate Parties hereto are as set forth on EXHIBIT G annexed hereto.

5.9 Each of the corporate Parties hereto, and all of the shareholders thereof, are Parties to an agreement calling for the acquisition of all outstanding shares of stock of the corporate Parties from each and all of its shareholders at such time as a shareholder shall no longer be an active, full time employee of such corporate Party whether such acquisition be by way of a redemption of stock by the corporate Party or by purchase by other existing shareholders, but by no others.

5.10 No Party is subject to any binding agreement, restriction or impediment to entering into and carrying out the terms and conditions hereof without penalty.

5.11 Each corporate Party hereof has taken all necessary corporate action including, but not limited to, binding resolutions of all of its shareholders and directors to enter into this Agreement and to carry out the terms and conditions hereof.

5.12 Each Party has in effect a policy of errors and omissions insurance with limits of liability of not less than $1 million aggregate per occurrence underwritten by an insurance company licensed to write such business in the Commonwealth of Massachusetts.

5.13 No Party is in default under any contract, lease or agreement, whether written or oral to which it is a Party or is bound.

6.1 Each Party shall maintain in full force and effect a full resident insurance broker's license in the Commonwealth of Massachusetts.

6.2 Each Party shall notify CIS of any and all litigation to which such Party may become a Party, whether as plaintiff or defendant.

6.3 Each Party shall notify CIS of any investigations of such Party by any governmental agency and of any hearings which may be convened by any governmental agency of which the Party is the subject.

6.4 Each Party shall maintain in effect for a period of not less than five years from the date CIS shall become operational a policy of errors and omissions insurance with limits of liability of $1 million in the aggregate per occurrence which shall cover such Party for real or alleged acts or omissions committed prior to the date CIS shall become operational.

6.5 Each Party shall abide by and conform to the By-Laws of CIS and to the operating rules, regulations and procedures adopted by the Board of Directors of CIS from time to time and disseminated to the Parties.

7.1 CIS shall have the right to terminate any Party as a Party to this Agreement only upon good and sufficient cause which shall be defined as: