exv10w2






Exhibit 10.2




REGISTRATION RIGHTS AGREEMENT




Between




LIBERTY MUTUAL AGENCY CORPORATION




and




LIBERTY INSURANCE HOLDINGS, INC.




DATED AS OF      , 2010




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Section 1. Definitions
	 	 	1	 
	Section 2. Demand Registration
	 	 	4	 
	Section 3. Piggyback Registration
	 	 	6	 
	Section 4. Expenses
	 	 	7	 
	Section 5. Preparation and Filing
	 	 	8	 
	Section 6. Indemnification
	 	 	10	 
	Section 7. Underwriting Agreement
	 	 	13	 
	Section 8. Agreements of the Selling Holders
	 	 	13	 
	Section 9. Exchange Act Compliance
	 	 	14	 
	Section 10. No Conflicting Registration Rights
	 	 	14	 
	Section 11. Transfer of Registration Rights
	 	 	14	 
	Section 12. Enforcement
	 	 	14	 
	Section 13. Miscellaneous
	 	 	15	 
	 
	 	 	 	 
	 







 









 








          This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of      , 2010,
is entered into by and between Liberty Mutual Agency Corporation, a Delaware corporation (including
its successors, the “Company”), and Liberty Insurance Holdings, Inc., a Delaware
corporation (“LIHI”).




          WHEREAS, pursuant to the Company’s Amended and Restated By-laws the share capital of the
Company consists of Class A Common Shares, par value $0.01 per share (“Class A Common
Shares”) and Class B Common Shares, par value $.01 per share (“Class B Common Shares”
and, together with the Class A Common Shares, the “Common Shares”). Class B Common Shares
may only be owned by LIHI and its affiliates, and any purported sale, transfer or other disposition
of Class B Common Shares to any other Person will result in the automatic conversion of such
transferred shares into the Company’s Class A Common Shares;




          WHEREAS, the Company has filed a Registration Statement (File No. 333-[ ]) with the Securities
and Exchange Commission on Form S-1 (the “IPO Registration Statement”) in connection with
the initial public offering (the “IPO”) of its Class A Common Shares; and




          WHEREAS, the Company has agreed to provide LIHI with the registration rights specified in this
Agreement following the IPO with respect to any Common Shares held by LIHI or any other Holder, on
the terms and subject to the conditions set forth herein.




          NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:




     Section 1. Definitions.



     As used in this Agreement, the following terms shall have the following respective meanings:



     “Affiliate” means with respect to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by or is under common
control with, the Person specified. The term “control” (including the terms “controlling,”
“controlled by,” and “under common control with”) means possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract, or otherwise).



     “Agreement” shall have the meaning assigned to it in the introductory paragraph.



     “Business Day” or “business day” means any day other than (a) a Saturday or
Sunday or (b) a day on which banks are authorized or required to be closed in Boston or New York
City; provided, however, that any determination of a Business Day relating to a
securities exchange or



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other securities market means a Business Day on which such exchange or
market is open for trading.



     “Class A Common Shares” shall have the meaning assigned to it in the recitals.



     “Class B Common Shares” shall have the meaning assigned to it in the recitals.



     “Common Shares” shall have the meaning assigned to it in the recitals.



     “Company” shall have the meaning assigned to it in the introductory paragraph.



     “Demand Registration” shall have the meaning assigned to it in Section 2.1(a).



     “Demand Request” shall have the meaning assigned to it in Section 2.1(a).



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Holder” means (i) LIHI and (ii) any direct or indirect transferee of LIHI who shall
become a party to this Agreement in accordance with Section 11 and has agreed in writing to be
bound by the terms of this Agreement.



     “Information” shall have the meaning assigned to it in Section 5.9.



     “Inspectors” shall have the meaning assigned to it in Section 5.9.



     “IPO” shall have the meaning assigned to it in the recitals.



     “IPO Registration Statement” shall have the meaning assigned to it in the recitals.



     “IPO Underwriting Agreement” means the underwriting agreement dated      , 2010 among
[underwriter], the Company and LIHI.



