exv10w1






Exhibit 10.1




INTERCOMPANY AGREEMENT




by and between



LIBERTY MUTUAL AGENCY CORPORATION



and



LIBERTY MUTUAL GROUP INC.



Dated as of [•], 2010








 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	Page	 
	ARTICLE I

	 
	 	 	 	 
	DEFINITIONS

	 
	 	 	 	 
	Section 1.1 Certain Definitions

	 	 	1	 
	 
	 	 	 	 
	ARTICLE II

	 
	 	 	 	 
	COSTS AND EXPENSES

	 
	 	 	 	 
	Section 2.1 Allocation of Costs and Expenses

	 	 	14	 
	 
	 	 	 	 
	ARTICLE III

	 
	 	 	 	 
	INDEMNIFICATION

	 
	 	 	 	 
	Section 3.1 General Cross Indemnification

	 	 	14	 
	Section 3.2 Registration Statement Indemnification

	 	 	15	 
	Section 3.3 Indemnity for Former Subsidiaries of Agency Markets

	 	 	16	 
	Section 3.4 Indemnity for Former Affiliates of Liberty Mutual

	 	 	17	 
	Section 3.5 Contribution

	 	 	17	 
	Section 3.6 Procedure

	 	 	18	 
	Section 3.7 Other Indemnification Matters

	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	TRANSFER OF AGENCY MARKETS EMPLOYEES

	 
	 	 	 	 
	Section 4.1 Agency Markets Dedicated Employees

	 	 	19	 
	Section 4.2 Transfer of Employees

	 	 	20	 
	Section 4.3 Agency Markets Employee Liability

	 	 	20	 
	Section 4.4 Liberty Mutual Employee Liability

	 	 	20	 
	Section 4.5 Employee Books and Records

	 	 	21	 
	 
	 	 	 	 
	ARTICLE V

	 
	 	 	 	 
	EMPLOYEE BENEFITS MATTERS

	 
	 	 	 	 
	Section 5.1 Continued Participation in Liberty Mutual Plans

	 	 	21	 
	Section 5.2 Liberty Mutual Retirement Benefit Plans

	 	 	21	 
	Section 5.3 Transferred Employee Status under Liberty Mutual Plans

	 	 	22	 
	Section 5.4 Agency Market Plans

	 	 	22	 
	Section 5.5 Liberty Mutual Benefits Liability

	 	 	22	 






 









 






	 	 	 	 	 
	 	 	 	 	 
	Section 5.6 Agency Markets Benefits Liability

	 	 	23	 
	Section 5.7 Employee Tax Matters

	 	 	23	 
	Section 5.8 No Plan Amendment or Third Party Beneficiary Rights

	 	 	23	 
	 
	 	 	 	 
	ARTICLE VI

	 
	 	 	 	 
	FINANCIAL INFORMATION

	 
	 	 	 	 
	Section 6.1 Twenty Percent Threshold

	 	 	23	 
	Section 6.2 Fifty Percent Threshold

	 	 	29	 
	Section 6.3 Attorney Client Privilege

	 	 	30	 
	Section 6.4 Information Required For Regulatory Purposes

	 	 	30	 
	 
	 	 	 	 
	ARTICLE VII

	 
	 	 	 	 
	EQUITY RIGHTS

	 
	 	 	 	 
	Section 7.1 Equity Purchase Rights

	 	 	31	 
	Section 7.2 Equity Sale Right

	 	 	32	 
	 
	 	 	 	 
	ARTICLE VIII

	 
	 	 	 	 
	OTHER MATTERS

	 
	 	 	 	 
	Section 8.1 Pre-Existing Agreements

	 	 	34	 
	Section 8.2 Philanthropy; Charitable Contributions

	 	 	34	 
	Section 8.3 Consent of Holders of Class B Common Stock

	 	 	34	 
	Section 8.4 Agency Markets Charter Provisions

	 	 	36	 
	Section 8.5 Access to Shared Historical Records; Information Arising from Affiliate Relationship

	 	 	36	 
	Section 8.6 Promotional/ Marketing Agreements

	 	 	37	 
	Section 8.7 Litigation and Settlement Cooperation

	 	 	38	 
	Section 8.8 Compliance and Non-Disparagement

	 	 	39	 
	Section 8.9 Policies and Procedures

	 	 	39	 
	Section 8.10 Software

	 	 	40	 
	Section 8.11 Domain Names

	 	 	45	 
	Section 8.12 Guaranty Release and Payments

	 	 	46	 
	Section 8.13 Insurance Maintained by Liberty Mutual

	 	 	46	 
	Section 8.14 Regulatory Approvals

	 	 	47	 
	Section 8.15 Consent to Certain Agreements

	 	 	48	 
	Section 8.16 Volume Purchasing

	 	 	48	 
	Section 8.17 Right of First Offer

	 	 	48	 
	Section 8.18 Terrorism Risk Insurance Act

	 	 	49	 
	Section 8.19 Tax Matters

	 	 	49	 
	Section 8.20 Notification

	 	 	51	 
	Section 8.21 Change of Corporate Name

	 	 	52	 
	Section 8.22 Fronting Arrangements

	 	 	52	 






ii









 






	 	 	 	 	 
	 	 	 	 	 
	Section 8.23 Enterprise Risk

	 	 	52	 
	Section 8.24 Liberty Mutual Services

	 	 	53	 
	 
	 	 	 	 
	ARTICLE IX

	 
	 	 	 	 
	DISPUTE RESOLUTION

	 
	 	 	 	 
	Section 9.1 Dispute Resolution

	 	 	53	 
	 
	 	 	 	 
	ARTICLE X

	 
	 	 	 	 
	MISCELLANEOUS

	 
	 	 	 	 
	Section 10.1 Notices

	 	 	55	 
	Section 10.2 Binding Nature of Agreement

	 	 	56	 
	Section 10.3 Descriptive Headings

	 	 	56	 
	Section 10.4 Specific Performance and Other Remedies

	 	 	56	 
	Section 10.5 Governing Law

	 	 	57	 
	Section 10.6 Counterparts

	 	 	57	 
	Section 10.7 Severability

	 	 	57	 
	Section 10.8 Confidential Information

	 	 	57	 
	Section 10.9 Amendment and Modification

	 	 	58	 
	Section 10.10 Termination

	 	 	58	 
	Section 10.11 Entire Agreement

	 	 	58	 
	Section 10.12 No Assignment

	 	 	58	 
	Section 10.13 Recapitalization, Dilution Adjustments, etc.

	 	 	59	 
	Section 10.14 Further Actions

	 	 	59	 
	Section 10.15 Further Assurances

	 	 	59	 
	Section 10.16 No Third Party Beneficiaries

	 	 	59	 
	Section 10.17 Drafting of Language

	 	 	59	 
	Section 10.18 Interpretation

	 	 	60	 






iii









 






LIST OF SCHEDULES




	 	 	 

	Schedule 3.1(b)

	 	Guarantees
	Schedule 5.1

	 	Liberty Mutual Plans
	Schedule 5.4

	 	Agency Markets Plans
	Schedule 8.1

	 	Pre-Existing Agreements











iv









 








INTERCOMPANY AGREEMENT




     INTERCOMPANY AGREEMENT (this “Agreement”), dated as of [•], 2010 (the “Effective
Date”), by and between LIBERTY MUTUAL AGENCY CORPORATION, a Delaware corporation (“Agency
Markets”), and LIBERTY MUTUAL GROUP INC., a Massachusetts corporation (“Liberty
Mutual”).



     WHEREAS, Liberty Mutual is the indirect owner of all of the issued and outstanding Common
Stock (as defined below) of Agency Markets immediately prior to the Effective Date; and



     WHEREAS, in contemplation of Agency Markets ceasing to be so wholly owned by Liberty Mutual,
the parties hereto have determined that it is necessary and desirable to set forth certain
agreements that will govern certain matters between the parties hereto following the completion of
the Initial Public Offering (as defined below).



     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:



ARTICLE I




DEFINITIONS



     Section 1.1 Certain Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the
following meanings:



     “Act of Terrorism” shall have the meaning set forth in Section 102 of TRIA.



     “Actions” shall have the meaning set forth in Section 3.1(a).



     “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).



     “Agency Markets” shall have the meaning set forth in the preamble.



 









 





     “Agency Markets Auditors” means the independent certified public accountants of Agency
Markets.



     “Agency Markets Business” means the business of Agency Markets and its Subsidiaries,
including the operating segments known as “Commercial”, “Personal “ and “Surety”, the business
segment known as “Corporate and Other,” and the underwriting and administration of property and
casualty and surety business through independent insurance agencies and broker relationships, and
operations ancillary thereto as more fully described in the IPO S-1.



     “Agency Markets Business Records” shall have the meaning set forth in Section 8.19(h)
of this Agreement.



     “Agency Markets Charter” means the Amended and Restated Certificate of Incorporation
of Agency Markets filed with the Secretary of State of the State of Delaware on [•], 2010.



     “Agency Markets Consolidated Group” means the Consolidated Group of which Agency
Markets is the common parent corporation (or would be the common parent corporation if it were not
a member of the Liberty Mutual Consolidated Group) and including any corporation or other entity
which may become a member of such group from time to time.



     “Agency Markets Dedicated Employees” shall have the meaning set forth in Section 4.1.



     “Agency Markets Information” shall have the meaning set forth in Section 6.1(m).



     “Agency Markets Plan” means any plan, policy, program, on-going arrangement, contract,
trust, insurance policy or other agreement or funding vehicle, as amended from time to time, for
which the eligible classes of participants are limited to employees or former employees of Agency
Markets or any of its Subsidiaries.



     “Agency Markets Public Documents” shall have the meaning set forth in Section 6.1(j).



     “Agency Markets Software” means (i) all software owned by Agency Markets or its
Subsidiaries and used by a member of the Liberty Mutual Affiliated Group as of the Effective
Date and (ii) all software licensed to Agency Markets or its Subsidiaries by a third party and
used by a member of the Liberty Mutual Affiliated Group as of the Effective Date.



2









 





     “Agency Markets Strategic Business Unit” means the strategic business unit of Liberty
Mutual conducting the Agency Markets Business prior to the Effective Date.



     “Agency Markets Transferred Business” shall have the meaning set forth in Section
3.3(a).



     “Agency Markets TRIA Parties” shall have the meaning set forth in Section 8.18(a).



     “Aggregate Stop-Loss Reinsurance Agreement” means the Aggregate Stop-Loss Reinsurance
Agreement,” between Liberty Mutual Insurance Company (reinsurer) and Peerless Insurance Company
(cedant) dated as of June 30, 2010.



     “Agreement” shall have the meaning set forth in the introductory paragraph.



     “Annual Financial Statements” shall have the meaning set forth in Section 6.1(g).



     “Applicable Law” means any statute, rule, regulation, ordinance, order, decree,
directive or other legal restriction of any federal, state, local or foreign governmental,
administrative or regulatory authority, agency or instrumentality.



     “Average Market Price” of any security on any date means the average of the daily
closing prices for the ten (10) most recent consecutive trading days before the day in question.
The closing price for each day shall be the last reported sales price regular way or, in case no
such reported sale takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the principal national securities exchange on which such
security is listed or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices in the over-the-counter market
as furnished by a member firm on the principal national securities exchange on which such security
is listed or admitted to trading selected from time to time by Agency Markets for that purpose.
For the purpose of this definition, the term “trading day” shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day on which securities are not traded on such
exchange or in such market.



     “Average Purchase Price” shall have the meaning set forth in Section 7.2(b).



     “Beneficially Own,” “Beneficially Owned” and “Beneficially Owning”
shall mean beneficial ownership within the meaning of Rule 16a-1(a)(2) promulgated by the SEC under
the Exchange Act.



3









 





     “Business Day” or “business day” means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in Boston or New York City are
authorized or obligated by Applicable Law to close.



     “Change of Control” means the consummation of any transaction or series of
transactions which result in any Person other than a member of the Liberty Mutual Affiliated Group
Beneficially Owning, directly or indirectly, more than ten percent (10)% of the total voting power
of Agency Markets.



     “Class A Common Stock” means the Class A Common Stock, par value $0.01 per share, of
Agency Markets.



     “Class B Common Stock” means the Class B Common Stock, par value $0.01 per share, of
Agency Markets.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Combined Return” means any Tax Return, other than with respect to United States
federal income Taxes, filed on a consolidated, combined (including nexus combination, worldwide
combination, domestic combination, line of business combination or any other form of combination)
or unitary basis wherein Agency Markets or one or more of its Subsidiaries joins in the filing of
such Tax Return (for any taxable period or portion thereof) with Liberty Mutual or one or more
members of the Liberty Mutual Affiliated Group.



     “Common Stock” means, collectively, the Class A Common Stock and Class B Common Stock
of Agency Markets and any other class or series of common stock of Agency Markets hereafter
created.



     “Concurrent Transactions” means the transactions described in the IPO S-1 to be
completed immediately prior to and/or contemporaneously with the Initial Public Offering.



     “Consolidated Group” means an affiliated group of corporations within the meaning of
Section 1504(a) of the Code.



     “Consolidated Return” means any Tax Return with respect to United States federal
income Taxes filed on a consolidated basis wherein Agency Markets or one or more of its
Subsidiaries join in the filing of such Tax Return (for any taxable period or portion thereof) with
Liberty Mutual or one or more members of the Liberty Mutual Affiliated Group.



4









 





     “Control Event” means (i) the acquisition by a competitor of any member of the Liberty
Mutual Affiliated Group of fifty percent (50%) or more of the equity interests in Agency Markets or
any of its Subsidiaries or (ii) the acquisition by Agency Markets or any of its Subsidiaries of
fifty percent (50%) or more of the equity interests in a competitor of any member of the Liberty
Mutual Affiliated Group or (iii) the possession by a competitor of any member of the Liberty Mutual
Affiliated Group, directly or indirectly, of the power to independently direct or cause the
direction of the management and policies of Agency Markets or any of its Subsidiaries, whether
through the ownership of a voting equity interest, by contract or otherwise.



     “Deconsolidation Event” means, with respect to Agency Markets and each of its
Subsidiaries, any event or transaction that causes Agency Markets and/or one or more of its
Subsidiaries to no longer be eligible to join with Liberty Mutual or one or more members of the
Liberty Mutual Affiliated Group in the filing of a Consolidated Return or a Combined Return.



     “Direct Earned Premium” shall have the meaning set forth in Section 102 of TRIA.



     “Dispute” shall have the meaning set forth in Section 9.1(a).



     “Dispute Notice” shall have the meaning set forth in Section 9.1(b).



     “Effective Date” shall have the meaning set forth in the preamble.



     “Equity Issuance Notice” shall have the meaning set forth in Section 7.1(b).



     “Equity Purchase Rights” shall have the meaning set forth in Section 7.1(a).



     “Equity Purchase Share Amount” shall have the meaning set forth in Section 7.1(b).



     “Equity Purchase Shares” means shares of Voting Stock or any securities convertible
into or exchangeable for shares of Voting Stock or any options, warrants or rights to acquire
shares of Voting Stock.



     “Equity Sale Rights” shall have the meaning set forth in Section 7.2(a).



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



5









 





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



     “Exercise Notice” shall have the meaning set forth in Section 7.2(b).



     “Exercise Percentage” shall mean, with respect to any Repurchase Period, the aggregate
portion of the Ownership Ratio, expressed as a percentage, for which the members of the Liberty
Mutual Affiliated Group wish to exercise the Equity Sale Rights during such Repurchase Period.



     “Fair Market Value” means, with respect to shares of Voting Stock, the fair market
value thereof as jointly determined by Agency Markets and Liberty Mutual or, in the event Agency
Markets and Liberty Mutual are unable to agree, as determined by a mutually acceptable nationally
recognized investment banking or other financial advisory firm.



     “Federal Share of Compensation” shall have the meaning provided for in Section 103(e)
of TRIA.



     “FINRA” means the Financial Industry Regulatory Authority.



     “First Trigger Date” means the first date on which the members of the Liberty Mutual
Affiliated Group cease to Beneficially Own, in the aggregate, shares entitled to more than fifty
percent (50%) of the votes entitled to be cast by the holders of then outstanding Common Stock.



     “GAAP” means United States generally accepted accounting principles.



     “Guaranty” means any guaranty, keepwell, net worth or financial condition maintenance
agreement of or by any member of the Liberty Mutual Affiliated Group provided to any Person
(including any insurance regulatory authority) with respect to any actual or contingent obligation
of Agency Markets or any Subsidiary of Agency Markets.



     “Indebtedness” means, with respect to any Person, all indebtedness, obligations and
liabilities of such Person, whether direct or indirect, joint or several, matured or unmatured,
liquidated or unliquidated, secured or unsecured, (a) in respect of any money borrowed by such
Person, or (b) created or evidenced by any loan or credit agreement, promissory note, repurchase
agreement, debenture, bond or other similar written obligation to pay money.



     “Indemnifying Party” shall have the meaning set forth in Section 3.6.



6









 





     “Indemnitees” shall have the meaning set forth in Section 3.6.



     “Initial Public Offering” means the proposed initial public offering of Class A Common
Stock as contemplated by the IPO S-1.



     “Insured Losses” shall have the meaning set forth in Section 102 of TRIA.



     “Insurer Deductible” shall have the meaning set forth in Section 102 of TRIA.



     “IPO S-1” means Agency Markets’ registration statement on Form S-1 (No. [•]) filed
with the SEC under the Securities Act and relating to the Initial Public Offering, as the same may
be amended or supplemented from time to time.



     “Liberty Mutual” shall have the meaning set forth in the preamble.



     “Liberty Mutual Affiliated Group” means collectively, Liberty Mutual and all of its
Affiliates now or hereafter existing, other than Agency Markets and its Subsidiaries (now or
hereafter existing). For the avoidance of doubt, references in this Agreement to “members” or
“member” of the Liberty Mutual Affiliated Group refer collectively to legal entities or
individually to any legal entity that is included within the Liberty Mutual Affiliated Group, and
do not refer to policyholders or members of any such legal entity.



     “Liberty Mutual Annual Statements” means, collectively, the audited financial
statements and annual reports of any member of the Liberty Mutual Affiliated Group.



     “Liberty Mutual Auditors” means the independent certified public accountants of any
member of the Liberty Mutual Affiliated Group.



     “Liberty Mutual Compliance Policies” means compliance policies and procedures
identified from time to time by Liberty Mutual as generally applicable to Liberty Strategic
Business Units.



     “Liberty Mutual Consolidated Group” means the Consolidated Group of which Liberty
Mutual is the common parent corporation, and any corporation or other entity which may be, may have
been or may become a member of such group from time to time, but excluding any member of the Agency
Markets Consolidated Group.



7









 





     “Liberty Mutual Plan” means any plan, policy, program, on-going arrangement, contract,
trust, insurance policy or other agreement or funding vehicle, as amended from time to time, for
which the eligible classes of participants are limited to employees or former employees of members
of the Liberty Mutual Affiliated Group.



     “Liberty Mutual Software” means (i) all software owned by a member of the Liberty
Mutual Affiliated Group and used by Agency Markets or its Subsidiaries as of the Effective Date and
(ii) all software licensed to a member of the Liberty Mutual Affiliated Group by a third party and
used by Agency Markets or its Subsidiaries as of the Effective Date in the ordinary course of the
Agency Markets Business.



     “Liberty Mutual TRIA Parties” shall have the meaning set forth in Section 8.18(a).



     “Liberty Source Code” shall have the meaning set forth in Section 8.10(c)(v).



     “Liberty Strategic Business Unit” means any of the strategic business units of the
members of the Liberty Mutual Affiliated Group currently organized as “Personal Markets”,
“Commercial Markets” and “International,” excluding, for the avoidance of doubt, the Agency Markets
Strategic Business Unit.



     “Liberty Transferred Business” shall have the meaning set forth in Section 3.4(a).



     “Losses” shall have the meaning set forth in Section 3.1(a).



     “Measurement Point” with respect to any Repurchase Period means as of 11:59 p.m. on
the last day of the fiscal quarter prior to such Repurchase Period; provided, however, that with
respect to the first Repurchase Period for any Repurchase Plan, the Measurement Point shall be as
of 11:59 p.m. on the day prior to such Repurchase Period.



     “Model Audit Rule” means Annual Financial Reporting Model Regulation (otherwise known
as the Model Audit Rule or MAR) as adopted by the applicable insurance regulatory authority or
state.



     “Non-Liberty Repurchase Number” means the aggregate number of shares of Voting Stock
repurchased by Agency Markets from Persons other than members of the Liberty Mutual Affiliated
Group during the corresponding Repurchase Period.



     “Outstanding Stock” means the shares of Stock of Agency Markets issued and
outstanding, and shall not include shares of Stock held by Agency Markets as treasury stock or



8









 







by any Subsidiary of Agency Markets that is disregarded as an entity separate from Agency Markets for
United States federal income tax purposes.



     “Ownership Ratio” means, with respect to any Repurchase Period, the quotient of (x)
the number of shares of Voting Stock owned by the members of the Liberty Mutual Affiliated Group,
in the aggregate, as of the Measurement Point for such Repurchase Period less any Pending
Repurchase Shares divided by (y) the aggregate number of shares of Voting Stock owned by Persons
other than members of the Liberty Mutual Affiliated Group as of such Measurement Point.



     “Pending Repurchase Shares” means, with respect to any Repurchase Period, any shares
of Voting Stock which members of the Liberty Mutual Affiliated Group have previously agreed to sell
to and are required to be purchased by Agency Markets pursuant to the Equity Sale Rights exercised
for any prior Repurchase Period but have not been sold as of the Measurement Point for the current
Repurchase Period.



     “Permitted Acquisition” means any acquisition by Agency Markets or its Subsidiaries of
Stock, Stock Equivalents or assets (including any business or operating unit) of any Person not
requiring the prior affirmative vote of the holders of the Class B Common Stock pursuant to Section
8.3(a)(iii).



     “Person” means any individual, corporation, partnership, joint venture, limited
liability company, association or other business entity and any trust, unincorporated organization
or government or any agency or political subdivision thereof.



     “Pre-Deconsolidation Period” means any taxable period beginning on or before the date
of a Deconsolidation Event.



     “Pre-Existing Agreement” shall have the meaning set forth in Section 8.1.



     “Primary Litigant” shall have the meaning set forth in Section 8.7(a).



     “Privilege” shall have the meaning set forth in Section 6.3.



     “Program Year” shall have the meaning set forth in Section 102 of TRIA.



     “Prospectus” means the prospectus or prospectuses included in the IPO S-1, as amended
or supplemented by any prospectus supplement and by all other amendments and supplements to such
prospectus, including any prospectus filed pursuant to Rule 424 of the



9









 







Securities Act and
post-effective amendments and all materials incorporated by reference in such prospectus or
prospectuses.



     “Public Filings” shall have the meaning set forth in Section 6.1(n).



     “Quarterly Financial Statements” shall have the meaning set forth in Section 6.1(e).



     “Records” shall have the meaning set forth in Section 8.5(a).



     “Registration Indemnitees” shall have the meaning set forth in Section 3.2(a).



     “Registration Rights Agreement” means the Registration Rights Agreement, dated as of
[•], 2010, by and between Agency Markets and Liberty Insurance Holdings, Inc.



     “Regulation S-K” means Regulation S-K of the General Rules and Regulations under the
Securities Act.



     “Regulation S-X” means Regulation S-X of the General Rules and Regulations under the
Securities Act.



     “Related Agreements” means the Registration Rights Agreement, the Tax Sharing
Agreement, the Aggregate Stop-Loss Reinsurance Agreement and the Services Agreement.



     “Repurchase Period” means the fiscal quarter in which a Share Repurchase occurs;
provided, however, that with respect to the fiscal quarter in which a Repurchase Plan is first
authorized, the first Repurchase Period for such Repurchase Plan shall start on the first day
Agency Markets is permitted to repurchase shares under such Repurchase Plan pursuant to Section
7.2(b) of this Agreement.



     “Repurchase Plan” shall have the meaning set forth in Section 7.2(a).



     “Repurchase Plan Notice” shall have the meaning set forth in Section 7.2(b).



     “Repurchase Number” shall mean, with respect to any Repurchase Period, a number of
shares of Voting Stock equal to the product of (x) the Ownership Ratio, multiplied by (y) the
Exercise Percentage multiplied by (z) the Non-Liberty Repurchase Number, rounded down to the
nearest whole share of Voting Stock.



10









 





     “Rules”
shall have the meaning set forth in Section 9.1 Section 9.1(d)



     “SAP” means the statutory accounting principles prescribed or permitted by the
applicable insurance regulatory authority, including accounting and financial reporting
pronouncements by the National Association of Insurance Commissioners adopted by the applicable
insurance regulatory authority or state.



     “SEC” means the Securities and Exchange Commission.



     “Second Trigger Date” means the first date on which the members of the Liberty Mutual
Affiliated Group cease to Beneficially Own, in the aggregate, (20%) or more of the shares of then
outstanding Common Stock.



     “Secondary Litigant” shall have the meaning set forth in Section 8.7(a).



     “Securities Act” means the Securities Act of 1933, as amended.



     “Services Agreement” means the Services Agreement, dated as of [•], 2010, by and
between Liberty Mutual Insurance Company and Agency Markets.



     “Share Repurchase” shall have the meaning set forth in Section 7.2(a).



     “Stock” means shares of capital stock (whether denominated as common stock or
preferred stock), beneficial, partnership or membership interests, participations or other
equivalents (regardless of how designated) of or in a corporation, partnership, limited liability
company, business trust or other entity, whether voting or non-voting.



     “Stock Equivalents” means all securities convertible into or exchangeable for Stock
and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not
presently convertible, exchangeable or exercisable, and all voting debt.



     “Storage Facilities” shall have the meaning set forth in Section 8.5(a).



     “Subsidiary” of Agency Markets means all corporations, partnerships, joint ventures,
limited liability companies, associations and other entities (a) in which Agency Markets owns,
directly or indirectly, fifty percent (50%) or more of the outstanding voting stock, voting power,
partnership interests or similar ownership interests, (b) of which Agency Markets otherwise
directly or indirectly controls or directs the policies or operations or (c) which would



11









 







be considered subsidiaries of Agency Markets within the meaning of Regulation S-K or Regulation S-X.



     “Supplemental Tax Opinion” means [     ].



     “Tax Asset” means any Tax Item that has accrued for Tax purposes, but has not been
realized during the taxable period in which it has accrued, and that could reduce a Tax in another
taxable period, including a net operating loss, net capital loss, investment tax credit, foreign
tax credit, charitable deduction or credit related to alternative minimum tax or any other Tax
credit.



     “Tax Benefit” means a reduction in the Tax liability (or increase in refund or credit
or any item of deduction or expense) of a taxpayer for any taxable period. Except as otherwise
provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a
Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer for
such period, after taking into account the effect of the Tax Item on the Tax liability of such
taxpayer in the current period and all prior periods, is less than it would have been had such Tax
liability been determined without regard to such Tax Item.



     “Tax Detriment” means an increase in the Tax liability (or reduction in refund or
credit or any item of deduction or expense) of a Taxpayer for any taxable period. Except as
otherwise provided in this Agreement, a Tax Detriment shall be deemed to have been realized or
incurred from a Tax Item in a taxable period only if and to the extent that the Tax liability of
the Taxpayer for such period, after taking into account the effect of the Tax Item on the Tax
liability of such Taxpayer in the current period and all prior periods, is more than it would have
been had such Tax liability been determined without regard to such Tax Item.



     “Tax Item” means any item of income, gain, loss, deduction, expense or credit, or
other attribute that may have the effect of increasing or decreasing any Tax.



     “Tax Return” means any return, report, certificate, form or similar statement or
document (including any related or supporting information or schedule attached thereto and any
information return, amended tax return, claim for refund or declaration of estimated Tax) required
to be supplied to, or filed with, a Tax authority in connection with the determination, assessment
or collection of any Tax or the administration of any laws, regulations or administrative
requirements relating to any Tax.



     “Tax Sharing Agreement” means the Federal Tax Sharing Agreement, dated as of January
1, 2002, as amended, by and among Agency Markets and its Subsidiaries, Liberty Mutual Holding
Company Inc. and the other members of the Liberty Mutual Affiliated Group.




12











 





          “Taxes” means all federal, state, local or non-U.S. taxes, charges, fees, duties,
levies, imposts, rates or other assessments, including income, premium, gross receipts, net worth,
excise, personal property, sales, use, license, capital stock, transfer, franchise, value added or
other taxes, (including any interest, penalties or additions attributable thereto) and a “Tax”
shall mean any one of such Taxes. For the avoidance of doubt, “Taxes” does not include real
property, payroll, withholding, or social security taxes.



          “Third-Party Action” shall have the meaning set forth in Section 8.7(a).



          “Trademark License Agreement” means the Trademark License Agreement, dated as of [•],
2010, by and between Liberty Mutual Insurance Company and LMAC.



          “Transactions” means collectively, the Initial Public Offering and the Concurrent
Transactions.



          “Transfer Time” shall have the meaning set forth in Section 4.2.



          “Transferred Employee” shall have the meaning set forth in Section 4.2.



          “TRIA” means Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk
Insurance Extension Act of 2005 and the Terrorism Risk Insurance Program Reauthorization Act of
2007.



          “TRIA Parties” shall have the meaning set forth in Section 8.18(a).



          “TSA” shall have the meaning set forth in Section 8.10(c)(i).



          “Trigger Date” means the occurrence of either the First Trigger Date or Second Trigger
Date, as the case may be.



          “Value Ownership Percentage” means the aggregate value of shares of Stock of Agency
Markets (other than shares of Stock described in Section 1504(a)(4) of the Code) Beneficially Owned
by members of the Liberty Mutual Consolidated Group divided by the aggregate value of all shares of
Outstanding Stock (other than shares of Stock described in Section 1504(a)(4) of the Code).



13









 





          “Volume Purchasing Arrangements” shall have the meaning set forth in Section 8.16.



          “Voting Ownership Percentage” means the aggregate number of votes for directors of
Agency Markets held by members of the Liberty Mutual Consolidated Group divided by the aggregate
number of votes for directors of Agency Markets of all shares of Outstanding Stock.



          “Voting Stock” means all securities issued by Agency Markets having the ordinary power
to vote in the election of directors of Agency Markets, including Class A Common Stock and Class B
Common Stock issued or issuable under the Agency Markets Charter, other than securities having such
power only upon the occurrence of a default or any other extraordinary contingency.



ARTICLE II




COSTS AND EXPENSES



          Section 2.1 Allocation of Costs and Expenses. Agency Markets shall pay for all fees, costs and
expenses incurred by Agency Markets or any of its Subsidiaries in connection with the Transactions,
and Liberty Mutual shall pay for all fees, costs and expenses incurred by any member of the Liberty
Mutual Affiliated Group in connection with the Transactions. Notwithstanding the foregoing:
Agency Markets shall pay (or to the extent incurred and paid for by any member of the Liberty
Mutual Affiliated Group), will promptly reimburse the applicable members of the Liberty Mutual
Affiliated Group for any and all amounts so paid for all of the costs for services rendered in
connection with the Transactions by (a) Skadden, Arps Slate Meagher & Flom LLP, (b) Ernst & Young
LLP, (c) McDermott, Will and Emery LLP, (d) the fees payable to the SEC for the filing of the IPO
S-1 and any other registration statements relating to any of the Transactions, (e) fees, costs and
expenses associated with the “road-show” and other customary marketing activities in connection
with the Initial Public Offering, (f) fees, costs and expenses related to the listing of the Class
A Common Stock and any other securities of Agency Markets on any domestic or foreign securities
exchange, (g) any FINRA filing fees, (h) initial fees, costs and expenses of the transfer agent for
the Class A Common Stock and (i) the cost of any other service providers in connection with the
Transactions.




ARTICLE III




INDEMNIFICATION



          Section 3.1 General Cross Indemnification.




               (a) Subject to Section 9.1 hereof and the terms of the Related Agreements, Liberty Mutual
agrees to indemnify and hold harmless Agency Markets and its Subsidiaries and each of the officers,
directors, employees and agents of Agency Markets and its Subsidiaries against any and all costs
and expenses arising out of claims (including attorneys’ fees, interest, penalties and costs of
investigation or preparation for defense), judgments, fines,



14









 







losses, claims, damages, liabilities,
demands, assessments and amounts paid in settlement (collectively, “Losses”), in each case,
based on, arising out of, resulting from or in connection with any third party claim, action, cause
of action, suit, proceeding or investigation, whether civil, criminal, administrative,
investigative or other (collectively, “Actions”), based on, arising out of, pertaining to
or in connection with (i) any breach by Liberty Mutual of this Agreement, (ii) the ownership or the
operation of the assets or properties of (other than capital stock of Agency Markets and its
Subsidiaries), and the operation or conduct of the business of, the members of the Liberty Mutual
Affiliated Group, whether before, on or after the Effective Date, in each case excluding the Agency
Markets Business, or (iii) all of the liabilities to be borne by Liberty Mutual in accordance with
the provisions of Sections 4.4 and 5.5 of this Agreement.



               (b) Subject to Section 9.1 hereof and the terms of the Related Agreements, Agency Markets
agrees to indemnify and hold harmless each member of the Liberty Mutual Affiliated Group and each
of the officers, directors, employees and agents of each member of the Liberty Mutual Affiliated
Group against any and all Losses, in each case, based on, arising out of, resulting from or in
connection with any Actions, based on, arising out of, pertaining to or in connection with (i) any
breach by Agency Markets of this Agreement, (ii) the ownership or the operation of the assets or
properties of, and the operation or conduct of the business of, Agency Markets and its Subsidiaries
on or after the Effective Date, (iii) the ownership or the operation of the assets or properties
of, and the operation or conduct of the business of, Agency Markets and its Subsidiaries prior to
the Effective Date other than for any action or inaction taken at the sole direction and control of
Liberty Mutual (iv) any Guaranty set forth on Schedule 3.1(b) hereto or (v) all of the
liabilities to be borne by Agency Markets in accordance with the provisions of Sections 4.3 and 5.6
of this Agreement.



               (c) The indemnity agreements contained in Section 3.1(a) and (b) shall be applicable whether
or not any Action or the facts or transactions giving rise to such Action arose prior to, on or
subsequent to the Effective Date.



          Section 3.2 Registration Statement Indemnification.




               (a) Agency Markets agrees to indemnify and hold harmless each member of the Liberty Mutual
Affiliated Group and each person, who controls any of the foregoing within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Registration
Indemnitees”) from and against any and all Losses based on, arising out of, resulting from or
in connection with any Action based on, arising out of, pertaining to or in connection with any
untrue statement or alleged untrue statement of a material fact contained in the IPO S-1 and any
Prospectus, or based on, arising out of, pertaining to or in connection with any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such Losses are based on, arise out
of, pertain to or are in connection with any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in reliance upon and in
conformity with information relating to a Registration



15









 







Indemnitee furnished in writing to Agency
Markets by or on behalf of such Registration Indemnitee expressly for use in the IPO S-1 or
Prospectus.



               (b) Each Registration Indemnitee agrees, severally and not jointly, to indemnify and hold
harmless Agency Markets and its Subsidiaries and any of their respective directors or officers who
sign the IPO S-1, and any person who controls Agency Markets within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from Agency Markets to each Registration Indemnitee, but only with respect to information relating
to such Registration Indemnitee furnished in writing to Agency Markets by or on behalf of such
Registration Indemnitee expressly for use in the IPO S-1 or Prospectus. For purposes of this
Section 3.2(b), any information relating to any underwriter that is contained in the IPO S-1 or a
Prospectus shall not be deemed to be information relating to a Registration Indemnitee. If any
Action shall be brought against Agency Markets, any of its directors, any such officer or any such
controlling person based on the IPO S-1 or any Prospectus and in respect of which indemnity may be
sought against a Registration Indemnitee pursuant to this Section 3.2(b) such Registration
Indemnitee shall have the rights and duties given to Agency Markets by Section 3.6 hereof (except
that if Agency Markets shall have assumed the defense thereof such Registration Indemnitee shall
not be required to do so, but may employ separate counsel therefor and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such Registration Indemnitee’s
expense), and Agency Markets, its directors, any such officer and any such controlling person shall
have the rights and duties given to such Registration Indemnitee by Section 3.6 hereof.



          Section 3.3 Indemnity for Former Subsidiaries of Agency Markets.




               (a) To the extent not duplicative of, or in conflict with, the Aggregate Stop-Loss Reinsurance
Agreement or any reinsurance agreement between any Subsidiary of Agency Markets and any member of
the Liberty Mutual Affiliated Group, Liberty Mutual will indemnify Agency Markets and its
Subsidiaries for, and shall defend and hold them harmless against, any and all Losses and Actions
relating to or arising out of the business, operations or ownership of any subsidiary previously
owned by Agency Markets or its Subsidiaries which, subsequent to Agency Markets’ beneficial
ownership and as of the Effective Date, is a subsidiary
of a member of the Liberty Mutual Affiliated Group (but no longer a subsidiary of Agency
Markets) (each an “Agency Markets Transferred Business”) except for Losses or Actions
relating to the performance of Agency Markets or its Subsidiaries under contractual arrangements
between Agency Markets and its Subsidiaries, on the one hand, and the Agency Markets Transferred
Business, on the other hand.



               (b) To the extent not duplicative of, or in conflict with, the Aggregate Stop-Loss Reinsurance
Agreement or any reinsurance agreement between any Subsidiary of Agency Markets and any member of
the Liberty Mutual Affiliated Group, Liberty Mutual will indemnify the respective current and
former officers, directors and employees of Agency Markets and its Subsidiaries for, and shall
defend and hold them harmless against, any and all Losses and Actions relating to or arising out of
the Agency Markets Transferred Business except



16









 







for any actions of any such Persons for which
indemnification from Agency Markets or its Subsidiaries would not be available under Applicable
Law.



          Section 3.4 Indemnity for Former Affiliates of Liberty Mutual.




               (a) To the extent not duplicative of, or in conflict with, the Aggregate Stop-Loss Reinsurance
Agreement or any reinsurance agreement between any member of the Liberty Mutual Affiliated Group
and any Subsidiary of Agency Markets, Agency Markets will indemnify each member of the Liberty
Mutual Affiliated Group for, and shall defend and hold them harmless against, any and all Losses
and Actions relating to or arising out of the business, operations or ownership of any subsidiary
previously owned by any member of the Liberty Mutual Affiliated Group which, subsequent to Liberty
Mutual Affiliated Group member’s ownership and as of the Effective Date, is a Subsidiary of Agency
Markets (but is no longer a member of the Liberty Mutual Affiliated Group) (each a “Liberty
Transferred Business”) except for Losses or Actions relating to the performance of Agency
Markets or its Subsidiaries under contractual arrangements between Agency Markets and its
Subsidiaries, on the one hand, and the Agency Markets Transferred Business, on the other hand.



               (b) To the extent not duplicative of, or in conflict with, the Aggregate Stop-Loss Reinsurance
Agreement or any reinsurance agreement between any member of the Liberty Mutual Affiliated Group
and any Subsidiary of Agency Markets, Agency Markets will indemnify the respective current and
former officers, directors and employees of any member of the Liberty Mutual Affiliated Group for,
and shall defend and hold them harmless against, any and all Losses and Actions relating to or
arising out of the Liberty Transferred Business except for any actions of any such Persons for
which indemnification from a member of the Liberty Mutual Affiliated Group would not be available
under Applicable Law.



          Section 3.5 Contribution.




               (a) If the indemnification provided for in this ARTICLE III is unavailable to an indemnified
party under Section 3.2 hereof in respect of any Losses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result of such Losses (i)
in such proportion as is appropriate to reflect the relative benefits received by Agency Markets,
on the one hand, and the applicable Registration Indemnitee, on the other hand, from the offering
of the securities covered by such the IPO S-1 and Prospectus, or (ii) if the allocation provided by
clause (i) above is not permitted by Applicable Law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of Agency Markets, on the one hand, and the applicable Registration Indemnitee, on the other hand,
in connection with the statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault of Agency Markets, on the one hand, and the
applicable Registration Indemnitee, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied



17









 







by Agency Markets, on the
one hand, or by such Registration Indemnitee, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.



               (b) Agency Markets and each Registration Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 3.5 were determined by a pro
rata allocation or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 3.5(a). The amount paid or payable by an
indemnified party as a result of the Losses referred to in Section 3.5(a) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or defending any such
Action. Notwithstanding the provisions of this Section 3.5, a Registration Indemnitee shall not be
required to contribute any amount in excess of the amount by which the proceeds to such
Registration Indemnitee exceeds the amount of any damages which such Registration Indemnitee has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.



          Section 3.6 Procedure. If any Action shall be brought against any Person entitled to indemnification
pursuant to this ARTICLE III (each such Person, an “Indemnitee”) in respect of which
indemnity may be sought against Liberty Mutual or Agency Markets (in each case, an
“Indemnifying Party”), such Indemnitee shall promptly notify the Indemnifying Party, and
the Indemnifying Party shall assume the defense thereof, including the employment of counsel and
payment of all fees and expenses. Such Indemnitee shall have the right to employ separate counsel
in any such action, suit or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Person unless (a) the Indemnifying Party
agrees in writing to pay such fees and expenses, (b) the Indemnifying Party fails to assume the
defense and employ counsel, or (c) the named parties to an Action (including any impleaded parties)
include both the Indemnitee and the Indemnifying Party and such Indemnitee shall have been advised
by its counsel that representation of such Indemnitee and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed)
due to actual or potential differing interests between them (in which case the Indemnifying Party
shall not have the right to assume the defense of such Action on behalf of such Indemnitee). It is
understood, however, that the Indemnifying Party shall, in connection with any one such Action or
separate but substantially similar or related Actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable fees and expenses of only
one separate firm of attorneys (in addition to any local counsel) at any time for all such
indemnified persons not having actual or potential differing interests among themselves, and the
Indemnifying Party shall be responsible for the reasonably fees and expenses of separate legal
counsel for each Indemnitee having any actual or potential differing interest, and that all such
fees and expenses shall be reimbursed as they are incurred. The Indemnifying Party shall not be
liable for any settlement of any such Action effected without its prior written consent, but if
settled with such prior written consent, or if there be a final judgment for the plaintiff in any
such Action, the Indemnifying Party agrees to indemnify and hold harmless each Indemnitee, to the




18









 




extent provided in this ARTICLE III, from and against any Losses by reason of such settlement or
judgment.




          Section 3.7 Other Indemnification Matters.




               (a) No Indemnifying Party shall, without the prior written consent of the Indemnitee Party,
effect any settlement of any Action in respect of which indemnification has been sought hereunder
by such Indemnitee Party, unless such settlement includes an unconditional release of such
Indemnitee Party from all liability on claims that are the subject matter of such Action.



               (b) Any Losses for which an Indemnitee Party is entitled to indemnification or contribution
under this ARTICLE III shall be paid by the Indemnifying Party to the Indemnitee Party as such
Losses are incurred. The indemnity and contribution agreements contained in this ARTICLE III shall
remain operative and in full force and effect, regardless of any (i) investigation made by or on
behalf of any Indemnitee, Agency Markets, its directors or officers, or any person controlling
Agency Markets, and (ii) termination of this Agreement.



               (c) Liberty Mutual shall (and shall cause each other member of the Liberty Mutual Affiliated
Group to), on the one hand, and Agency Markets shall (and shall cause each of its Subsidiaries to),
on the other hand, cooperate with each other in a reasonable manner with respect to access to
unprivileged information and similar matters in connection with any Action. The provisions of this
ARTICLE III are for the benefit of, and are intended to create third party beneficiary rights in
favor of, each of the indemnified parties referred to herein. None of the rights and obligations
of the parties set forth in this ARTICLE III shall alter or mitigate any of the rights of any of
the directors or officers of Liberty Mutual or Agency Markets or any other indemnified person to
indemnification under Liberty Mutual’s or Agency Markets’ certificate of incorporation or bylaws or
under any agreement.



ARTICLE IV




TRANSFER OF AGENCY MARKETS EMPLOYEES



          Section 4.1 Agency Markets Dedicated Employees. Liberty Mutual and Agency Markets shall cooperate to
identify all employees of any member of the Liberty Mutual Affiliated Group whose sole or primary
responsibilities relate to Agency Markets Business and whose ultimate management reporting
responsibility prior to the Effective Date would have been to the chief executive officer of the
Agency Markets Strategic Business Unit (the “Agency Markets Dedicated Employees”), and
Liberty Mutual shall, consistent with its policies and procedures, including no effect on their
status as employees at will, use commercially reasonable efforts to cause the members of the
Liberty Mutual Affiliated Group that employ each such Agency Markets Dedicated Employee to continue
to employ such Agency Markets Dedicated Employee until the earlier of (a) each such Agency Markets
Dedicated Employee’s termination




19









 




of employment, as directed by Agency Markets and Liberty Mutual or
(b) the transfer of each such Agency Markets Dedicated Employee to the payroll of an Agency Markets
Subsidiary pursuant to Section 4.2. Until each Agency Markets Dedicated Employee is transferred
pursuant to Section 4.2 or the employment of any such employee is otherwise terminated pursuant to
this Section 4.1, such Agency Markets Dedicated Employee shall continue to be employed by, receive
compensation from and participate in the employee benefit plans of, his or her employer as of the
Effective Date, subject to compliance with Liberty Mutual’s Employee Handbook and as permitted by
the terms of the employee benefit plans. Notwithstanding anything to the contrary in this ARTICLE
IV, Liberty Mutual shall have no liability in the event that any one or more Agency Markets
Dedicated Employees does not become a Transferred Employee for any reason.




          Section 4.2 Transfer of Employees. Liberty Mutual shall use commercially reasonable efforts to, and
shall cause each other member of the Liberty Mutual Affiliated Group to use commercially reasonable
efforts to, transfer each Agency Markets Dedicated Employee employed by a member of the Liberty
Mutual Affiliated Group as of 12:00 midnight on December 31, 2010 and other mutually agreed
employees to a Subsidiary of Agency Markets effective as of 12:01 a.m. on January 1, 2011 (the
“Transfer Time”). Within a reasonable period of time prior to the Transfer Time, to assure
the orderly and efficient transfer of such employees, Agency Markets shall provide Liberty Mutual
with written notice identifying the applicable Subsidiary to which each Agency Markets Dedicated
Employee and other mutually agreed employees will be transferred as of the Transfer Time. Each
Agency Markets Dedicated Employee and other employee transferred pursuant to this Section 4.2 shall
be referred to as a “Transferred Employee.”




          Section 4.3 Agency Markets Employee Liability. Agency Markets retains and agrees to pay, perform,
fulfill and discharge, as the case may be, all employment or service-related liabilities, unless
otherwise reserved or accounted for by any member of the Liberty Mutual Affiliated Group, with
respect to (a) any employee, including any Transferred Employee (and their dependents and
beneficiaries) for all periods of employment with Agency Markets or its Subsidiaries, (b) any
Agency Markets Dedicated Employee (and their dependents and beneficiaries) for all periods of
employment with any member of the Liberty Mutual Affiliated Group as an Agency Markets Dedicated
Employee, (c) any former employee of Agency Markets
and its Subsidiaries (including but not limited to the Transferred Employees) for all periods of
employment with Agency Markets and its Subsidiaries, (d) any former Agency Markets Dedicated
Employee for all periods of employment with any member of the Liberty Mutual Affiliated Group as an
Agency Markets Dedicated Employee and (e) any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency employee, leased
employee, on-call worker, incidental worker or non-payroll worker in any other contractual
relationship with Agency Markets or its Subsidiaries or any member of the Liberty Mutual Affiliated
Group whose sole or primary responsibilities relate to Agency Markets Business.




          Section 4.4 Liberty Mutual Employee Liability. Liberty Mutual retains and agrees to pay, perform,
fulfill and discharge, as the case may be, all employment or service-related liabilities, unless
otherwise reserved or accounted for by Agency Markets or its Subsidiaries, with respect to (a) any
Agency Markets Dedicated Employee (and their dependents




20









 




and beneficiaries) or other employee of any
member of the Liberty Mutual Affiliated Group for all periods of employment with any member of the
Liberty Mutual Affiliated Group not as an Agency Markets Dedicated Employee, (b) any former Agency
Markets Dedicated Employee for all periods of employment with any member of the Liberty Mutual
Affiliated Group not as an Agency Markets Dedicated Employee and (c) any individual who is, or was,
an independent contractor, temporary employee, temporary service worker, consultant, freelancer,
agency employee, leased employee, on-call worker, incidental worker or non-payroll worker in any
other contractual relationship with Agency Markets and its Subsidiaries whose sole or primary
responsibilities relate to a Liberty Strategic Business Unit.




          Section 4.5 Employee Books and Records.




               (a) Agency Markets shall provide Liberty Mutual access to any benefits, compensation and
employee matters-related information as may be reasonably requested by Liberty Mutual to comply
with its obligations under ARTICLE IV or ARTICLE V of this Agreement.



               (b) Liberty Mutual shall provide Agency Markets access to any benefits, compensation and
employee matters-related information as may be reasonably requested by Agency Markets to comply
with its obligations under ARTICLE IV or ARTICLE V of this Agreement.



ARTICLE V




EMPLOYEE BENEFITS MATTERS



          Section 5.1 Continued Participation in Liberty Mutual Plans. As of January 1, 2011, Liberty Mutual
will allow Agency Markets or its Subsidiaries to participate as a participating employer in the
Liberty Mutual Plans set forth in Schedule 5.1 hereto. Participation by Agency Markets or
its Subsidiaries in the Liberty Mutual Plans identified in Schedule 5.1 hereto shall be
subject to the terms and conditions of the Liberty Mutual Plans in effect from
time to time. The continued participation of Agency Markets or its Subsidiaries in the Liberty
Mutual Plans after January 1, 2011 shall be subject to the sole discretion of Liberty Mutual.
Nothing in this Agreement shall be construed to limit the ability of Liberty Mutual in its sole
discretion to amend, modify or terminate at any time any Liberty Mutual Plan or any other employee
benefit or compensation plan or program sponsored by a member of the Liberty Mutual Affiliated
Group in any respect, consistent with the terms of such plan or program.




          Section 5.2 Liberty Mutual Retirement Benefit Plans. Neither Agency Markets nor its Subsidiaries shall
be a participating employer in the Liberty Mutual Retirement Benefit Plan on or after the date that
the Transferred Employees first become employed by Agency Markets or its Subsidiaries. No
Transferred Employee shall earn “Years of Credited Service” (as defined in the Liberty Mutual
Retirement Benefit Plan) for services rendered as an employee of Agency Markets or its
Subsidiaries. Liberty Mutual may, but is not required to, in its sole discretion, increase
benefits under the Liberty Mutual Retirement Benefit Plan that are




21









 




attributable to the Years of
Credited Service completed by Transferred Employees with Liberty Mutual prior to January 1, 2011.
On and after the Transfer Time, (i) an individual who transfers employment from Agency Markets or
its Subsidiaries to any member of the Liberty Mutual Affiliated Group will only have periods of
employment with a member of the Liberty Mutual Affiliated Group counted as credited service under
the Liberty Mutual Retirement Benefit Plan for purposes of calculating the amount of benefits under
the Liberty Mutual Retirement Benefit Plan and (ii) an individual who transfers employment from any
member of the Liberty Mutual Affiliated Group to Agency Markets or its Subsidiaries will only have
periods of employment with Agency Markets or its Subsidiaries counted as credited service under the
Agency Markets Retirement Benefit Plan for purposes of calculating the amount of benefits under the
Agency Markets Retirement Benefit Plan. In addition, an individual’s service with either a member
of the Liberty Mutual Affiliated Group, Agency Markets or a Subsidiary of Agency Markets shall be
counted as required under ERISA when determining an individual’s eligibility to participate and a
participant’s vested benefit under both the Liberty Mutual Retirement Benefit Plan and the Agency
Markets Retirement Benefit Plan so long as Agency Markets remains within a controlled group of
corporations with Liberty Mutual within the meaning of Section 414(b) of the Code. Notwithstanding
the foregoing, nothing in this Section 5.2 shall be construed to limit the ability of Liberty
Mutual in its sole discretion to amend, modify or terminate the Liberty Mutual Retirement Benefit
Plan in any manner after the Effective Date. Neither Agency Markets nor its Subsidiaries shall
have any responsibility to make any contributions to the Liberty Mutual Retirement Benefit Plan.
Neither Agency Markets nor its Subsidiaries shall have any liability for any underfunding in the
Liberty Mutual Retirement Benefit Plan at any time.




          Section 5.3 Transferred Employee Status under Liberty Mutual Plans. Agency Markets shall take all
commercially reasonable steps, including but not limited to taking actions reasonably requested by
Liberty Mutual, to prevent the Initial Public Offering or the transfer of employment from a member
of the Liberty Mutual Affiliated Group to Agency Markets or a Subsidiary of Agency Markets from
being deemed to be a termination of employment for purposes of any Liberty Mutual Plan or to be
otherwise an event that, by itself, triggers additional rights under any Liberty Mutual Plan.




          Section 5.4 Agency Market Plans. Until the First Trigger Date, unless otherwise agreed to in writing
from Liberty Mutual, Agency Markets agrees to establish and
maintain the Agency Markets Plans set forth in Schedule 5.4 hereto on terms and conditions
that are the same as the corresponding Liberty Mutual Plans as may be in effect from time to time.
Agency Markets acknowledges that it is deemed to be a single employer under Section 414(b), and a
single “service recipient” under Section 409A of the Code, with the members of the Liberty Mutual
Affiliated Group as of the Effective Date, and that violation of the covenant in this Section 5.4
might cause the Liberty Mutual Plans to no longer comply with requirements under Applicable Law.
Liberty Mutual shall not have any liability or responsibility whatsoever with respect to any Agency
Markets Plans. No member of the Liberty Mutual Affiliated Group shall have any responsibility to
make any contributions to the Agency Markets Retirement Benefit Plan. No member of the Liberty
Mutual Affiliated Group shall have any liability for any underfunding in the Agency Markets
Retirement Benefit Plan at any time.




          Section 5.5 Liberty Mutual Benefits Liability. With respect to any Transferred Employee, other than
any liabilities related to the participation of Agency Markets and its




22









 




Subsidiaries in the Liberty
Mutual Plans on and after January 1, 2011, Liberty Mutual retains and agrees to pay, perform,
fulfill and discharge, as the case may be, all liabilities under any Liberty Mutual Plan (including
any discretionary increase in benefits granted by Liberty Mutual under the Liberty Mutual
Retirement Benefit Plan after the Transfer Time with respect to Years of Credited Service prior to
January 1, 2011). Liberty Mutual shall be responsible for any liability of Agency Markets and its
Subsidiaries for underfunding in the Liberty Mutual Retirement Benefit Plan as mandated under ERISA
due to being a controlled group member with Liberty Mutual.




          Section 5.6 Agency Markets Benefits Liability. Agency Markets retains and agrees to pay, perform,
fulfill and discharge, as the case may be, all liabilities under any Agency Markets Plans and all
liabilities related to the participation of Agency Markets and its Subsidiaries in the Liberty
Mutual Plans on and after January 1, 2011. Agency markets shall be responsible for any liability
of any member of the Liberty Mutual Affiliated Group for underfunding in the Agency Markets
Retirement Benefit Plan as mandated under ERISA due to being a controlled group member with Agency
Markets.




