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No such thing as free leads, or at least free leads that will provide sales. As for businesses sueing you for replacing their business. I don't know but That don't sound right. I mean if you replace a policy following your states regulations what can they do? If you can save someone money and offer them the same or better service I say go for it!
There are contracts like that still around. When I was captive my contract said that if I replaced a policy they could require me to pay the company one year's premium.
I knew several agents who did and got caught, they sent threatening letters but never followed up on it. As far as I know they didn't attempt to take it out of their renewals either, as least none of said they did.
I guess the answer is don't get caught if your contract has that clause. It has never happened to me.