     “LIHI” means Liberty Insurance Holdings, Inc., a Delaware corporation, all successors
to Liberty Insurance Holdings, Inc. by way of merger, consolidation, amalgamation or sale of all or
substantially all of its assets or any comparable transaction or series of related transactions
(including contractual arrangements) having the same effect, any individual, corporation,
partnership, joint venture, limited liability company, or other entity owning more than fifty
percent (50%) of the outstanding voting shares of such successor but, unless expressly stated
otherwise, shall not include the Company and all corporations, partnerships, joint ventures,
limited liability companies, trusts, associations and other entities in which the Company owns
(directly or indirectly) more than fifty percent (50%) of the outstanding voting stock or shares,
voting power, partnership interests or similar ownership interests.



     “LMHC” means Liberty Mutual Holding Company Inc., a Massachusetts mutual holding
company, all successors to Liberty Mutual Holding Company Inc. by way of merger, consolidation,
amalgamation or sale of all or substantially all of its assets or any comparable



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transaction or
series of related transactions (including contractual arrangements) having the same effect, any
individual, corporation, partnership, joint venture, limited liability company, or other
entity owning more than fifty percent (50%) of the outstanding voting shares of such successor
but, unless expressly stated otherwise, shall not include the Company and all corporations,
partnerships, joint ventures, limited liability companies, trusts, associations and other entities
in which the Company owns (directly or indirectly) more than fifty percent (50%) of the outstanding
voting stock or shares, voting power, partnership interests or similar ownership interests.




     “Other Shares” means at any time those Common Shares which do not constitute Primary
Shares or Registrable Shares.



     “Person” shall include all natural persons, corporations, business trusts,
associations, companies, partnerships, joint ventures and other entities and governments and
agencies and political subdivisions thereof.



     “Primary Shares” means at any time the authorized but unissued Common Shares and
treasury shares.



     “Records” shall have the meaning assigned to it in Section 5.9.



     “Registrable Shares” means at any time, with respect to any Holder, the Common Shares
beneficially owned by such Holder. As to any particular Registrable Shares, such Registrable
Shares shall cease to be Registrable Shares when (a) a registration statement with respect to the
sale by a Holder of such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration statement, (b) such
securities shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (c) such securities shall have been otherwise transferred, new
certificates for such securities not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent disposition of such securities shall not require
registration or qualification of such securities under the Securities Act or any state securities
or “blue sky” law then in force, (d) such securities shall have ceased to be outstanding or (e)
such securities are transferred to a Person who is not an Affiliate of LMHC at the time of such
transfer and are eligible to be distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act.



     “SEC” means the Securities and Exchange Commission.



     “Securities Act” or “Act” means the Securities Act of 1933.



     “Selling Holder” means any Holder that sells or proposes to sell Registrable Shares
pursuant to a registration statement hereunder.



     “Selling Holders’ Counsel” means counsel selected by the holders of a majority of the
Registrable Shares to be sold by Holders pursuant to a particular registration statement.



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     “Shelf Registration” shall have the meaning assigned to it in Section 2.1(a).



     “Takedown Offering” shall have the meaning assigned to it in Section 2.1(b).



     “Takedown Request” shall have the meaning assigned to it in Section 2.1(b).



     Section 2. Demand Registration.



     2.1. (a) Upon the written request of a Holder or Holders to effect a registration under the
Securities Act of Registrable Shares in accordance with this Section 2 (a “Demand
Request”), then, subject to Section 2.2, the Company shall promptly use its best efforts to
effect the registration on an appropriate form (which shall be Form S-3, if at such time the
Company is eligible to use such Form) under the Securities Act of the Registrable Shares which the
Company has been so requested to register (a “Demand Registration”). Such Demand Request
shall specify the approximate number of Registrable Shares requested to be registered and the
intended method of distribution. Promptly after receiving a Demand Request, the Company shall give
written notice of such proposed registration to each other Holder, if any, and shall offer to
include (subject to the terms of this Agreement) in the proposed registration any Registrable
Shares requested to be included in such proposed registration by such other Holders who respond in
writing to the Company’s notice within ten (10) days after delivery of such notice (which response
shall specify the number of Registrable Shares proposed to be included in such registration). With
respect to any Demand Registration, the requesting Holders may request the Company to effect a
registration of the Registrable Shares under a registration statement pursuant to Rule 415 under
the Securities Act (or any successor rule) (a “Shelf Registration”).