          Section 5.7 Employee Tax Matters. Liberty Mutual and Agency Markets agree to file all Federal and
other income tax returns on the basis that Liberty Mutual, and not Agency Markets, shall be
entitled to claim tax deductions with respect to any contributions to the Liberty Mutual Retirement
Benefit Plan attributable to any discretionary increase in the value of the benefits of a
Transferred Employee under such plan after the transfer of employment to Agency Markets on January
1, 2011 as described in Section 5.2 above. In the event that there is ever a final determination
(by the Internal Revenue Service or any other taxing authority) that all or any part of such
contribution is deductible by Agency Markets, Agency Markets shall promptly pay the value of the
tax benefit to Liberty Mutual, as reasonably determined by Liberty Mutual.




          Section 5.8 No Plan Amendment or Third Party Beneficiary Rights. Nothing in this ARTICLE V shall be
deemed or otherwise considered to be an amendment to any Liberty Mutual Plan or otherwise provide
any Agency Markets Dedicated Employee or Transferred Employee (or any individual associated
therewith) with any rights as a third party beneficiary under this Agreement.




ARTICLE VI




FINANCIAL INFORMATION



          Section 6.1 Twenty Percent Threshold. Agency Markets agrees that, (i) during any period in which the
members of the Liberty Mutual Affiliated Group Beneficially Own, in the aggregate, shares entitled
to twenty percent (20%) or more of the votes entitled to be cast by the holders of the then
outstanding Common Stock or (ii) during any period in which any member of the Liberty Mutual
Affiliated Group is required to account for its investment in Agency Markets under the equity
method of accounting (determined in accordance with GAAP consistently applied after consultation
with the Liberty Mutual auditors):




23









 








               (a) Maintenance of Books and Records. Agency Markets shall, and shall cause each of
its consolidated Subsidiaries to, (i) make and keep books, records and accounts, in conformity with
GAAP and SAP, which, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of Agency Markets and such Subsidiaries and (ii) devise and maintain a
system of internal accounting controls sufficient to provide reasonable assurances that: (A)
transactions are executed in accordance with management’s general or specific authorization, (B)
transactions are recorded as necessary (1) to permit preparation of financial statements in
conformity with GAAP, SAP or any other criteria applicable to such statements and (2) to maintain
accountability for assets, (C) access to assets is permitted only in accordance with management’s
general or specific authorization and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. Agency Markets shall ensure that its and their internal controls over financial
reporting are effective and that there are no material weaknesses in its and their internal
controls over financial reporting. Agency Markets shall, and shall cause each of its consolidated
Subsidiaries to, establish and maintain “disclosure controls and procedures” (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act) (x) required in order for the chief executive officer
and chief financial officer of Agency Markets to engage in the review and evaluation process
mandated by Section 302 of the Sarbanes-Oxley Act of 2002, and (y) that are reasonably designed to
ensure that information required to be disclosed by Agency Markets in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and that all such information is accumulated
and communicated to Agency Markets’ management as appropriate to allow timely decisions regarding
required disclosure. Agency Markets shall, and shall cause each of its consolidated Subsidiaries
to, as applicable, comply with the Model Audit Rule. Agency Markets shall permit Liberty Mutual
(or any member of the Liberty Mutual Affiliated Group designated by Liberty Mutual) to visit and
inspect any of the properties, corporate books, and financial and other records of Agency Markets
and its Subsidiaries, and to discuss the affairs, finances and accounts of any such entities with
the appropriate personnel of such entities and the Agency Markets Auditors (as defined below), in
each case, at reasonable times and during normal business hours as often as Liberty Mutual may
reasonably request.



               (b) Fiscal Year. Agency Markets shall, and shall cause each of its consolidated
Subsidiaries to, maintain a fiscal year which commences on January 1 and ends on December 31 of
each calendar year.



               (c) Summary Monthly Financial Information. As soon as practicable, and within five
(5) Business Days after the end of each month in each fiscal year of Agency Markets, Agency Markets
shall deliver to Liberty Mutual a summary of consolidated net income (loss) and consolidated
pre-tax income (loss) for Agency Markets and its Subsidiaries for such month and the year-to-date
period.



               (d) Detailed Monthly Financial Information. As soon as practicable, and within five
(5) Business Days after the end of each month in each fiscal year of Agency



24









 







Markets, Agency Markets
shall deliver to Liberty Mutual information consistent with the monthly financial information (GAAP
operating highlights) prepared by Agency Markets and its Subsidiaries prior to the Effective Date.



               (e) Unaudited Quarterly Financial Statements. As soon as reasonably practicable,
Agency Markets shall deliver to Liberty Mutual drafts of (i) the consolidated financial statements
of Agency Markets and its Subsidiaries (and notes thereto) for such periods and for the period from
the beginning of the current fiscal year to the end of such quarter, setting forth in each case in
comparative form for each such fiscal quarter of Agency Markets the consolidated figures (and notes
thereto) for the corresponding quarter and periods of the previous fiscal year, all in reasonable
detail and prepared in accordance with Article 10 of Regulation S-X, and (ii) a discussion and
analysis by management of Agency Markets’ and its Subsidiaries’ financial condition and results of
operations for such fiscal period, including an explanation of any material adverse change, all in
reasonable detail and prepared in accordance with Item 303(b) of Regulation S-K. The information
set forth in clauses (i) and (ii) above is herein referred to as the “Quarterly Financial
Statements.” Agency Markets shall deliver to Liberty Mutual all significant revisions to such
drafts as soon as any such revisions are prepared or made. Agency Markets shall deliver to Liberty
Mutual, no later than two (2) Business Days prior to the date Agency Markets publicly files or is
required to file, whichever is earlier, the Quarterly Financial Statements with the SEC or
otherwise becomes publicly available, Agency Markets shall deliver to Liberty Mutual the final form
of the Quarterly Financial Statements certified by the chief financial officer of Agency Markets as
presenting fairly, in all material respects, the financial condition and results of operations of
Agency Markets and its consolidated Subsidiaries.



               (f) Quarterly and Annual Reports Furnished to State Insurance Regulatory Authorities.
Prior to the filing by Agency Markets or any of its Subsidiaries of quarterly or annual statements
with any and all state insurance regulatory authorities in each jurisdiction in which such
statements are required to be filed, Agency Markets shall deliver drafts of such reports to Liberty
Mutual.



               (g) Audited Annual Financial Information. As soon as is reasonably practicable,
Agency Markets shall deliver to Liberty Mutual (i) drafts of (x) the consolidated financial
statements of Agency Markets (and notes thereto) for such year, setting forth in each case in
comparative form the consolidated figures (and notes thereto) for the previous fiscal year, all in
reasonable detail and prepared in accordance with Regulation S-X, and (y) a discussion and analysis
by management of Agency Markets’ consolidated financial condition and results of operations for
such year, including an explanation of any material adverse change, all in reasonable detail and
prepared in accordance with Item 303(a) of Regulation S-K, and (ii) a draft of a discussion and
analysis of Agency Markets’ consolidated financial condition and results of operations for such
year, including an explanation of any material adverse change, all in reasonable detail and
prepared in accordance with Item 303(a) of Regulation S-K, for inclusion in the annual report to
policyholders of the Liberty Mutual Affiliated Group. The information set forth in (i) and (ii)
above is herein referred to as the “Annual Financial Statements.” Agency



25









 







Markets shall
deliver to Liberty Mutual all significant revisions to such drafts as soon as any such revisions
are prepared or made. No later than two (2) Business Days prior to the date Agency Markets
publicly files or is required to file, whichever is earlier, the Annual Financial Statements with
the SEC or otherwise becomes publicly available, Agency Markets shall deliver to Liberty Mutual the
final form of the Annual Financial Statements accompanied by an opinion thereon by the Agency
Markets Auditors.



               (h) Other Financial Information. Agency Markets shall provide to Liberty Mutual upon
Liberty request, such other information and analyses as Liberty Mutual may reasonably request on
behalf of any member of the Liberty Mutual Affiliated Group in order to analyze the financial
statements and condition of Agency Markets and its Subsidiaries and shall provide Liberty Mutual
and its accountants with an opportunity to meet with management of Agency Markets and its
accountants in connection therewith. Agency Markets shall deliver to Liberty Mutual all Quarterly
Financial Statements and Annual Financial Statements of each Subsidiary of Agency Markets which is
itself required to file financial statements with the SEC or otherwise make such financial
statements publicly available, with such financial statements to be provided in the same manner and
detail and on the same time schedule as those financial statements of Agency Markets required to be
delivered to Liberty Mutual pursuant to this Section 6.1.



               (i) General Financial Statement Requirements. All information provided by Agency
Markets or any of its Subsidiaries to Liberty Mutual or any member of the Liberty Mutual Affiliated
Group pursuant to Section 6.1(c) — (j) inclusive, shall be consistent in terms of format and detail
and otherwise with the procedures and practices in effect on the Effective Date with respect to the
provision of such financial and other information by Agency Markets and its Subsidiaries to Liberty
Mutual (and where appropriate, as presently presented in financial and other reports delivered to
the board of directors of Liberty Mutual Holding Company Inc.), with such changes therein as may be
reasonably requested by Liberty Mutual from time to time, unless changes in such format, detail,
procedures or practices are required in order to comply with the rules and regulations of the SEC,
as applicable.



               (j) Public Information and SEC Reports. Agency Markets and each of its Subsidiaries
which files information with the SEC shall deliver to Liberty Mutual (to the attention of its Chief
Financial Officer) as soon as the same are substantially final, drafts of all reports, notices and
proxy and information statements to be sent or made available by Agency Markets or any of its
Subsidiaries to their security holders and all regular, periodic and other reports filed under
Sections 13, 14 and 15 of the Exchange Act (including annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K and Annual Reports to Stockholders), and all
registration statements and prospectuses to be filed by Agency Markets or any of its Subsidiaries
with the SEC or any securities exchange pursuant to the listed company manual (or similar
requirements) of such exchange (collectively, “Agency Markets Public Documents”), but in no
event later than (i) one (1) Business Day in the case of any current report on Form 8-K that must
be filed within a period of not less than four (4) Business Days of the reportable event, (ii) two
(2) Business Days in the case of any annual report on Form 10-K or quarterly report on



26









 







Form 10-Q or
(iii) as soon as reasonably practicable or if available sooner five (5) Business Days in the case
of any other such filing, in each case, prior to the filing (or required date of filing, whichever
is earlier) thereof with the SEC, and, no later than the date the same are printed, filed or
publicly disseminated, whichever is earliest, final copies of all Agency Markets Public Documents.
Prior to issuance, Agency Markets shall deliver to Liberty Mutual copies of all press releases and
other statements to be made available by Agency Markets or any of its Subsidiaries to the public,
including information concerning material developments in the business, properties, results of
operations, financial condition or prospects of Agency Markets or any of its Subsidiaries. No
report, registration, information or proxy statement, prospectus or other document which refers or
contains information with respect, to any member of the Liberty Mutual Affiliated Group shall be
filed with the SEC or otherwise made public by Agency Markets or any of its Subsidiaries without
the prior written consent of Liberty Mutual with respect to those portions of such document which
contain information with respect to any member of the Liberty Mutual Affiliated Group, except as
may be required by Applicable Law (in such cases, Agency Markets shall use its best efforts to
notify the relevant member of the Liberty Mutual Affiliated Group and obtain such member’s prior
written consent before making such filing with the SEC or otherwise making any such information
public).



               (k) Budgets and Projections. Agency Markets shall, as promptly as practicable,
deliver to Liberty Mutual copies of annual and other budgets and financial projections (consistent
in terms of format and detail and otherwise with the procedures in effect on the Effective Date)
relating to Agency Markets or any of its Subsidiaries and shall provide Liberty Mutual an
opportunity to meet with management of Agency Markets to discuss such budgets and projections.



               (l) Other Information. With reasonable promptness, Agency Markets shall deliver to
Liberty Mutual such additional financial and other information and data with respect to Agency
Markets and its Subsidiaries and their business, properties, financial position, results of
operations and prospects as from time to time may be reasonably requested by Liberty Mutual.



               (m) Earnings Releases. Liberty Mutual agrees that, unless required by Applicable Law
or unless Agency Markets shall have consented in writing thereto, no member of the Liberty Mutual
Affiliated Group will publicly release any quarterly, annual or other financial information of
Agency Markets or any of its Subsidiaries (“Agency Markets Information”) delivered to
Liberty Mutual pursuant to this Section 6.1 prior to the time that Liberty Mutual publicly releases
financial information of Liberty Mutual for the relevant period. Agency Markets and Liberty Mutual
will consult on the timing of their annual and quarterly earnings releases and will give each other
a reasonable opportunity to review the information therein relating to Agency Markets and its
Subsidiaries and to comment thereon. In the event that any member of the Liberty Mutual Affiliated
Group is required by Applicable Law to publicly release such Agency Markets Information prior to
the public release of
Liberty Mutual’s financial information, Liberty Mutual will give Agency
Markets notice of such release of



27









 







Agency Markets Information as soon as practicable, but in any
event no later than two (2) days prior to such release of Agency Markets Information.



               (n) Liberty Mutual Affiliated Group Filings. This Section 6.1(n) shall only be
applicable in the event that any member of the Liberty Mutual Affiliated Group becomes required to
make periodic filings with the SEC. Each of Liberty Mutual and Agency Markets shall cooperate
fully with each other to the extent reasonably requested by the other in the preparation of any of
their respective public earnings releases, quarterly reports on Form 10-Q, Annual Reports to
Shareholders, Annual Reports on Form 10-K, any Current Reports on Form 8-K and any other proxy,
information and registration statements, reports, notices, prospectuses and any other filings made
by them or any of their respective Subsidiaries (or in the case of Liberty Mutual, any other member
of the Liberty Mutual Affiliated Group) with the SEC, any national securities exchange or otherwise
made publicly available (collectively, “Public Filings”). Each of Liberty Mutual and
Agency Markets agrees to provide to each other all information that the other reasonably requests
in connection with any such Public Filings or that, in the judgment of their respective chief
executive officer, chief financial officer or general counsel, is required to be disclosed therein
under any Applicable Law. Such information shall be provided by Liberty Mutual or Agency Markets,
as the case may be, in a timely manner to enable Agency Markets, Liberty Mutual, their Subsidiaries
(or in the case of Liberty Mutual, any other member of the Liberty Mutual Affiliate Group), as the
case may be, to print, file or publicly disseminate such Public Filings on such date as Liberty
Mutual or Agency Markets, as the case may be, shall determine. If and to the extent requested by
Liberty Mutual or Agency Markets, the other party shall diligently review all drafts of such Public
Filings and prepare in a diligent and timely fashion any required or appropriate portion of such
Public Filing pertaining to such other party or any of its Subsidiaries (or in the case of Liberty
Mutual, any other member of the Liberty Mutual Affiliated Group). Prior to any printing, filing or
public dissemination of any Public Filing, an appropriate executive officer of Liberty Mutual or
Agency Markets, as the case may be, shall, if requested by the other party, certify that the
information relating to Liberty Mutual or Agency Markets, as the case may be, in such Public Filing
is accurate, true and correct in all material respects. Unless required by Applicable Law, Liberty
Mutual or Agency Markets, as the case may be, shall not publicly release any financial or other
information which conflicts with the information with respect to the other party that is included
in any Public Filing without the prior written consent of Agency Markets or Liberty Mutual, as the
case may be.



               (o) Agency Markets Selection of Auditor. Subject to the requirements of all
Applicable Laws, (i) if Agency Markets is to submit to a vote of its stockholders the election,
approval or ratification of the selection of its firm of independent certified public accountants
pursuant to Schedule 14A under the Exchange Act, Agency Markets shall so submit to such a vote such
accounting firm as is designated by Liberty Mutual and (ii) if Agency Markets does not so submit a
firm of accountants to such a vote, Agency Markets shall cause its independent certified public
accountants to be such accounting firm as is designated, from time to time, by Liberty Mutual.



28









 





               (p) Cooperation. Each of Liberty Mutual and Agency Markets will provide to the other
party on a timely basis all information that such other party (including any member of the Liberty
Mutual Affiliated Group or any Subsidiary of Agency Markets) reasonably requires to meet its
schedule for the printing, filing and public dissemination of its Public Filings. In this respect,
Liberty Mutual or Agency Markets, as the case may be, will provide all required financial
information with respect to it and its consolidated subsidiaries to the other party’s auditors and
management in a sufficient and reasonable time and in sufficient detail to permit such auditors to
take all steps and perform all review necessary to provide sufficient assistance to such auditors
with respect to information to be included or contained in the Public Filings, such assistance to
such auditors to be in conformity with current and past practices.



               (q) Access to Personnel and Working Papers. Agency Markets will authorize the Agency
Markets Auditor to make available to the Liberty Mutual Auditors both the personnel who performed
or are performing the annual audit of Agency Markets and, consistent with customary professional
practice and courtesy of such auditors with respect to the furnishing of work papers, work papers
related to the annual audit of Agency Markets, in all cases within a reasonable time after the
Agency Markets Auditors’ opinion date, so that the Liberty Mutual Auditors are able to perform the
procedures they consider necessary or appropriate to take responsibility for the work of the Agency
Markets Auditors as it relates to the Liberty Mutual Auditor’s report on the Liberty Mutual Annual
Statements, all within sufficient time to enable Liberty Mutual to meet its timetable for the
printing, filing and public dissemination of the Liberty Mutual Annual Statements.



               (r) Management Certification. Agency Markets’ chief financial officer or chief
accounting officer shall submit a quarterly representation in the form prescribed by Liberty Mutual
attesting to the accuracy and completeness of the financial and accounting records referred to
therein in all material respects.



          Section 6.2 Fifty Percent Threshold. Agency Markets agrees that, (i) prior to the First Trigger Date
or (ii) during any period that any member of the Liberty Mutual Affiliated Group is required, in
accordance with GAAP, to consolidate Agency Markets’ financial statements with its financial
statements:




               (a) Internal Auditors. Agency Markets shall provide Liberty Mutual’s internal
auditors or other representatives of Liberty Mutual access to Agency Markets’ and its Subsidiaries’
books and records so that Liberty Mutual may conduct reasonable audits relating to the financial
statements provided by Agency Markets pursuant to Sections 6.2(c)-(h) hereof, inclusive, and
Section 6.1(j), hereof as well as to the internal accounting controls and operations of Agency
Markets and its Subsidiaries.