        (b) Upon the written request of a Holder or Holders to assist them in effecting an offering
pursuant to a shelf registration statement that has previously been filed and declared effective
pursuant to a Demand Registration (a “Takedown Request”), then, subject to Section 2.2, the
Company shall promptly use its best efforts to cooperate with the Holders and any managing
underwriter(s) to effect such an offering (a “Takedown Offering”). Such Takedown Request
shall specify the approximate number of Registrable Shares to be included in such Takedown Offering
and the intended method of distribution. Promptly after receiving a Takedown Request, the Company
shall promptly give written notice of the proposed Takedown Offering to each other Holder, if any,
that is eligible to sell Shares pursuant to such effective Shelf Registration and shall offer to
include, subject to the terms of this Agreement, any Registrable Shares of such other Holder that
are registered in such effective Shelf Registration to the extent so requested by such other Holder
in writing within three (3) Business Days after delivery of such notice (which request shall
specify the number of Registrable Shares proposed to be included by such Holders in such Takedown
Offering).



     2.2. (a) The Company shall not be obligated to file:




     (i) a Demand Registration (A) within 60 days after the effective date of a previous
Demand Registration, or (B) within 180 days (or, if determined to be necessary pursuant to
the IPO Underwriting Agreement within 214 days) after the effective date of the IPO
Registration Statement;



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     (ii) a Demand Registration unless the Demand Request is for (A) a number of
Registrable Shares equal to at least $50 million as of the date of such Demand Request or
(B) all of the remaining Registrable Shares held by the Holders; and




     (iii) more than two (2) Demand Registrations during any calendar year;



        (b) The Company shall not be obligated to file or cause to be declared effective any
registration statement, or assist the Holders in connection with any Takedown Offering pursuant to
a Shelf Registration that has been previously filed and declared effective pursuant to a Demand
Registration, during any period in which:



          (i) any other registration statement (other than on Form S-4 or Form S-8 promulgated under the
Securities Act or any successor forms thereto) (A) pursuant to which Primary Shares are to be sold
has been filed within the prior 90 days and not withdrawn or (B) has been declared effective and
pursuant to which Primary Shares were sold within the prior 90 days, or




          (ii) the Company has determined in good faith that the disclosure requirements of a
registration statement (including in connection with a proposed Takedown Offering) would require
the disclosure of material non-public information that the Company has a bona fide business purpose
for preserving as confidential, such filing to be delayed until the date that is 90 days after the
receipt of such Demand Request; provided, that the Company may only so delay the filing or
effectiveness of a registration statement, or the assistance with respect to a Takedown Offering,
pursuant to this Section 2.1(b)(ii) on one occasion during any twelve month period; and




        (c) With respect to a Demand Registration, the Company may include in such registration any
Primary Shares or Other Shares; provided, that the board of directors of the Company has
determined in writing that the Company needs to raise common equity capital for certain specific
purposes; and provided, however, that if a managing underwriter in respect of any
proposed underwritten offering to be made pursuant to such Demand Registration (including any
Takedown Offering) advises the Company in good faith in writing that in its opinion the inclusion
of all Registrable Shares, Primary Shares and Other Shares proposed to be included in such proposed
underwritten offering would adversely affect the successful marketing (including pricing) of all
such securities, then the number of Registrable Shares, Primary Shares and Other Shares proposed to
be included in such proposed underwritten offering shall be included in the following order:




     (i) First, the Registrable Shares held by all Selling Holders, pro rata based upon the
number of Registrable Shares owned by each such Selling Holder at the time of such
registration;




     (ii) Second, the Primary Shares; and




     (iii) Third, the Other Shares.



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     2.3. The Holder or Holders submitting a Demand Request or Takedown Request may specify in
such Demand Request or Takedown Request that the proposed registration (or that any Takedown
Offering) cover an underwritten offering. Upon such election, such Holder shall select one or more
nationally recognized investment banks to act as the managing underwriters and shall select any
additional investment banks to be used in connection with such offering, provided that such
selection shall be subject to the consent of the Company, which consent shall not be unreasonably
withheld or delayed. The Company shall, together with the Selling Holders, enter into a customary
underwriting agreement with such underwriters.



     2.4. A Demand Registration may be rescinded by written notice to the Company by the Selling
Holders holding a majority of the Registrable Shares to be included in such registration under the
following circumstances:




     (i) If such Demand Registration is rescinded prior to the date of the initial filing
of the related registration statement, such rescinded Demand Registration shall not count as
a Demand Registration initiated pursuant to this Section 2 for purposes of Section 2.2(a);
and




     (ii) If such Demand Registration is rescinded after the date of the initial filing of
the related registration statement but prior to its effective date, such rescinded Demand
Registration shall not count as a registration statement initiated pursuant to this Section
2 for purposes of Section 2.1(a) if the Selling Holders (x) have reimbursed the Company for
all out-of-pocket expenses incurred by the Company in connection with such rescinded Demand
Registration or (y) (1) reasonably believed that the registration statement contained an
untrue statement of material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein not misleading, (2) notified the
Company of such fact and requested that the Company correct such alleged misstatement or
omission and (3) the Company has refused to correct such alleged misstatement or omission.



     Section 3. Piggyback Registration. If at any time the Company proposes for any
reason to register Primary Shares or Other Shares under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor forms thereto and other than with
respect to the IPO Registration Statement), on any form that would also permit the registration of
Registrable Shares, the Company shall promptly give written notice to each Holder of its intention
to so register the Primary Shares or Other Shares and, upon the written request, given within 15
days after delivery of any such notice by the Company, of any Holder to include in such
registration Registrable Shares held by such Holder (which request shall specify the approximate
number of Registrable Shares proposed to be included in such registration), the Company shall use
its best efforts to cause all such Registrable Shares to be included in such registration on the
same terms and conditions as the securities otherwise being sold in such registration;
provided, however, that if at any time after giving written notice of its intention
to register any securities, and prior to the effective date of the registration statement filed in
connection with such registration, the Company shall determine for any reason not to proceed



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with
the proposed registration of the securities to be sold by it, the Company may, at its election,
give written notice of such determination to each Holder of Registrable Shares and, thereupon,
shall be relieved of its obligation to register any Registrable Shares in connection with such
registration; and, provided further, however, that if




          (a) the managing underwriter in connection with any proposed underwritten offering initially
proposed for the registration of Primary Shares advises the Company in good faith that in its
opinion the inclusion of all Registrable Shares or Other Shares proposed to be included in such
registration would interfere with the successful marketing (including pricing) of the Primary
Shares proposed to be registered by the Company, then the number of Primary Shares, Registrable
Shares and Other Shares proposed to be included in such registration shall be included in the
following order:




          (i) First, the Primary Shares;




          (ii) Second, the Registrable Shares held by all Selling Holders, pro rata based upon
the number of Registrable Shares owned by each such Selling Holder at the time of such
registration; and




          (iii) Third, the Other Shares;




          (b) the managing underwriter in connection with any proposed underwritten offering initially
proposed for the registration of Other Shares advises the Company in good faith that in its opinion
the inclusion of all Registrable Shares or Primary Shares proposed to be included in such
registration would interfere with the successful marketing (including pricing) of the Other Shares
proposed to be registered by the Company, then the number of Primary Shares, Registrable Shares and
Other Shares proposed to be included in such registration shall be included in the following order:





     (i) First, the Other Shares;




     (ii) Second, the Primary Shares; and




     (iii) Third, the Registrable Shares held by all Selling Holders, pro rata
based upon the number of Registrable Shares owned by each such Selling Holder at the time of
such registration.


In connection with any underwritten offering under this Section 3, the Company shall not be
required to include Registrable Shares in such underwritten offering unless the Holders of such
Registrable Shares accept the terms of the underwriting of such offering that have been agreed upon
between the Company and the underwriters selected by the Company, including without limitation, the
underwriting agreement and the fees and expenses in connection therewith.




     Section 4. Expenses. The Company shall bear the expense of any registrations
effected pursuant to Sections 2 and 3 of this Agreement including all registration and filing fees
(including all expenses incident to filing with the Financial Industry Regulatory Authority), fees



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and expenses of complying with securities and blue sky laws, printing expenses, and fees and
expenses of the Company’s counsel and accountants, and the reasonable and documented fees and
expenses of the Selling Holders’ Counsel, but excluding any underwriters’ or brokers’ discounts or
commissions, transfer taxes (to the extent that such taxes are required by law to be paid by the
Selling Holders) and the fees of any counsel to any Selling Holder, other than the Selling Holders’
Counsel (it being understood that the fees and expenses of any underwriter and such underwriter’s
counsel shall be the responsibility of such underwriter and the Selling Holders).