               (b) Accounting Estimates and Principles. Agency Markets will give Liberty Mutual
reasonable notice of any proposed significant change in accounting estimates or material changes in
accounting principles from those in effect on the Effective Date, excluding



29









 







changes that are
mandated or required by the SEC, or otherwise required by Applicable Law, the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants, that could affect both
Agency Markets and Liberty Mutual. In this connection, Agency Markets will consult with Liberty
Mutual and, if requested by Liberty Mutual, Agency Markets will consult with the Liberty Mutual
Auditors with respect thereto. As to material changes in accounting principles which could affect
Agency Markets or Liberty Mutual, Agency Markets will not make any such changes without Liberty
Mutual’s prior written consent, excluding changes that are mandated or required by the SEC, the
Financial Accounting Standards Board or the American Institute of Certified Public Accountants, or
otherwise required by Applicable Law, if such a change would be sufficiently material to be
required to be disclosed in Agency Markets’ financial statements as filed with the SEC or otherwise
publicly disclosed therein. If Liberty Mutual so requests, Agency Markets will be required to
obtain the concurrence of the Agency Markets Auditors as to such material change prior to its
implementation.



               (c) Accountants’ Reports and Letters. Promptly, but in no event later than five (5)
Business Days following receipt thereof, Agency Markets shall deliver to Liberty Mutual copies of
all reports and letters submitted to Agency Markets or any of its Subsidiaries by their independent
certified public accountants, including each report or letter submitted to Agency Markets or any of
its Subsidiaries concerning its accounting practices and systems or internal controls and any
comment letter submitted to management in connection with their annual audit and all responses by
management to such reports and letters.



          Section 6.3 Attorney Client Privilege. The provision of any information pursuant to this ARTICLE VI
shall not be deemed a waiver of any privilege, including privileges arising under or related to the
attorney client privilege (a “Privilege”).




          Section 6.4 Information Required For Regulatory Purposes. In addition to, and not in limitation of,
Section 6.1 through and including Section 6.2 hereof, Agency Markets hereby covenants that for so
long as Liberty Mutual is deemed to control Agency Markets for insurance regulatory purposes,
Agency Markets shall, or shall cause its Subsidiaries to, provide Liberty Mutual or any member of
the Liberty Mutual Affiliated Group designated by Liberty Mutual (and their respective authorized
representatives) access to any Agency Markets personnel, records, information or documents as
Liberty Mutual may deem necessary or advisable to monitor and ensure compliance with any type of
regulatory requirements. Upon reasonable notice, and at Liberty Mutual’s own expense, Liberty
Mutual or any of its applicable Affiliates
(and its authorized representatives) will be afforded access to such personnel, records,
information or documents at reasonable times and during normal business hours and Liberty Mutual or
its applicable Affiliate (and its authorized representatives) will be permitted, at its own
expense, to make abstracts from, or copies of, any such records, information or documents.





30











 





ARTICLE VII




EQUITY RIGHTS



          Section 7.1 Equity Purchase Rights.




               (a) Until the Second Trigger Date the members of the Liberty Mutual Affiliated Group shall
have the equity purchase rights set forth in this Section 7.1 (the “Equity Purchase
Rights”); provided that the members of the Liberty Mutual Affiliated Group shall not be
entitled to Equity Purchase Rights to the extent that the principal national securities exchange in
the United States on which the Common Stock is listed, if any, prohibits or limits the granting by
Agency Markets of such Equity Purchase Rights; provided, further, that if any such
prohibition or limitation exists, Agency Markets will use its best efforts (including by seeking to
obtain any required stockholder approval of any issuance of Common Stock pursuant to such Equity
Purchase rights) to render such prohibition or limitation inapplicable to the issuance of Common
Stock pursuant to such Equity Purchase Rights.



               (b) As soon as practicable after determining to issue Equity Purchase Shares, and in any event
if possible at least five (5) Business Days prior to the earlier of (x) the issuance of Equity
Purchase Shares to any Person, other than to a member of the Liberty Mutual Affiliated Group, and
(y) the public announcement of an issuance of Equity Purchase Shares to any Person, other than to a
member of the Liberty Mutual Affiliated Group, Agency Markets shall notify Liberty Mutual in
writing of such proposed sale (which notice shall specify, to the extent practicable, the purchase
price for, number, and terms and conditions of, such Equity Purchase Shares) and shall offer to
sell to Liberty Mutual (which offer may be assigned by Liberty Mutual to another member of the
Liberty Mutual Affiliated Group) at the purchase price (net of any underwriting discounts or
commissions), if any, to be paid by the transferee(s) of such Equity Purchase Shares an amount of
Equity Purchase Shares determined as provided below (a “Equity Issuance Notice”); provided,
however, that the foregoing obligation shall not apply to any Equity Purchase Shares issued
(i) under dividend reinvestment plans which offer Voting Stock to security holders at a discount
from Average Market Price (as defined below) no greater than is then customary for public
corporations, (ii) pursuant to the Transactions or (iii) under Agency Markets’ equity incentive
plans, except in each case when the issuance of such Equity Purchase Shares would (A) in the event
that the Voting Ownership Percentage or Value Ownership Percentage immediately prior to such
issuance is at or above eighty and one-tenth percent (80.1%), cause the Voting Ownership Percentage
or Value Ownership Percentage to fall below eighty and one-tenth percent (80.1%) or (B) in the
event that the Voting Ownership Percentage or Value Ownership Percentage is below eighty and
one-tenth percent (80.1%) prior to such issuance, cause any Trigger Date to occur. If such offer
is accepted in writing within five (5) Business Days after receipt of the applicable Equity
Issuance Notice, (or such longer period as is necessary for the members of the Liberty Mutual
Affiliated Group to obtain regulatory approvals), Agency Markets shall sell to such member of the
Liberty Mutual Affiliated Group an amount of Equity Purchase Shares (the “Equity Purchase Share
Amount”) equal to the product of (A) the quotient of (x) the number of shares of Voting Stock
owned by the members of the Liberty Mutual Affiliated Group, in the aggregate, immediately prior to
the



31









 







issuance of the Equity Purchase Shares by (y) the aggregate number of shares of Outstanding
Voting Stock owned by Persons other than by members of the Liberty Mutual Affiliated Group
immediately prior to the issuance of the Equity Purchase Shares, multiplied by (B) the aggregate
number of Equity Purchase Shares proposed to be issued by Agency Markets to Persons other than to
members of the Liberty Mutual Affiliated Group rounded up to the nearest whole Equity Purchase
Share. If, at the time of the determination of any Equity Purchase Share Amount, any other Person
has preemptive or other equity purchase rights similar to the Equity Purchase Rights, such Equity
Purchase Share Amount shall be recalculated to take into account the amount of Voting Stock to be
sold to such Persons, rounding up such Equity Purchase Share Amount to the nearest whole Equity
Purchase Share.



               (c) In the event that the Equity Purchase Shares issued to Persons other than members of the
Liberty Mutual Affiliated Group in the corresponding issuance are (i) shares of Common Stock, the
Equity Purchase Shares sold to members of the Liberty Mutual Affiliated Group pursuant to this
Section 7.1 shall be shares of Class B Common Stock; (ii) securities convertible into or
exchangeable for shares of Common Stock or any options, warrants or rights to acquire shares of
Common Stock, the Equity Purchase Shares sold to members of the Liberty Mutual Affiliated Group
pursuant to this Section 7.1 shall be securities convertible into or exchangeable for shares of
Class B Common Stock or options, warrants or rights to acquire shares of Class B Common Stock, as
applicable; and (iii) any form of security other than as described in the preceding clauses (i) and
(ii), the Equity Purchase Shares sold to member of the Liberty Mutual Affiliated Group pursuant to
this Section 7.1 shall be the form of securities issued to Persons other than members of the
Liberty Mutual Affiliated Group.



               (d) The purchase and sale of any Equity Purchase Shares pursuant to this Section 7.1 shall
take place at 9:00 a.m. on the latest of (i) the fifth (5th) Business Day following the acceptance
of such offer, (ii) the Business Day on which such Equity Purchase Shares are issued to Persons
other than the members of the Liberty Mutual Affiliated Group and (iii) the fifth (5th) Business
Day following the expiration of any required governmental or other regulatory waiting periods or
the obtaining of any required governmental or other regulatory consents or approvals, at the
offices of Liberty Mutual indicated in Section 10.1 hereof, or at such other time and place in
Boston, Massachusetts as Liberty Mutual and Agency Markets shall agree. At the time of purchase,
Agency Markets shall deliver to Liberty Mutual (or such assignee) certificates (or, in the event
that Agency Markets determines to issue securities in an uncertificated form, other evidence of
ownership) registered in the name of the appropriate members of the Liberty Mutual Affiliated Group
representing the shares purchased and the members of the Liberty Mutual Affiliated Group shall
transfer to Agency Markets the purchase price in United States dollars by bank check or wire
transfer of immediately available funds, as specified by Agency Markets, to an account designated
by Agency Markets not less than five (5) Business Days prior to the date of purchase. Agency
Markets and the members of the Liberty Mutual Affiliated Group will use their best efforts to
comply as soon as practicable with all federal and state laws and regulations and stock exchange
listing requirements applicable to any purchase and sale of securities under this Section 7.1.



          Section 7.2 Equity Sale Rights.




32









 





               (a) Until the Second Trigger Date, Liberty Mutual shall have the option to require Agency
Markets to repurchase a pro rata number of shares of Voting Stock held by the members of the
Liberty Mutual Affiliated Group (“Equity Sale Rights”) in the event Agency Markets
undertakes a repurchase of any shares of Voting Stock (a “Share Repurchase”) pursuant to
Rule 10b-18 of the Exchange Act or otherwise, including for the avoidance of doubt, any privately
negotiated purchases as well as purchases on the open market (a “Repurchase Plan”);
provided, however, that Agency Markets shall not be required to repurchase any shares of Voting
Stock from members of the Liberty Mutual Affiliated Group in connection with any Repurchase Period
in excess of the Repurchase Number.



               (b) As soon as practicable after the authorization of a Repurchase Plan, Agency Markets shall
notify Liberty Mutual in writing of such Repurchase Plan, including all details regarding the
Repurchase Plan reasonably requested by Liberty Mutual and the maximum value of the Voting Stock to
be repurchased under such Repurchase Plan (a “Repurchase Plan Notice”). Agency Markets shall not
be permitted to commence repurchases under such Repurchase Plan until five (5) Business Days after
receipt by Liberty Mutual of the Repurchase Plan Notice. In accordance with Applicable Law and
prior to the first day of any Repurchase Period, Liberty Mutual shall notify Agency Markets in
writing if any members of the Liberty Mutual Affiliated Group intend to exercise Equity Sale Rights
during such Repurchase Period and if so, provide Agency Markets with (i) a list of the members of
the Liberty Mutual Affiliated Group from whom such shares will be repurchased and the allocation
among such members and (ii) the Exercise Percentage for such Repurchase Period (collectively, the
“Exercise Notice”). The exercise of Liberty Mutual’s Equity Sale Rights for a given
Repurchase Period shall be irrevocable, unless such sale and repurchase is prohibited by Applicable
Law. The purchase price per share of Voting Stock held by members of the Liberty Mutual Affiliated
Group repurchased by Agency Markets in connection with any Repurchase Period shall be equal to the
quotient of (x) the aggregate purchase price paid for shares of Voting Stock repurchased by Agency
Markets under the Repurchase Plan from Persons other than members of the Liberty Mutual Affiliated
Group during the Repurchase Period divided by (y) the Non-Liberty Repurchase Number (the “Average
Purchase Price”).



               (c) Not later than 10 a.m. on the first Business Day following the end of any Repurchase
Period for which Liberty Mutual exercised its Equity Sale Rights, Agency Markets shall notify
Liberty Mutual and the members of the Liberty Mutual Affiliated Group identified in the Exercise
Notice for such Exercise Period of (x) the aggregate number of shares of Voting Stock held by the
members of the Liberty Mutual Affiliated Group to be repurchased by Agency Markets in respect of
such Repurchase Period under the Equity Sale Rights and (ii) the Average Purchase Price. The
closing of the repurchase and sale of any Voting Stock from members of the Liberty Mutual
Affiliated Group shall take place at 9:00 a.m. on the latest of (i) the fifth (5th) Business Day
following the expiration of the corresponding Repurchase Period; provided, however, that in the
event that the capacity of a Repurchase Plan is exhausted during a Repurchase Period, the fifth
(5th) Business Day following the date such capacity is exhausted and (ii) the fifth (5th) Business
Day following the receipt of any approvals or the expiration of any waiting periods required by
Applicable Law, at the offices of Liberty Mutual indicated in Section 10.1 hereof, or at such other
time and place in Boston, Massachusetts as Liberty Mutual



33









 







and Agency Markets shall agree. At the closing, the applicable members of the Liberty Mutual
Affiliated Group shall deliver to Agency Markets certificates (or, in the event that the applicable
Voting Securities were issued in an uncertificated form, other evidence of ownership) representing
the shares purchased and Agency Markets shall transfer to the applicable members of the Liberty
Mutual Affiliated Group the purchase price in United States dollars by bank check or wire transfer
of immediately available funds, as specified by the applicable members of the Liberty Mutual
Affiliated Group, to an account designated by such members of the Liberty Mutual Affiliated Group
not less than five (5) Business Days prior to the date of repurchase. Agency Markets and the
members of the Liberty Mutual Affiliated Group will use their best efforts to comply as soon as
practicable with all federal and state laws and regulations and stock exchange listing requirements
applicable to any purchase and sale of securities under this Section 7.1.



ARTICLE VIII




OTHER MATTERS



          Section 8.1 Pre-Existing Agreements. Notwithstanding any provision to the contrary
contained in any agreement between any member of the Liberty Mutual Affiliated Group, on the one
hand, and Agency Markets or any of its Subsidiaries, on the other hand, including each agreement
identified on Schedule 8.1 hereto, (each a “Pre-Existing Agreement”), Liberty
Mutual shall not, and shall cause the other members of the Liberty Mutual Affiliated Group not to,
terminate any Pre-Existing Agreement, if such termination would be without cause prior to December
31, 2010. Notwithstanding the foregoing, any Pre-Existing Agreement may be terminated at any time
(x) for cause as set forth in such Pre-Existing Agreement or (y) by mutual agreement of the
parties.




          Section 8.2 Philanthropy; Charitable Contributions. Agency Markets shall, and shall cause
each of its Subsidiaries not to, take any actions that would cause Liberty Mutual to be in breach
of Section 6.16 of the Agreement and Plan of Merger dated as of April 23, 2008 among Liberty Mutual
Insurance Company, Big Apple Merger Corporation and Safeco Corporation.




          Section 8.3 Consent of Holders of Class B Common Stock.




               (a) Until the Second Trigger Date the prior affirmative vote of the holders of a majority of
the outstanding shares of Class B Common Stock, voting separately as a class, shall be required to
authorize Agency Markets to (and, in the case of clauses (ii) through (vii) below, authorize or
permit any Subsidiary to):




               (i) adopt or implement any stockholder rights plan or similar takeover defense
measure;



34









 






               (ii) consolidate or merge with or into any Person (other than in connection
with a Permitted Acquisition) or enter into any other transaction or series of
transactions that would otherwise result in a Change of Control;




               (iii) directly or indirectly acquire Stock, Stock Equivalents or assets
(including any business or operating unit) of any Person (other than Agency Markets
or its Subsidiaries), in each case in a single transaction or series of related
transactions, involving consideration (whether in cash, securities, assets or
otherwise, and including Indebtedness assumed by Agency Markets or any of its
Subsidiaries and Indebtedness of any entity so acquired) paid, delivered or owed by
Agency Markets and its Subsidiaries in excess of $25 million; provided,
however, that this Section 8.3(a)(iii) shall not require the vote of the
holders of Class B Common Stock in connection with acquisitions of securities
pursuant to portfolio investment decisions in the ordinary course of business;




               (iv) directly or indirectly sell, lease, exchange or otherwise dispose of
Stock, Stock Equivalents or assets (including any business or operating unit of
Agency Markets or its Subsidiaries), in each case in a single transaction, or series
of related transactions, involving consideration (whether in cash, securities,
assets or otherwise, and including Indebtedness assumed by any Person other than
Agency Markets or any of its Subsidiaries) paid, delivered or owed to Agency Markets
and its Subsidiaries in excess of $25 million; provided, however,
that this Section 8.3(a)(iv) shall not require the vote of the holders of Class B
Common Stock in connection with dispositions of securities pursuant to portfolio
investment decisions in the ordinary course of business;




               (v) issue any Stock or any Stock Equivalents, except (A) pursuant to the
Initial Public Offering or (B) the issuance of shares of Class A Common Stock or
options or other rights to purchase Class A Common Stock pursuant to employee
benefit plans or dividend reinvestment plans approved by the board of directors of
Agency Markets (provided, however, that notwithstanding the
provision of this clause (B), the prior affirmative vote of the holders of a
majority of the outstanding shares of the Class B Common Stock, voting separately as
a class, shall be required to authorize Agency Markets to finally determine the
aggregate size of its annual equity grants);




               (vi) incur, issue, assume, guarantee or otherwise become liable for, directly
or indirectly, any Indebtedness, except Indebtedness of less than $200 million of
Agency Markets or any of its Subsidiaries in connection with the Revolving Credit
Agreement, dated as of May 12, 2010, among Agency Markets, each lender from time to
time party thereto and Bank of America, N.A. as administrative agent, fronting L/C
Issuer and the several L/C agent, as amended to date;



35









 






               (vii) dissolve, liquidate or wind up Agency Markets;




               (viii) elect, designate, appoint or remove any executive officer of Agency
Markets;




               (ix) declare dividends on any class or series of the capital Stock of Agency
Markets except for dividends required pursuant to preferred stock previously
approved under Section 8.3(a)(x);




               (x) increase or decrease the number of shares of authorized Stock of Agency
Markets or create any class or series of Stock of Agency Markets;




               (xi) change the number of directors on the Agency Markets board of directors,
or fill any newly created memberships or vacancies on the board of directors of
Agency Markets; or




               (xii) alter, amend, terminate or repeal, or adopt any provision inconsistent
with, in each case whether directly or indirectly, or by merger, consolidation or
otherwise, Article IV, Section C, Article V, Article VI, Article VII, Article VIII,
Article X or Article XI of the Agency Markets Charter or Section 2.8(D) of the
Agency Markets Amended and Restated By-Laws.



               (b) Agency Markets shall not undertake any action or conduct that would have the effect of
indirectly engaging Agency Markets or its Subsidiaries in activities that the provisions of this
Section 8.3 would otherwise prohibit.