     Section 5. Preparation and Filing. If and whenever the Company is under an
obligation pursuant to the provisions of this Agreement to use its best efforts to effect the
registration of any Registrable Shares under the Securities Act or to assist in effecting a
Takedown Offering, the Company shall, as expeditiously as practicable and as applicable:



     5.1. with respect to a registration under Sections 2 and 3 of this Agreement, use its best
efforts to cause a registration statement that registers such Registrable Shares to become and
remain effective for a period of 180 days (or for three years, in the case of a Shelf Registration)
or until all of such Registrable Shares have been disposed of (if earlier), provided,
however, that the Company may discontinue any registration of its securities that is being
effected pursuant to Section 3 hereof at any time prior to the effective date of the registration
statement relating thereto;



     5.2. furnish, at least five business days (or one Business Day in connection with a Takedown
Offering) before filing a registration statement that registers such Registrable Shares, a
prospectus relating thereto or to a Takedown Offering or any amendments or supplements relating to
such a registration statement or prospectus, to each Holder of Registrable Shares, to any Selling
Holders and to the Selling Holders’ Counsel, copies of all such documents proposed to be filed with
the SEC (it being understood that such five-business-day period need not apply to successive drafts
of the same document proposed to be filed so long as such successive drafts are supplied to such
counsel in advance of the proposed filing by a period of time that is customary and reasonable
under the circumstances);



     5.3. prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for at least the periods set forth in this Agreement or until all
of such Registrable Shares have been disposed of (if earlier) and to comply with the provisions of
the Securities Act with respect to the registration of the sale or other disposition of such
Registrable Shares;



     5.4. notify in writing the Selling Holders promptly of the receipt by the Company of any
notification with respect to (i) any comments by the SEC with respect to such registration
statement or prospectus or any amendment or supplement thereto or any request by the SEC for the
amending or supplementing thereof or for additional information with respect thereto, (ii) the
issuance by the SEC of any stop order suspending the effectiveness of such registration statement
or prospectus or any amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose and (iii) the suspension of the qualification of such



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Registrable Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purposes;




     5.5. use its best efforts to register or qualify such Registrable Shares covered by such
registration statement under such other securities or blue sky laws of such jurisdictions as any
Selling Holder reasonably requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Selling Holder to consummate the disposition in such
jurisdictions of the Registrable Shares owned by such Selling Holder; provided,
however, that the Company will not be required to qualify generally to do business, subject
itself to general taxation or consent to general service of process in any jurisdiction where it
would not otherwise be required so to do but for this Section 5.5;



     5.6. furnish to each Selling Holder on a timely basis, such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such Selling Holder may reasonably
request in order to facilitate the public sale or other disposition of such Registrable Shares;



     5.7. use its best efforts to cause such Registrable Shares to be registered with or approved
by such other governmental agencies or authorities as may be necessary by virtue of the business
and operations of the Company to enable the seller or sellers thereof to consummate the disposition
of such Registrable Shares;



     5.8. during any period in which a prospectus relating to such Registrable Shares is required
to be delivered under the Securities Act, notify on a timely basis each Selling Holder within the
appropriate period mentioned in Section 5.1, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then existing and, at the
request of such Selling Holder, prepare and furnish to such Selling Holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the offerees of such shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then
existing;



     5.9. make available for inspection by any counsel to any Selling Holder and the Selling
Holders’ Counsel or any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such underwriter
(collectively, the “Inspectors”), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the “Records”), as shall
be reasonably necessary to enable them to conduct their due diligence investigation, and cause the
Company’s officers, directors and employees to supply all information (together with the Records,
the “Information”) reasonably requested by any such Inspector in connection with such
registration statement. Any of the Information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so notified, shall not be disclosed by



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the Inspectors unless (i) the disclosure of such Information is necessary to avoid or correct
a misstatement or omission of a material fact in the registration statement, (ii) the release of
such Information is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction or (iii) such Information has otherwise been made generally available to the public.
Each Selling Holder agrees that it will, upon learning that disclosure of such Information is
sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at
the Company’s expense, to undertake appropriate action to prevent disclosure of the Information
deemed confidential;




     5.10. use its best efforts to obtain from its independent certified public accountants
“comfort” letters in customary form and at customary times and covering matters of the type
customarily covered by comfort letters;



     5.11. use its best efforts to obtain from its counsel an opinion or opinions in customary
form;



     5.12. provide a transfer agent and registrar (which may be the same entity and which may not
be the Company) for such Registrable Shares;



     5.13. issue to any underwriter to which any Selling Holder may sell shares in such offering
certificates evidencing such Registrable Shares;



     5.14. list such Registrable Shares on any national securities exchange on which any shares of
the Common Shares are listed or if the Common Shares are not then listed on a national securities
exchange, use its best efforts to qualify such Registrable Shares for listing on such national
securities exchange as the holders of a majority of such Registrable Shares shall request;



     5.15. otherwise use its best efforts to comply with all applicable rules and regulations of
the SEC and, if required under such rules and regulations, make available


to its security holders, as soon as reasonably practicable, earnings statements (which need not be
audited) covering a period of 12 months beginning within three months after the effective date of
the registration statement, which earnings statements shall satisfy the provisions of Section 11(a)
of the Securities Act;




     5.16. use its best efforts to take all other steps necessary to effect the registration of
such Registrable Shares or the Takedown Offering contemplated hereby; and



     5.17. use its best efforts to make available its senior executive and financial officers to
participate at the reasonable request of any underwriter in marketing presentations to potential
investors.



     Section 6. Indemnification.



     6.1. In connection with any registration of any Registrable Shares under the Securities Act
or any Takedown Offering pursuant to this Agreement, the Company shall indemnify and



10









 




hold harmless each Selling Holder, its officers and directors, each underwriter, broker or any
other person acting on behalf of such seller and each other person, if any, who controls any of the
foregoing persons within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, (or actions in respect thereof) to which any of the foregoing
persons may become subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the registration statement
under which such Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein or otherwise filed with the SEC, any amendment or
supplement thereto or any document incident to registration or qualification of any Registrable
Shares, or arise out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse such seller, such officer or director, such underwriter, such
broker or such other person acting on behalf of such seller and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon (i) an untrue statement or alleged
untrue statement or omission or alleged omission made in said registration statement, preliminary
prospectus, final prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such seller or underwriter
specifically for use in the preparation thereof or (ii) offers or sales by such Selling Holder “by
means of” (as defined in Securities Act Rule 159A) a “free writing prospectus” (as defined in
Securities Act Rule 405) that was not authorized in writing by the Company.




     6.2. In connection with any registration of Registrable Shares under the Securities Act and
each Takedown Offering pursuant to this Agreement, each Selling Holder shall indemnify and hold
harmless (in the same manner and to the same extent as set forth in the preceding paragraph of this
Section) the Company, each director of the Company, each officer of the Company who shall sign such
registration statement, each underwriter, broker or other person acting on behalf of the Company or
such seller, each person who controls any of the foregoing persons within the meaning of the
Securities Act and each other Selling Holder under such registration statement (i) with respect to
any statement or omission from such registration statement, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the SEC, any amendment or supplement thereto
or any document incident to registration or qualification of any Registrable Shares, if such
statement or omission was made in reliance upon and in conformity with written information
furnished to the Company or such underwriter through an instrument duly executed by such seller
specifically for use in connection with the preparation of such registration statement, preliminary
prospectus, final prospectus, amendment, supplement or document and (ii) arises out of or is based
upon offers or sales by such Selling Holder “by means of” (as defined in Securities Act Rule 159A)
a “free writing prospectus” (as defined in Securities Act Rule 405) that was not authorized in
writing by the Company; provided, however, that the obligation to indemnify will be
several, not joint and several, among such Selling Holders, and the maximum amount of liability in
respect of such indemnification shall be in proportion to and limited to, in the case of each
Selling Holder, an amount equal to the net



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proceeds actually received by such seller from the sale of Registrable Shares effected
pursuant to such registration.




     6.3. The Indemnification required by this Section 6 will be made by periodic payments during
the course of the investigation or defense, as and when bills are received or expenses incurred,
subject to prompt refund in the event any such payments are determined not to have been due and
owing hereunder.



     6.4. Promptly after receipt by an indemnified party of notice of the commencement of any
action involving a claim referred to in the preceding paragraphs of this Section 6, such
indemnified party will, if a claim in respect thereof is made against an indemnifying party, give
written notice to the latter of the commencement of such action (it being understood that no delay
in delivering or failure to deliver such notice shall relieve the indemnifying persons from any
liability or obligation hereunder unless (and then solely to the extent that) the indemnifying
person is prejudiced by such delay and/or failure). In case any such action is brought against an
indemnified party, the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to the extent that it
may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be responsible for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof; provided, however, that if
any indemnified party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to or conflict with
those available to the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in this Section 6, the
indemnifying party shall not have the right to assume the defense of such action on behalf of such
indemnified party and such indemnifying party shall reimburse such indemnified party and any person
controlling such indemnified party for that portion of the fees and expenses of any counsel
retained by the indemnified party which is reasonably related to the matters covered by the
indemnity agreement provided in this Section 6.