          Section 8.4 Agency Markets Charter Provisions. Until the Second Trigger Date, Agency
Markets covenants to cause each of its present and future Subsidiaries to take any and all actions
necessary to ensure continued compliance by Agency Markets and its Subsidiaries with the Agency
Markets Charter provisions. Agency Markets shall notify Liberty Mutual in writing as soon as
possible after becoming aware of any act or activity taken or proposed to be taken by Agency
Markets or any of its Subsidiaries which resulted or would result in non-compliance with any Agency
Markets Charter provision and shall take or refrain from taking all such actions as Liberty Mutual
shall in its sole discretion determine necessary or desirable to prevent or remedy any such
non-compliance.




          Section 8.5 Access to Shared Historical Records; Information Arising from Affiliate
Relationship.




               (a) Following the First Trigger Date, Liberty Mutual and Agency Markets will retain the right
to access the shared or commingled historical records, including the



36









 







books, records, and such other records, files, information and/or data, or portions thereof
(the “Records”), related to the historic relationship of Agency Markets, Liberty Mutual and
their respective affiliates as stored or maintained in the storage facilities of any member of the
Liberty Mutual Affiliated Group, Agency Markets and its Subsidiaries or any third party contracted
by them for such storage or maintenance (the “Storage Facilities”). Upon reasonable notice
and at each party’s own expense, Liberty Mutual (and its authorized representatives) and Agency
Markets (and its authorized representatives) will be afforded access to the Records at reasonable
times and during normal business hours at the Storage Facilities, and each party (and its
authorized representatives) will be permitted, at its own expense, to make abstracts from, or
copies of, any such Records; provided, however, that such access does not
unreasonably disrupt the normal operations of Liberty Mutual or Agency Markets, as the case may be.
The parties hereto agree to negotiate a mutually acceptable agreement for the allocation of cost
related to the storage of the Records in the Storage Facilities and, following the First Trigger
Date, to the extent practicable keep separate the records related to the independent operation of
their respective business from the Records. The provision of any Records shall not be deemed a
waiver of any Privilege and the parties shall use reasonable efforts to maintain and protect such
Privileges with reasonable prior notice and in consultation with the other parties.



               (b) For a period of one year following the First Trigger Date, Liberty Mutual and Agency
Markets will retain the right to access any records, information or documents relating to Liberty
Mutual’s and Agency Markets’ relationship as Affiliates. Upon reasonable notice and at each
party’s own expense, Liberty Mutual (and its authorized representatives) and Agency Markets (and
its authorized representatives) will be afforded access to such records at reasonable times and
during normal business hours and each party (and its authorized representatives) will be permitted,
at its own expense, to make abstracts from, or copies of, any such records; provided, that
access to such records may be denied if (i) Liberty Mutual or Agency Markets, as the case may be,
cannot demonstrate a legitimate business need for such access to the records, (ii) the information
contained in the records is subject to any applicable confidentiality commitment to a third party,
(iii) a bona fide competitive reason exists to deny such access, (iv) the records are to be used
for the initiation of, or as part of, a suit or claim against the other party, (v) such access
would serve as a waiver of any Privilege afforded to such record, and (vi) such access will
unreasonably disrupt the normal operations of Liberty Mutual or Agency Markets, as the case may be.



          Section 8.6 Promotional/ Marketing Agreements. Agency Markets and Liberty Mutual shall
exercise all commercially reasonable efforts to continue, including the allocation of costs and
expenses in a fair and reasonable manner, all currently running and planned promotional and
marketing arrangements involving or benefiting, directly or indirectly, (a) primarily Agency
Markets or its Subsidiaries when coordinated by Liberty Mutual and (b) both Agency Markets or its
Subsidiaries and any member of the Liberty Mutual Affiliated Group, until the earliest to occur of
(i) the First Trigger Date, (ii) the agreed upon end of such arrangement or (iii) the date it is no
longer commercially reasonable for either party to continue participation in such arrangement.
Additional promotional arrangements shall be entered into only upon the mutual agreement of the
parties hereto.







37









 








          Section 8.7 Litigation and Settlement Cooperation.




               (a) Prior to the Second Trigger Date, each of Liberty Mutual and Agency Markets will use its
reasonable best efforts to keep each other informed and include the other party in the settlement
of any threatened or filed third-party action, claim or dispute (“Third-Party Action”)
against a member of the Liberty Mutual Affiliated Group, or Agency Markets or one of its
Subsidiaries (in each case, a “Primary Litigant”) which involves the other party (the
“Secondary Litigant”); provided, however, that each of Liberty Mutual and
Agency Markets agree that it shall be responsible, if, in the case of Liberty Mutual, it or a
member of the Liberty Mutual Affiliated Group is a Secondary Litigant, or, in the case of Agency
Markets, it or one of its Subsidiaries is a Secondary Litigant, for the applicable share of any
such settlement obligation and any incremental cost (as reasonably determined by the Primary
Litigant) to the Primary Litigant of including the Secondary Litigant in such settlement. If it is
determined by the Primary Litigant and the Secondary Litigant that the Secondary Litigant is only
named in the Third-Party Action because of its relationship with the Primary Litigant (as current
or former Affiliate), then Liberty Mutual, if it or a member of the Liberty Mutual Affiliated Group
is the Primary Litigant, or Agency Markets, if it or one of its Subsidiaries is the Primary
Litigant, will bear all costs and settlement obligations. The parties agree to cooperate in the
defense and settlement of any Third-Party Action which primarily relates to matters, actions,
events or occurrences taking place prior to the Second Trigger Date. Prior to the Second Trigger
Date, both Agency Markets and Liberty Mutual will use their reasonable best efforts to (i) make the
necessary filings to permit each party to defend its own interests in any Third-Party Action and
(ii) cooperate with one another to ensure that information that has been generated in the course of
the defense of the Third-Party Actions is transferred to the party requiring such information as
soon as practicable.



               (b) For a period of one year following the Second Trigger Date, and except in the case of a
legal or other proceeding by (i) Agency Markets or any of its Subsidiaries against any member of
the Liberty Mutual Affiliated Group or (ii) any member of the Liberty Mutual Affiliated Group
against Agency Markets or any of its Subsidiaries, Agency Markets and Liberty Mutual shall use
their reasonable best efforts to make available to each other, upon written request, the former,
current and future directors, officers, employees, other personnel and agents of such party as
witnesses and any books, records or other documents within its control or which it otherwise has
the ability to make available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or books, records or
other documents may reasonably be required in connection with any legal, administrative or other
proceeding in which the requesting party may from time to time be involved, regardless of whether
such legal, administrative or other proceeding is a matter with respect to which indemnification
may be sought hereunder. The requesting party shall bear all costs and expenses in connection
therewith.



               (c) Notwithstanding ARTICLE IX hereof, prior to the Second Trigger Date, consistent with
applicable fiduciary duties to its insureds, each of Liberty Mutual and Agency Markets will use its
reasonable best efforts to and will cause each of its respective



38









 




Affiliates and Subsidiaries to continue to follow all guidelines, policies and dispute
resolution procedures in effect prior to the Effective Date with respect to the resolution of any
disputes between a member of the Liberty Mutual Affiliated Group on the one hand and Agency Markets
or its Subsidiaries on the other.




          Section 8.8 Compliance and Non-Disparagement.




               (a) Agency Markets hereby covenants that so long as Liberty Mutual is deemed to control Agency
Markets for insurance regulatory purposes, without the prior written consent of Liberty Mutual,
neither Agency Markets nor any of its Subsidiaries shall take any action or fail to take any action
in violation of Applicable Law or Liberty Mutual Compliance Policies that results in any member of
the Liberty Mutual Affiliated Group being in non-compliance with or suffering any reputational harm
or other liability in connection with any Applicable Law. Agency Markets hereby agrees to correct
such action taken or inaction, including taking any reasonable corrective actions requested by
Liberty Mutual.



               (b) Prior to the Second Trigger Date, neither Agency Markets nor any of its Subsidiaries
shall, nor shall their respective officers, directors, employees and agents, make any statement
that disparages, impugns or in any way reflects adversely upon the business or reputation of
Liberty Mutual. Nothing in this Section 8.8(b) shall prevent Agency Markets from truthfully
responding in connection with governmental inquiries or as required by subpoena, court order or
legal process; provided, however, that Agency Markets agrees to first give prompt written notice to
Liberty Mutual of any such legal requirement in order to permit Liberty Mutual sufficient time to
obtain an appropriate protective order or other remedy.



               (c) Prior to the Second Trigger Date, Agency Markets shall not, without the prior written
consent of Liberty Mutual (which shall not be unreasonably withheld, conditioned or delayed),
engage, directly or indirectly, in any act or activity, or fail to take any action, which would:
(i) require any member of the Liberty Mutual Affiliated Group to obtain any approval, consent or
authorization of or otherwise become subject to any Applicable Law; or (ii) cause any director of
Agency Markets who is also a director or officer of a member of the Liberty Mutual Affiliated Group
to be ineligible to serve, or prohibited from serving, under or pursuant to any Applicable Law, as
a director of a member of the Liberty Mutual Affiliated Group. No vote cast or other action taken
by any person who is an officer, director or other representative of a member of the Liberty Mutual
Affiliated Group which vote is cast or action is taken by such person in his or her capacity as a
director of Agency Markets shall constitute a consent of Liberty Mutual for the purpose of this
Section 8.8(c).



          Section 8.9 Policies and Procedures.




               (a) Agency Markets hereby covenants that so long as Liberty Mutual is deemed to control Agency
Markets for insurance regulatory purposes, except as the general counsel and chief compliance
officer of Liberty Mutual consent to in advance, Agency Markets shall and shall cause each of its
Subsidiaries, to follow all Liberty Mutual Compliance Policies,



39









 







except (i) to the extent the rules and regulations of the SEC or any national securities
exchange applicable to Agency Markets or its Subsidiaries requires additional compliance or
disclosure or (ii) as may be otherwise required by Applicable Law following receipt by Liberty
Mutual of a written opinion of counsel to Agency Markets, reasonably acceptable to Liberty Mutual,
to such effect.



               (b) Agency Markets and Liberty Mutual hereby agree that Agency Markets and its Subsidiaries
shall be permitted to develop internal policies and procedures, including compliance-related
policies and procedures, so long as such policies and procedures or compliance therewith would not
violate any Applicable Law that results in any member of the Liberty Mutual Affiliated Group being
in non-compliance with or suffering any reputational harm or other liability in connection with any
Applicable Law.



               (c) Agency Markets hereby covenants that so long as Liberty Mutual is deemed to control Agency
Markets for insurance regulatory purposes, in connection with any insurance regulatory
investigation or examination or notification of a material violation of a Liberty Mutual Compliance
Policy applicable to Agency Markets or any of its Subsidiaries or any member of the Liberty Mutual
Affiliated Group, Agency Markets shall (i) provide prompt written notice of such investigation,
examination or notification to Liberty Mutual and (ii) cooperate with Liberty Mutual in connection
with responding to such investigation, examination or notification, including (A) allowing Liberty
Mutual to direct and control any response and (B) taking any reasonable corrective actions
requested by Liberty Mutual in connection therewith.



          Section 8.10 Software.




               (a) Liberty Mutual Software.




               (i) Liberty Mutual hereby grants, or shall cause the applicable member of the
Liberty Mutual Affiliated Group to hereby grant, to Agency Markets a non-exclusive,
irrevocable (subject to the termination rights specified below), sublicensable to
any Subsidiary of Agency Markets, royalty-free, limited license to copy and use the
Liberty Mutual Software for Agency Markets Business.




               (ii) Agency Markets acknowledges and agrees that, in the case of Liberty Mutual
Software that is licensed solely to a member of the Liberty Mutual Affiliated Group,
such license is subject to the terms of the applicable third party license
agreement, provided that Liberty Mutual shall use commercially reasonable efforts to
obtain such consents from third parties as may be necessary to permit Agency Markets
and its Subsidiaries to continue to use the Liberty Mutual Software after the
Effective Date. All such consent costs shall be borne by Agency Markets, provided
that prior to incurring any such third party



40









 







costs Liberty Mutual must attain the prior written consent of Agency Markets
which may withhold such consent in its sole discretion. Agency Markets understands
and agrees that upon withholding such consent it shall not be permitted to use the
third party licensed software in question and Liberty Mutual shall have no further
obligations with respect to the provision of such software. Agency Markets warrants
and agrees to abide by, and to cause its Subsidiaries to abide by, all the terms and
conditions of any third party license agreements for the Liberty Mutual Software.




               (iii) Any derivative works of the Liberty Mutual Software created by or on
behalf of Agency Markets or its Subsidiaries will be owned by Liberty Mutual, and
Agency Markets and its Subsidiaries hereby assign to Liberty Mutual all right, title
and interest in and to such derivative works. Agency Markets and its Subsidiaries
shall deliver to Liberty Mutual a copy in both source code and object code format of
all such derivative works within thirty (30) days after implementation thereof in a
production environment.




               (iv) The Liberty Mutual Software shall be kept confidential by Agency Markets
and its Subsidiaries pursuant to Section 8.10.




               (v) Liberty Mutual and Agency Markets further acknowledge and agree that THE
LIBERTY MUTUAL SOFTWARE LICENSED PURSUANT TO THIS SECTION 8.10(A) IS BEING PROVIDED
“AS-IS.” LIBERTY MUTUAL SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY OF MERCHANTIBILITY,
FITNESS FOR PARTICULAR PURPOSE, OR NON-INFRINGEMENT AND IMPLIED WARRANTIES ARISING
FROM COURSE OF DEALING OR COURSE OF PERFORMANCE), REGARDING THE LIBERTY MUTUAL
SOFTWARE.




               (vi) All maintenance and support of the Liberty Mutual Software shall be
performed solely by a member of the Liberty Mutual Affiliated Group or its designee.
Except as set forth in the Services Agreement or as otherwise may be agreed in
writing by the parties, neither Liberty Mutual nor any member of the Liberty Mutual
Affiliated Group shall have any support or maintenance obligations with respect to
the Liberty Mutual Software licensed pursuant to this Section 8.10.




               (vii) Notwithstanding anything herein to the contrary, except as may be set
forth in an executed transition services agreement or otherwise agreed in writing by
the parties, the foregoing license shall automatically terminate upon the First
Trigger Date.



41









 






               (viii) The license granted under this Section 8.10 includes only the object
code of the Liberty Mutual Software.



               (b) Agency Markets Software.




               (i) Agency Markets hereby grants, or shall cause its applicable Subsidiary to
hereby grant, to Liberty Mutual a non-exclusive, irrevocable (subject to the
termination rights specified below), sublicensable to any member of the Liberty
Mutual Affiliated Group, royalty-free, unlimited license to copy and use the Agency
Markets Software for the Liberty Mutual Affiliated Group’s own internal business
purposes.




               (ii) Liberty Mutual acknowledges and agrees that, in the case of Agency Markets
Software that is licensed solely to Agency Markets or its Subsidiaries, such license
is subject to the terms of the applicable third party license agreement, provided
that Agency Markets shall use commercially reasonable efforts to obtain such
consents from third parties as may be necessary to permit any member of the Liberty
Mutual Affiliated Group to continue to use the Agency Markets Software after the
Effective Date. All such consent costs shall be borne by Liberty Mutual, provided
that prior to incurring any such third party costs Agency Markets must attain the
prior written consent of Liberty Mutual which may withhold such consent in its sole
discretion. Liberty Mutual understands and agrees that upon withholding such consent
it shall not be permitted to use the third party licensed software in question and
Agency Markets shall have no further obligations with respect to the provision of
such software. Liberty Mutual warrants and agrees to abide by, and to cause the
other members of the Liberty Mutual Affiliated Group to abide by, all the terms and
conditions of any third party license agreements for the Agency Markets Software.




               (iii) The Agency Markets Software shall be kept confidential by the Liberty
Mutual Affiliated Group pursuant to Section 8.10.




               (iv) Liberty Mutual and Agency Markets further acknowledge and agree that THE
AGENCY MARKETS SOFTWARE LICENSED PURSUANT TO THIS SECTION 8.10(B) IS BEING PROVIDED
“AS-IS.” AGENCY MARKETS SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY OF MERCHANTIBILITY,
FITNESS FOR PARTICULAR PURPOSE, OR NON-INFRINGEMENT AND IMPLIED WARRANTIES ARISING
FROM COURSE OF DEALING OR COURSE OF PERFORMANCE), REGARDING THE AGENCY MARKETS
SOFTWARE.



42









 






               (v) Neither Agency Markets nor its Subsidiaries shall have any support or
maintenance obligations with respect to the Agency Markets Software licensed
pursuant to this Section 8.10(b).




               (vi) Notwithstanding anything herein to the contrary, except as otherwise
mutually agreed by the parties, any third party software licenses provided by Agency
Markets to the Liberty Mutual Affiliated Group shall automatically terminate upon
the First Trigger Date.




               (vii) The license granted under this Section 8.10(b) will include both the
source code and the object code for any proprietary software of Agency Markets and
only the object code for any third party owned software.



               (c) Liberty Mutual Software Transition Services.




               (i) The parties understand and agree that Agency Markets is dependent upon
Liberty Mutual for the delivery, support, and continued operation of certain
information technology services and systems for the Agency Markets Business. The
parties agree to enter into a usual and customary Transition Services Agreement
(“TSA”) in connection with any termination of the Agency Markets license to
Liberty Mutual Software set forth in Section 8.10(a) or the termination of the
Services Agreement to be effective as of the date of such termination. The TSA term
shall be at least eighteen (18) months, but not greater than thirty-six (36) months,
unless otherwise agreed between the parties.




               (ii) The TSA shall provide Agency Markets a non-exclusive, limited license to
use the Liberty Mutual Software for the Agency Markets Business as then conducted,
except where such use violates Applicable Law and/or the terms of any Liberty Mutual
third party license agreements. Liberty Mutual further agrees to use commercially
reasonable efforts to obtain any consents from third parties as may be necessary to
grant the foregoing license. All such consent costs shall be borne by Agency
Markets, provided that prior to incurring any such consent costs Liberty Mutual must
obtain the prior written consent of Agency Markets which may withhold such consent
in its sole discretion. Agency Markets understands and agrees that upon withholding
such consent it shall not be permitted to use the Liberty Mutual Software in
question and Liberty Mutual shall have no further obligations with respect to the
provision of such software under the TSA.




               (iii) During the term of the TSA, Agency Markets agrees to utilize commercially
reasonable efforts to migrate off the Liberty Mutual



43









 







Software, except for any expressly provided Liberty Source Code (as defined
below).




               (iv) Furthermore, Agency Markets understands and agrees that upon the
termination and/or expiration of the TSA that any and all support services for the
Liberty Mutual Software, including but not limited to support services for any
Liberty Source Code shall cease.




               (v) Liberty Mutual agrees to enter into with Agency Markets, during the term of
the TSA, a usual and customary non-exclusive, limited license agreement to use any
Liberty Mutual owned software source code (“Liberty Source Code”) that is
requested by Agency Markets and is used in the core claims, underwriting,
financial/regulatory reporting and/or billing systems for the Agency Markets
Business as of the termination and/or expiration of the TSA, and/or any other
mutually agreed to systems and/or platforms. The parties agree that at minimum
Liberty Mutual shall license, subject to the limitations set forth herein and such
other commercially reasonable terms as may be agreed by the parties, the Liberty
Source Code for the so-called “ECPLS” platform as utilized by Agency Markets.



               (d) Liberty Source Code.




               (i) The following limitations shall be applicable to any and all Liberty Source
Code licensed pursuant to any license agreement as may be agreed by the parties:




                    (1) Liberty Mutual shall grant, or shall cause the applicable member of the
Liberty Mutual Affiliated Group to grant, to Agency Markets a non-exclusive,
perpetual (subject to the termination rights specified below), sublicensable to any
Subsidiary of Agency Markets, royalty-free, limited license to copy and use the
Liberty Source Code for the Agency Markets Business as then conducted.




                    (2) The Liberty Source Code shall not be supported, maintained, and/or upgraded
by Liberty Mutual following its delivery to Agency Markets except as set forth in
the TSA.




                    (3) The Liberty Source Code may require third party components and/or software
to be functional. Agency Markets is solely responsible the acquisition and
implementing of any such software and/or components.



44









 






                    (4) If a Control Event occurs, then the Liberty Source Code license shall
automatically terminate, unless otherwise expressly agreed between the parties.
Upon such termination, Agency Markets shall, via written notice, from an Officer of
Agency Markets certify the removal of the Liberty Source Code from any and all of
its systems as well as its destruction.




               (ii) Agency Markets understands and agrees that any Liberty Source Code
provided under this Section is provided “AS IS”. LIBERTY MUTUAL DOES NOT MAKE ANY
REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT
NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT,
COMPATIBILITY, OR THAT THE SOURCE CODE IS ERROR FREE, AND/OR FITNESS FOR A
PARTICULAR PURPOSE.



          Section 8.11 Domain Names.




               (a) Liberty Mutual shall, and shall cause any other applicable members of the Liberty Mutual
Affiliated Group to, assign to Agency Markets or its Subsidiaries the domain names that are owned
by a member of the Liberty Mutual Affiliated Group and used or held for use exclusively in
connection with the Agency Markets Business and identified in writing to Liberty Mutual by Agency
Markets within a reasonably practicable period of time; provided, that (A) no member of the Liberty
Mutual Affiliated Group shall have any obligation to assign to Agency Markets or its Subsidiaries
any domain name incorporating any trademark owned by any member of the Liberty Mutual Affiliated
Group and/or the words “Liberty” or “Liberty Mutual.”



               (b) All out-of-pocket third party costs associated with any assignments made pursuant to this
Section shall accrue to and be paid by Agency Markets.



               (c) If Agency Markets or any its Subsidiaries has, prior to the Effective Date, registered,
either directly or through the Liberty Mutual Affiliated Group, any domain name incorporating a
mark owned by any member of the Liberty Mutual Affiliated Group, Agency Markets shall, and shall
cause Agency Markets or its Subsidiaries to assign such domain name to Liberty Mutual, as soon as
it or a Agency Markets Subsidiary becomes aware of such domain name or is advised of foregoing by
Liberty Mutual.



               (d) The Liberty Mutual Affiliated Group shall maintain the registration of any domain names
incorporating both a mark owned by any member of the Liberty Mutual Affiliated Group and a mark
owned by Agency Markets or its Subsidiary, with an industry-recognized registry operator until the
First Trigger Date, unless otherwise agreed by the parties. Any costs for maintaining such
registrations shall be borne by Agency Markets.



45









 





               (e) Agency Markets shall, and shall cause its Subsidiaries to, cooperate with Liberty Mutual
at Liberty Mutual’s request to effect all such assignments.



          Section 8.12 Guaranty Release and Payments.




               (a) On or prior to the First Trigger Date or as soon as practicable thereafter, Agency Markets
shall (with the reasonable cooperation of the applicable member of the Liberty Mutual Affiliated
Group) use its reasonable best efforts to have any member of the Liberty Mutual Affiliated Group
released as guarantor of, or obligor for, any Guaranty.



               (b) To the extent required to obtain a release from a Guaranty of any member of the Liberty
Mutual Affiliated Group, Agency Markets shall execute a guaranty agreement in the form of the
existing guaranty.



               (c) If Agency Markets is unable to obtain, or to cause to be obtained, any such required
release as set forth in clauses (a) and (b) of this Section 8.12, Agency Markets shall indemnify
and hold harmless the applicable member of the Liberty Mutual Affiliated Group for any Loss arising
from or relating to a Guaranty (in accordance with the provisions of ARTICLE III) and Agency
Markets shall, or shall cause one of its Subsidiaries, as agent or subcontractor for such member,
to pay, perform and discharge fully all the obligations or other liabilities of such member
thereunder.



               (d) Agency Markets further agrees to reimburse any member of the Liberty Mutual Affiliated
Group that has provided a Guaranty for any and all amounts paid or payable (including all fees,
costs and expenses incurred) by such member of the Liberty Mutual Affiliated Group in connection
with the performance by such member of any of its obligations under any Guaranty.



          Section 8.13 Insurance Maintained by Liberty Mutual.




               (a) Prior to the First Trigger Date, Liberty Mutual shall at its option (i) continue to obtain
and maintain the insurance coverage for itself and on behalf of Agency Markets and its Subsidiaries
as was in effect immediately prior to the Effective Date to the extent that Liberty Mutual
continues to obtain and maintain such coverage on a company-wide basis and for the benefit of the
members of the Liberty Mutual Affiliated Group generally or (ii) assist Agency Markets in finding
an acceptable arrangement to replace the insurance coverage referred to in this Section 8.13. To
the extent that any of such insurance coverage is so obtained and maintained, Liberty Mutual shall
use reasonable efforts to obtain and maintain such insurance coverage on payment terms that are
fair and reasonable, including broker commissions and fees. Liberty Mutual’s obligations pursuant
to this Section 8.13 shall terminate as of the First Trigger Date.



46









 





               (b) Agency Markets and its Subsidiaries shall be responsible for any and all losses and
related expenses against them, including, but not limited to, the deductibles (and self-insured
retentions), defense costs and expenses, workers’ compensation self-insurance assessments and
surety bonds, applicable to the insurance coverage referred to in Section 8.13(a), whether such
insurance coverage was in effect prior to or on or after the Effective Date. For any given period
of coverage under any insurance policy referred to in Section 8.13(a) hereof for which a portion of
the premiums are paid for (by cost allocation or otherwise) by Agency Markets or its Subsidiaries,
Agency Markets and its Subsidiaries, collectively, shall be entitled to make claims in respect of
such policy and receive reimbursements for claims made thereunder. Liberty Mutual shall have the
sole and absolute authority to manage any and all claims filed under any policy referred to in this
Section 8.13 or any insurance coverage or self-insurance relating to prior periods;
provided, however, in the event of a conflict of interest between Liberty Mutual
and Agency Markets, the parties agree to be subject to the dispute resolution procedures set forth
in ARTICLE IX hereof for the settlement of any claims with respect to the insurance coverage
maintained by Liberty Mutual on behalf of Agency Markets and its Subsidiaries referred to in
Section 8.13(a) hereto with respect to occurrences pre-dating the First Trigger Date. Subject to
the foregoing proviso, Agency Markets shall have the right to consult with Liberty Mutual regarding
the management and settlement decisions regarding any and all of its claims provided that all
contacts with the insurance company providing the subject coverage shall be directed exclusively
through Liberty Mutual.



          Section 8.14 Regulatory Approvals.




               (a) To the extent that any regulatory or other approvals shall be necessary to effect and
perform any of the provisions of this Agreement or any of the Related Agreements, the parties
hereto shall use their best efforts to obtain such approvals prior to the date upon which not
obtaining such approvals would result in a default of such party’s obligations hereunder. If such
approvals have not been obtained by such date, then each party hereto shall not be deemed to be in
default of its obligations hereunder so long as such party is in good faith diligently using its
best efforts to obtain such approvals as soon as practicable. To the extent that any such
regulatory approval is not obtained within a reasonable period of time after such date, Liberty
Mutual and Agency Markets shall in good faith use their best efforts to find and effect an
alternative means to achieve the same or substantially the same result as that contemplated by such
provision.



               (b) Prior to the First Trigger Date, Liberty Mutual shall, and shall cause the other members
of the Liberty Mutual Affiliated Group to, and Agency Markets shall, and shall cause its
Subsidiaries to, use commercially reasonable assistance making any required filings with or
obtaining any required approvals or non-disapprovals from, the applicable insurance regulators in
connection with any agreements for affiliate transactions, whether such transactions are between
(i) members of the Liberty Mutual Affiliated Group, on the one hand, and Subsidiaries of Agency
Markets, on the other hand or (ii) two (2) or more Subsidiaries of Agency Markets (to the extent
the agreement is approved by Liberty Mutual, if required), including any services agreements to be
entered into in connection with the transfer of Agency Markets Dedicated Employees pursuant to
Section 4.2.



47









 





          Section 8.15 Consent to Certain Agreements. Prior to the First Trigger Date, none of
Agency Markets or any of its Subsidiaries shall enter into any agreement with any member of the
Liberty Mutual Affiliated Group, or with any member of the Liberty Mutual Affiliated Group and a
third party, without obtaining the prior written consent of Liberty Mutual.




          Section 8.16 Volume Purchasing. Liberty Mutual agrees to exercise commercially reasonable
efforts to continue all arrangements now or hereafter in existence pursuant to which members of the
Liberty Mutual Affiliated Group and Agency Markets and its Subsidiaries may purchase discounted
products and services (e.g., volume purchase discounts for computers, telephones, furniture and
stationery, and long distance telephone calling packages) (“Volume Purchasing
Arrangements”), including the allocation of costs and expenses in a fair and reasonable manner
as determined by Liberty Mutual, to the extent permitted by the underlying vendor or supplier
contract, until the earlier to occur of (a) the First Trigger Date or (b) the date it is no longer
commercially reasonable for any member of the Liberty Mutual Affiliated Group to continue
participation in such Volume Purchasing Arrangement. Agency Markets agrees to participate and to
cause its Subsidiaries to participate, until the First Trigger Date, in all Volume Purchasing
Arrangements currently existing, including any extensions or replacements thereof, and any new
Volume Purchasing Arrangements identified by Liberty Mutual to the extent participation in such new
Volume Purchasing Arrangement would not be commercially unreasonable as jointly determined by the
parties. Agency Markets’ and its Subsidiaries’ participation in a particular Volume Purchase
Arrangement includes not purchasing any similar goods or services through any other channels or
means. Agency Markets acknowledges that any breach by it or its Subsidiaries of their obligations
hereunder with respect to a Volume Purchasing Arrangement may result in an increase in the cost of
such products or services to members of the Liberty Mutual Affiliated Group and agrees to reimburse
Liberty Mutual for the aggregate increase in cost to such members.




          Section 8.17 Right of First Offer.




               (a) Subject to Section 8.17(b), prior to the period two (2) years following the First Trigger
Date, Liberty Mutual shall have a right of first offer to provide Agency Markets and its
Subsidiaries with any property and casualty insurance products (including any and all reinsurance)
it does not then provide to Agency Markets and its Subsidiaries, upon such terms and conditions and
at such rates as prevailing in the market at the time such services are provided. During the
period set forth in the preceding sentence, not less than five (5) Business Days prior to entering
into an agreement or arrangement with a party other than Liberty Mutual for the provision of
property and casualty insurance (including any reinsurance), Agency Markets shall, and shall cause
its Subsidiaries to, present Liberty Mutual, in writing, including if applicable the terms and
conditions of any third party proposal, with the opportunity to provide such property and casualty
insurance (including any reinsurance). From the date of receipt of such notice, Liberty Mutual
shall have five (5) Business Days to deliver an offer capable of being accepted for the provision
of such property and casualty insurance (including any reinsurance). If an offer is delivered by
Liberty Mutual within such five (5) Business Day period, Agency Markets and its Subsidiaries may
either accept or reject the offer; provided, however, that (a) no offer may be
unreasonably rejected by Agency Markets and its Subsidiaries and (b) if Agency Markets rejects the
offer it may not enter an agreement with



48









 







another party (other than Liberty Mutual) to provide such coverage on substantially the same
terms and conditions and at substantially the same rates (or on less favorable terms or more
expensive rates) as reflected in the offer for the remaining term of this Section 8.17. If no such
offer is delivered by Liberty Mutual within such five (5) Business Day period, Agency Markets shall
be free to enter into an agreement with another entity for the provision of such property and
casualty insurance (including any reinsurance).



               (b) Notwithstanding anything in this Agreement to the contrary, Agency Markets and its
Subsidiaries shall not be required to comply with Section 8.17(a) to the extent such compliance
would materially and adversely affect the enterprise risk profile of Agency Markets and its
Subsidiaries.



          Section 8.18 Terrorism Risk Insurance Act.




               (a) Liberty Mutual and Agency Markets deem it in their best interest to agree upon a fair and
reasonable method for allocating the Federal Share of Compensation paid to the insurance company
Subsidiaries of Agency Markets (the “Agency Markets TRIA Parties”), on the one hand, and
the insurance company members of the Liberty Mutual Affiliated Group (the “Liberty Mutual TRIA
Parties,” and, collectively with the Agency Markets TRIA Parties, the “TRIA Parties”),
on the other hand, in the event of an Act of Terrorism.



               (b) Through December 31 of the year in which the insurance company Subsidiaries of Agency
Markets are no longer considered to be affiliates of any member of the Liberty Mutual Affiliated
Group for purposes of TRIA, Agency Markets and Liberty Mutual agree as follows::




               (i) Should the TRIA Parties receive a payment of any Federal Share of
Compensation for any Program Year, Liberty Mutual and Agency Markets acknowledge and
agree that the Agency Markets TRIA Parties, on the one hand, and the Liberty Mutual
TRIA Parties, on the other hand, should be entitled to the share of such Federal
Share of Compensation in the same proportion as their respective Insured Losses bear
to the total Insured Losses for all the TRIA Parties for the Program Year to which
Federal Share of Compensation received relates, net of all other collectible
reinsurance (excluding intercompany pooling or affiliate quota share reinsurance)
benefiting the TRIA Parties.




               (ii) The “Direct Earned Premium” of the TRIA Parties will be aggregated for the
purposes of determining the Insurer Deductible for any Program Year.



          Section 8.19 Tax Matters.




49









 





               (a) The Tax Sharing Agreement and this Section 8.19 will govern Liberty Mutual’s and Agency
Markets’ respective rights, responsibilities and obligations with respect to Taxes. Except as
expressly set forth in this Agreement, the Tax Sharing Agreement sets forth the respective
obligations of Liberty Mutual and Agency Markets with respect to the filing of Tax Returns, the
administration of Tax contests, cooperation and other matters, and Taxes incurred in connection
with the Transactions. The Tax Sharing Agreement will continue to be administered in a manner
consistent with past practices (including, without limitation, past practices described in Section
8.19(c). Notwithstanding anything in this Agreement to the contrary, nothing in this Section 8.19
shall create an obligation with respect to (i) members of the Liberty Mutual Affiliated Group
(other than Liberty Mutual) or (ii) any Subsidiary of Agency Markets.



               (b) The principles of the Tax Sharing Agreement and this Section 8.19 will apply to any
Combined Return; provided, however, that Agency Markets shall be liable for any tax
liability in respect of such Combined Return that would otherwise be allocated to any Subsidiary of
Agency Markets by applying these principles, provided that Agency Markets would otherwise
satisfy any stock ownership requirement with respect to the Subsidiary for purposes of filing a Tax
Return on a consolidated, combined, or unitary basis, in the jurisdiction in which such Combined
Return is filed. For purposes of Combined Returns, Agency Markets shall remain party to the Tax
Sharing Agreement and Section 8.19 of this Agreement until it is no longer eligible to join in the
filing of any such Combined Return and shall remain party to the Tax Sharing Agreement and this
Section 8.19 for all Tax years for which it was included in any such Combined Return.



               (c) In administering the Tax Sharing Agreement, it has been the past practice and intent of
Liberty Mutual to compensate Agency Markets and its Subsidiaries in cash for the use of any loss or
credit generated by Agency Markets or its Subsidiaries that is used by a member of the Liberty
Mutual Affiliated Group at the earlier of the time that (1) the loss or credit could otherwise have
been carried back to an earlier Tax period by Agency Markets or the Subsidiary that generated the
loss or credit or (2) the loss or credit is carried forward and utilized (before it would otherwise
expire) by Agency Markets or its Subsidiary. Such compensation has been calculated using the
applicable marginal Tax rate. In the case that a net operating loss is reported on a Consolidated
Return or a Combined Return, the amount of separate net operating loss absorbed from each member
and allocated to each member shall be determined pursuant to the principles of section
1.1502-21(b)(2)(iv) of the Treasury Regulations.



               (d) In the case of a Deconsolidation Event, all Tax computations for (1) any
Pre-Deconsolidation Periods ending on the date of the Deconsolidation Event and (2) the immediately
following taxable period of Agency Markets, shall be made pursuant to the principles of section
1.1502-76(b) of the Treasury Regulations or of a corresponding provision under the laws of other
jurisdictions, as reasonably determined by Liberty Mutual, taking into account all reasonable
suggestions made by Agency Markets with respect thereto.



50









 





               (e) In the case of a Deconsolidation Event, Liberty Mutual and Agency Markets shall cooperate
in determining the allocation of any Tax Assets among Liberty Mutual and Agency Markets. The
parties hereby agree that in the absence of controlling legal authority or unless otherwise
provided under the Tax Sharing Agreement and this Section 8.19, Tax Assets shall be allocated to
the legal entity that is required to bear the liability for the Tax associated with such Tax Asset,
or in the case where no party is required to bear such liability, the party that incurred the cost
or burden associated with the creation of such Tax Asset.