     6.5. The indemnification provided for under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified party or any
officer, director or controlling person of such indemnified party and will survive the transfer of
securities.



     6.6. If the indemnification provided for in this Section 6 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage,
liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions which resulted in
such loss, claim, damage or liability as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material



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fact or the omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and each Selling Holder agrees that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation or by any other method of
allocation that did not take into account the equitable considerations referred to herein. The
amount paid or payable to an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to above shall be deemed to include, subject to the limitations
set forth in Sections 6.2 and 6.1, any legal or other expenses reasonably incurred in connection
with investigating or defending the same. Notwithstanding the foregoing, in no event shall the
amount contributed by a Selling Holder exceed the aggregate net offering proceeds received by such
seller from the sale of its Registrable Shares.




     Section 7. Underwriting Agreement. To the extent that the Company and any Selling
Holder shall enter into an underwriting or similar agreement, the Selling Holder or Holders party
thereto may, at their option, require that any or all of the representations and warranties by, and
the agreements on the part of, the Company to and for the benefit of such underwriters be made to
and for the benefit of such Selling Holders and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting or similar agreement shall also be
conditions precedent to the obligations of such Selling Holders. No underwriting or similar
agreement in connection with such offering shall require any such Selling Holder to make any
representations or warranties to or agreement with the Company or the underwriters other than
representations, warranties or agreements regarding such holder, such holder’s Registrable Shares
and such holder’s intended method of distribution or any other representations required by
applicable law and agreements regarding indemnification and contribution to the effect provided in
Section 6 hereof. Notwithstanding the provisions of Section 5 and 6, to the extent that the
Company and any Selling Holder or Holders shall enter into an underwriting or similar agreement,
which agreement contains provisions covering one or more issues addressed in such Sections 5 or 6,
the provisions contained in Sections 5 and 6 which address such issue or issues shall be superseded
with respect to such registration by such other underwriting or similar agreement;



     Section 8. Agreements of the Selling Holders. 



     8.1. Each Selling Holder shall furnish to the Company such written information regarding such
Selling Holder and the distribution proposed by such Selling Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.



     8.2. No Selling Holder shall, nor shall any Selling Holder permit any officer, director,
underwriter, broker or any other person acting on behalf of such Selling Holder to, use any free
writing prospectus (as defined in Rule 405 under the Securities Act) in connection with any
registration statement covering Registrable Shares, without the prior written consent of the
Company.



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     Section 9. Exchange Act Compliance. The Company shall comply with all of the
reporting requirements of the Exchange Act and with all other public information reporting
requirements of the SEC that are conditions to the availability of Rule 144 for the sale of the
Common Shares. The Company shall cooperate with each Holder supplying such information as may be
necessary for such Holder to complete and file any information reporting forms presently or
hereafter required by the SEC as a condition to the availability of Rule 144.



     Section 10. No Conflicting Registration Rights. The Company represents and warrants
to each Holder that the registration rights granted hereby do not conflict with any other
registration rights granted by the Company. The Company shall not, after the date hereof, grant
any registration rights that conflict with the registration rights granted hereby, or agree to any
registration rights that restrict the ability of each Holder to piggy-back on other registration
statements (except pursuant to standard cut-back provisions).



     Section 11. Transfer of Registration Rights. The rights of each Holder under this
agreement may be assigned to any direct or indirect transferee of a Holder who (a) agrees in
writing to be subject to and be bound by all terms and conditions of this Agreement and (b)
provides such contact information as is necessary in order to receive all notices, requests,
consents and other communications required or permitted hereunder.



     Section 12. Enforcement. 



     12.1. Remedies at Law or in Equity. Each Holder, on the one hand, or the Company on
the other hand, may proceed to protect and enforce its rights by suit in equity or action at law,
whether for the specific performance of any term contained in this Agreement or for an injunction
against the breach of any such term or in aid of the exercise of any term contained in this
Agreement, or to enforce any other legal or equitable right of such Holder, on the one hand, or the
Company on the other hand, or to take any one or more of such actions.



     In the event a Holder brings such an action against the Company or the Company brings an
action against a Holder arising under this Agreement, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including without limitation such
reasonable fees and expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.



     12.2. Cumulative Remedies. None of the rights, powers or remedies conferred upon a
Holder on the one hand, or the Company on the other hand, shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to every other right, power or
remedy, now or hereafter available at law, in equity, by statute or otherwise.



     12.3. No Implied Waiver. Except as expressly provided in this Agreement, no course
of dealing between the Company and a Holder and no delay in exercising any such right, power or
remedy conferred hereby now or hereafter existing at law in equity, by statute or otherwise, shall
operate as a waiver of, or otherwise prejudice, any such right, power or remedy.



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     Section 13. Miscellaneous. 



     13.1. Waivers and Amendments. Upon the approval of the Company and the written
consent of the holders of a majority of the Registrable Securities the obligations of the Company
and the rights of each Holder under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively and either for a specified period of
time or indefinitely).



     Upon the effectuation of each such waiver, the Company shall promptly give written notice
thereof to each Holder who has not previously consented thereto in writing.



     Neither this Agreement, nor any provision hereof, may be changed, waived, discharged or
terminated orally or by course of dealing, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is sought, except to the
extent provided in this Section 13.1.



     13.2. Notices. All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by
registered or certified mail,



          (a) If to LIHI:



c/o Liberty Mutual Insurance Company

175 Berkeley Street

Boston, Massachusetts 02117-0140

Attention: Chief Financial Officer



With a copy to:

Liberty Mutual Insurance Company

175 Berkeley Street

Boston, Massachusetts 02117-0140

Attention: General Counsel





or (b) If to a Holder other than LIHI, to such address as is provided by the Holder
to the Company,




or (c) If to the Company:


Liberty Mutual Agency Corporation

175 Berkeley Street

Boston, Massachusetts 02117-0140

Attention: Chief Financial Officer



With a copy to:




15









 







Liberty Mutual Agency Corporation

175 Berkeley Street

Boston, Massachusetts 02117-0140

Attention: General Counsel



or at such other address as the Company or a Holder each may specify by written notice to the
other, and each such notice, request, consent and other communication shall for all purposes of the
Agreement be treated as being effective or having been given (i) when delivered if delivered
personally, (ii) on the next business day after dispatch, if sent by a nationally recognized
overnight courier guaranteeing next business day delivery, or, (iii) if sent by mail, at the
earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid.




     13.3. Termination of Agreement. This Agreement shall remain in effect until the
later of (i) the date upon which no Registrable Shares shall remain outstanding and (ii) the date
upon which all Registrable Shares eligible to be sold pursuant to a registration statement shall
have been sold; provided, however, that Sections 4 and 6 shall survive the
termination of this Agreement.



     13.4. Severability. Should any one or more of the provisions of this Agreement or of
any agreement entered into pursuant to this Agreement be determined to be illegal or unenforceable,
all other provisions of this Agreement and of each other agreement entered into pursuant to this
Agreement shall be given effect separately from the provision or provisions determined to be
illegal or unenforceable and shall not be affected thereby.



     13.5. Parties in Interest. All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective parties hereto, the
successors and assigns of each Holder and the Company, whether so expressed or not. This Agreement
shall not run to the benefit of or be enforceable by any other Person.



     13.6. Headings. The headings of the Sections and paragraphs of this Agreement have
been inserted for convenience of reference only and do not constitute a part of this Agreement.



     13.7. Choice of Law. It is the intention of the parties that the internal laws, and
not the laws of conflicts, of New York should govern the enforceability and validity of this
Agreement, the construction of its terms and the interpretation of the rights and duties of the
parties.



     13.8. Counterparts. This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, with the same effect as if all parties had
signed the same document. All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument.



     13.9. Entire Agreement. This Agreement contains the entire agreement among the
parties hereto with respect to the subject matter hereof and such Agreement supersedes and replaces
all prior agreements, written or oral, among the parties hereto with respect to the subject matter
hereof.



*   *   *   *   *



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* * * * *






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          IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be
duly executed as of the day and year first above written.




	 	 	 	 	 	 	 

	 	 	LIBERTY MUTUAL AGENCY CORPORATION
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	LIBERTY INSURANCE HOLDINGS, INC.
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 	 	 	 	 	 	 






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