               (f) In the case of a Deconsolidation Event, notwithstanding any other provision of this
Agreement, Agency Markets hereby expressly agrees to elect (under section 172(b)(3) of the Code
and, to the extent feasible, any similar provision of any state, local or non-U.S. Tax law,
including section 1.1502-21(b)(3) of the Treasury Regulations) to relinquish any right to carryback
net operating losses to any Pre-Deconsolidation Period of Liberty Mutual. With respect to any net
operating or other loss for which Agency Markets fails to relinquish the right to a carryback or
for which it is not possible to relinquish the right to a carryback, nothing in the Tax Sharing
Agreement or this Agreement shall require Liberty Mutual to file an amended Tax Return or claim for
refund of Taxes. In no event shall Liberty Mutual be required to compensate Agency Markets for the
carryback of any net operating loss or other Tax Asset to a Pre-Deconsolidation Period of Liberty
Mutual.



               (g) Each of Liberty Mutual and Agency Markets agrees (1) not to take any action reasonably
expected to result in an increased Tax liability to the other, a reduction in a Tax Asset of the
other or an increased liability to the other under the Tax Sharing Agreement or this Section 8.19,
and (2) to take any action reasonably requested by the other that would reasonably be expected to
result in a Tax Benefit or avoid a Tax Detriment to the other, provided, in either such case, that
the taking or refraining to take such action does not result in any additional cost not fully
compensated for by the other party or any other adverse effect to such party. The parties hereby
acknowledge that the preceding sentence is not intended to limit, and therefore shall not apply to,
the rights of the parties with respect to matters otherwise covered by the Tax Sharing Agreement
and this Agreement.



               (h) If Liberty Mutual or Agency Markets possesses documentation relating to the Agency Markets
Business, including books, records, Tax Returns and all supporting schedules and information
relating thereto (the “Agency Markets Business Records”), then it shall retain such Agency
Markets Business Records for a period of ten (10) years following the Effective Date. Thereafter,
if either Liberty Mutual or Agency Markets wishes to dispose of Agency Markets Business Records in
its possession (after the expiration of the applicable statute of limitations), it shall provide
written notice to the other party describing the documentation proposed to be destroyed or disposed
of sixty (60) business days prior to taking such action. The other party may arrange to take
delivery of any or all of the documentation described in the notice at its expense during the
succeeding sixty (60) day period.



          Section 8.20 Notification. Liberty Mutual agrees to provide Agency Markets at least five
(5) Business Days notice, to the extent practicable, prior to the sale or disposition by a




51









 




member of the Liberty Mutual Affiliated Group of shares of Agency Markets (which notice shall
include, to the extent practicable, the number of shares of Agency Markets to be sold or disposed
of and the proposed date or dates of such sale or disposition, but need not include the proposed
selling price or other terms and conditions of such sale or disposition) if, to the actual
knowledge of Liberty Mutual, such sale or distribution by a member of the Liberty Mutual Affiliated
Group would cause any Trigger Date to occur.




          Section 8.21 Change of Corporate Name. If requested by Liberty Mutual (i) on or after the
First Trigger Date or (ii) in connection with any notification provided under Section 8.20, Agency
Markets agrees to use its best efforts to promptly cause Agency Markets and its Subsidiaries to
change their corporate names and cause their certificates of incorporation (or equivalent
organizational documents), as applicable, to be amended to remove any reference to “Liberty Mutual”
and/or “Liberty” or any other trademarks, service marks, corporate names, trade names and other
similar designations owned by any member of the Liberty Mutual Affiliated Group, including but not
limited to any marks licensed to Agency Markets under the Trademark License Agreement. To the
extent that Agency Markets or any of its Subsidiaries is unable to promptly effect such change of
corporate name in accordance with Applicable Law, Agency Markets shall, and shall cause any such
Subsidiary to, conduct business under an assumed name, trade name or “doing business as” name, in
each case, that does not contain any reference to “Liberty Mutual” and/or “Liberty” or any other
trademarks, service marks, corporate names, trade names and other similar designations owned by any
member of the Liberty Mutual Affiliated Group, including but not limited to any marks licensed to
Agency Markets under the Trademark License Agreement. Nothing in this Section 8.21 shall be deemed
to limit, expand or otherwise revise the provisions of the Trademark License Agreement.




          Section 8.22 Fronting Arrangements. Liberty Mutual agrees, prior to the First Trigger
Date, to cause the applicable member of the Liberty Mutual Affiliated Group to continue to provide
non-surety fronting arrangements under quota share reinsurance agreements with Peerless Insurance
Company and Liberty Northwest Insurance Corporation consistent with past practice. Liberty Mutual
further agrees that in the event any member of the Liberty Mutual Affiliated Group terminates such
quota shares, Liberty Mutual shall use its reasonable best efforts to provide for an orderly
wind-down thereof.




          Section 8.23 Enterprise Risk. Until the Second Trigger Date and except as may be consented
to by Liberty Mutual, Agency Markets and Liberty Mutual shall jointly manage the enterprise risk of
Agency Markets (including, but not limited to, exposure to underwriting risk related to natural and
other catastrophes, credit risk in Agency Markets’ investment portfolios, insurance operations and
otherwise and other risks that are of a nature subject to the oversight of the Enterprise Risk
Management Committee of Liberty Mutual) on a consolidated basis with and as determined by, Liberty
Mutual. Agency Markets shall take, or cause to be taken by the Subsidiaries of Agency Markets,
such action with respect to enterprise risk as necessary to effectuate the foregoing and shall take
no action, and shall cause no action to be taken by any Subsidiary of Agency Markets, inconsistent
therewith. Agency Markets hereby covenants that until the Second Trigger Date, Agency Markets
shall deliver to Liberty Mutual, as soon as reasonably practicable after any request therefor, such
information with respect to enterprise risk management of Agency Markets and its Subsidiaries as
may be requested by Liberty Mutual.




52









 





          Section 8.24 Liberty Mutual Services. Until the First Trigger Date, Agency Markets shall
obtain the services provided for under the Services Agreement from one or more members of the
Liberty Mutual Affiliated Group and shall not reduce the scope or volume of such services unless
(i) otherwise consented to by Liberty Mutual, (ii) the Services Agreement terminates for any reason
other than a (A) a termination by Liberty Mutual Insurance Company for any uncured material breach
by Agency Markets or (B) a termination without cause by Agency Markets on 180 days notice or (iii)
Liberty Mutual Insurance Company has reduced the scope of Services provided under the Services
Agreement other than at the direction of Agency Markets.




ARTICLE IX




DISPUTE RESOLUTION



          Section 9.1 Dispute Resolution. (a) Any controversy, claim or dispute arising out of or
relating to this Agreement, or the breach, termination or validity thereof (each, a
“Dispute”) shall be resolved as set forth in this ARTICLE IX.




               (b) Liberty Mutual and Agency Markets shall attempt in good faith to resolve any Dispute
promptly by negotiation between each such party’s designated representatives. Within ten (10) days
after any party’s receipt of a notice of Dispute from the other party setting forth in detail and
together with supporting documentation, if any, the nature and basis of the Dispute (the
“Dispute Notice”), the general counsel and the chief financial officer of Liberty Mutual
and the general counsel and the chief financial officer of Agency Markets shall meet in person at a
mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to
attempt in good faith to resolve the Dispute.



               (c) If the chief financial officer of either Liberty Mutual or Agency Markets declares an
impasse then within thirty (30) days after receipt of the Dispute Notice or as soon thereafter as
practicable, the respective chief executive officers of Liberty Mutual and Agency Markets shall
meet in person at a mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to attempt in good faith to resolve the Dispute.



               (d) If the chief executive officer of either Liberty Mutual or Agency Markets declares an
impasse then within sixty (60) days after receipt of the Dispute Notice (or such longer period, if
the parties so agree in writing), at the demand of either party, the Dispute shall be referred to,
and finally settled by, confidential and binding arbitration in accordance with the then-prevailing
JAMS Streamlined Arbitration Rules and Procedures as modified as follows (the “Rules”):




               (i) There shall be three (3) neutral arbitrators of whom each party shall
select one. The claimant shall select its arbitrator in its demand for arbitration
and the respondent shall select its arbitrator within thirty (30) days



53









 







after receipt of the demand for arbitration. The two (2) arbitrators so
appointed shall select a third arbitrator to serve as chairperson within fourteen
(14) days of the designation of the second of the two (2) arbitrators. If any
arbitrator is not timely appointed, at the request of any party such arbitrator
shall be appointed by JAMS pursuant to the listing, striking and ranking procedure
in the Rules.




               (ii) Each arbitrator appointed by a party shall be either an attorney with
substantial experience with the property and casualty reinsurance and insurance
industry and at least ten (10) years admission to the bar, or a property and
casualty reinsurance and insurance industry professional of at least ten (10) years
standing. The chair of the arbitral tribunal shall either be a practicing attorney
with no less than ten (10) years of practice and experience as an arbitrator, with,
if possible, experience relating to insurance or reinsurance disputes, or be a
retired judge.




               (iii) The place of arbitration shall be Boston, Massachusetts, unless some
other place is mutually selected by the parties. The arbitral tribunal shall be
required to follow the law of the Commonwealth of Massachusetts. The decision and
award of the arbitral tribunal shall be final and binding on the parties and shall
be the sole and exclusive remedy between the parties regarding the matter presented
to the arbitral tribunal, including any claims, counterclaims, issues or accounting
presented to the tribunal. Judgment upon the decision and award may be entered in
any court having jurisdiction. The arbitral tribunal is empowered to award any
remedy provided for under Applicable Law and the terms of this Agreement, including
injunction, specific performance or other forms of equitable relief. The arbitral
tribunal is not empowered to award damages in excess of compensatory damages. Each
party hereby irrevocably waives any right to recover punitive, exemplary or similar
damages with respect to any Dispute.




               (iv) Any arbitration proceedings, decision or award rendered hereunder and the
validity, effect and interpretation of this arbitration agreement shall be governed
by the Federal Arbitration Act, 9 U.S.C. Section 1 et seq.



               (e) Each party shall bear its own costs in any negotiations pursuant to Section 9.1(b) or
Section 9.1(c) and any arbitration, provided that the parties shall share the fees and
expenses of the arbitrators equally as well as any JAMS fees and expenses.



               (f) All negotiations conducted pursuant to Section 9.1(b) or Section 9.1(c) shall be
confidential and shall be treated as compromise and settlement negotiations and may not be
introduced as evidence of an admission against interest of either party and shall not be admissible
as evidence in any other proceeding.



54









 





               (g) Notwithstanding the foregoing provisions, without first resorting to the negotiation
procedures set forth in Sections 9.1(b) and 9.1(c) herein, either party may seek the provisional
judicial remedy of a preliminary injunction or and other form of temporary injunctive relief
(including specific performance), if in its reasonable judgment such action is necessary to avoid
irreparable harm. Without prejudice to such provisional remedies as may be available under the
jurisdiction of such court, the arbitral tribunal shall have full authority to grant provisional
remedies and to direct the parties to request that any court modify or vacate any temporary or
preliminary relief issued by such court, and to award damages for the failure of any party to
respect the arbitral tribunal’s orders to that effect.



               (h) The parties hereby submit to the jurisdiction of the courts of the Commonwealth of
Massachusetts located in Boston, Massachusetts, for the purpose of seeking any provisional remedies
as contemplated by Section 9.1(g) or for any action to compel arbitration or in aid of arbitration
or for the enforcement of any arbitral award rendered thereunder. In any such action, suit or
proceeding, each of the parties irrevocably and unconditionally waives, and agrees not to assert by
way of motion, as a defense or otherwise, any claim that the party is not subject to the
jurisdiction of the above courts, that such action or suit is brought in an inconvenient forum or
that the venue of such action, suit or other proceeding is improper. To the fullest extent
permitted by Applicable Law, each of the parties irrevocably waives all rights to trial by jury in
any such action, suit or other proceeding.



ARTICLE X




MISCELLANEOUS



          Section 10.1 Notices. All notices and other communications provided for hereunder shall be
dated and in writing and shall be deemed to have been given (a) when delivered, if delivered
personally, sent by email or sent by registered or certified mail, return receipt requested,
postage prepaid, (b) on the next business day if sent by overnight courier or (c) when received if
delivered otherwise. Such notices shall be delivered to the address set forth below, or to such
other address or email address as a party shall have furnished to the other party in accordance
with this Section 10.1.




          If to Liberty Mutual or any other member of the Liberty Mutual Affiliated Group, to:



Liberty Mutual Group Inc.

175 Berkeley Street

Boston, MA 02116

Attention: Chief Financial Officer



With a copy to:



Liberty Mutual Group Inc.

175 Berkeley Street




55









 







Boston, MA 02116

Attention: General Counsel



If to Agency Markets or any of its Subsidiaries:



Liberty Mutual Agency Corporation

175 Berkeley Street

Boston, MA 02116

Attention: Chief Financial Officer



With a copy to:



Liberty Mutual Agency Corporation

175 Berkeley Street

Boston, MA 02116

Attention: General Counsel




          Section 10.2 Binding Nature of Agreement. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto or their successors in interest, except
as expressly otherwise provided herein.




          Section 10.3 Descriptive Headings. The descriptive headings of the several articles and
sections of this Agreement are inserted for reference only and shall not limit or otherwise affect
the meanings hereof.




          Section 10.4 Specific Performance and Other Remedies.




               (a) The parties hereby expressly recognize and acknowledge that immediate, extensive and
irreparable damage would result, no adequate remedy at law would exist and damages would be
difficult to determine in the event that any provision of this Agreement is not performed in
accordance with its specific terms or is otherwise breached. Therefore, in addition to, and not in
limitation of, any other remedy available to any party, except as otherwise expressly provided
herein, an aggrieved party under this Agreement would be entitled to specific performance of the
terms hereof and immediate injunctive relief, without the necessity of proving the inadequacy of
money damages as a remedy. Neither party shall be required to obtain or furnish any bond or
similar instrument in connection with or as a condition to obtaining or seeking any such remedy.
For the avoidance of doubt, nothing in this Agreement shall diminish the availability of specific
performance of the obligations under this Agreement or any other injunctive relief.



               (b) Such remedies, and any and all other remedies provided for in this Agreement, shall be
cumulative in nature and not exclusive and shall be in addition to any other remedies whatsoever
which any party may otherwise have. Each of the parties hereby acknowledges and agrees that it may
be difficult to prove damages with reasonable certainty,



56









 







that it may be difficult to procure suitable substitute performance and that injunctive relief
and/or specific performance will not cause an undue hardship to the parties. Each party hereby
further agrees that in the event of any action by the other party for specific performance or
injunctive relief, it will not assert that a remedy at law or other remedy would be adequate or
that specific performance or injunctive relief in respect of such breach or violation should not be
available on the grounds that money damages are adequate or any other grounds.



          Section 10.5 Governing Law. This Agreement shall be construed and enforced in accordance
with, and the rights and duties of the parties shall be governed by, the laws of the Commonwealth
of Massachusetts applicable to contracts made and to be performed entirely in such Commonwealth
(without giving effect to conflicts of laws provisions thereof).




          Section 10.6 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but both of which together shall constitute one and the
same instrument.




          Section 10.7 Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by Applicable Law. To the extent that any
such provision is so held to be invalid, illegal or unenforceable, Liberty Mutual and Agency
Markets shall in good faith use their best efforts to find and effect an alternative means to
achieve the same or substantially the same result as that contemplated by such provision.




          Section 10.8 Confidential Information. All information provided by either party to the
other pursuant to this Agreement shall be kept strictly confidential and neither party will
disclose such information in any manner whatsoever, except (a) if the purpose for which such
information is furnished pursuant to this Agreement contemplates such disclosure, (b) for
disclosure by Liberty Mutual to the other members of the Liberty Mutual Affiliated Group (c) for
disclosure by Agency Markets to Agency Market’s Subsidiaries, (d) in connection with any
disposition of shares of Common Stock Beneficially Owned by Liberty Mutual or other similar
transaction, provided the counterparty to such transaction agrees to maintain the confidentiality
of such information or (e) if such information otherwise becomes generally available to the public.
Notwithstanding the foregoing, either party (or other members of the Liberty Mutual Affiliated
Group or Agency Market’s Subsidiaries, as applicable) shall be entitled to disclose confidential
information to the extent required by Applicable Law (including regulatory requirements related to
the disclosure of material non-public information), provided it shall use its reasonable efforts
(i) only to disclose such portions as are legally required to be disclosed and (ii) to extent
practicable, to provide prior notice to the other party to allow such party an opportunity to
review and comment thereon and, if such disclosure is required by in connection with governmental
inquiries or as required by subpoena, court order or legal process, to seek to obtain an
appropriate protective order or other similar remedy. This Section 10.8 shall not apply to
information relating to or disclosed in connection with the Initial Public Offering.




57









 





          Section 10.9 Amendment and Modification. Subject to Applicable Law, this Agreement may be
amended, modified or supplemented only by written agreement executed by the parties hereto. Any
failure of a party to comply with any obligation, covenant or agreement contained in this Agreement
may be waived by the party entitled to the benefits thereof only by a written instrument duly
executed and delivered by the party granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, covenant or agreement shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure of compliance.




          Section 10.10 Termination.




               (a) This Agreement may be terminated at any time after the Effective Date by mutual consent of
Liberty Mutual and Agency Markets only by written agreement executed by the parties hereto.



               (b) This Agreement shall automatically terminate upon the later of (i) the first (1st)
anniversary of the Second Trigger Date or (ii) the date the members of the Liberty Mutual
Affiliated Group first Beneficially Own, in the aggregate, less than five percent (5%) of the
shares of then outstanding Common Stock.



               (c) Notwithstanding any termination of this Agreement, including pursuant to Section 10.10(a)
or Section 10.10(b), the provisions of ARTICLE III and Sections 4.3 4.4, 4.5, 5.2, 5.4, 5.5, 5.6,
Section 8.12 Section 8.19, Section 8.21 and 10.8, ARTICLE IX and ARTICLE X shall survive
indefinitely and the provisions of Section 8.7 Section 8.8
Section 8.9 Section 8.10, Section
8.17 Section 8.18 shall survive for the period set forth therein.



          Section 10.11 Entire Agreement. This Agreement, including any schedules or exhibits
annexed hereto, embodies the entire agreement and understanding of the parties hereto in respect of
the transactions contemplated by this Agreement other than the Related Agreements. There are no
restrictions, promises, representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter other than the Related
Agreements. In the event and to the extent that there shall be a conflict between the provisions
of this Agreement and the provisions of any Related Agreement, such Related Agreement shall
control, except as otherwise provided therein, provided, further, that notwithstanding anything to
the contrary in the Services Agreement the provisions of Section 8.24 of this Agreement shall
remain in full force and effect.




          Section 10.12 No Assignment. Except as otherwise provided for in this Agreement, neither
this Agreement nor any of the rights, interests or obligations of any party hereto may be assigned
by such party without the prior written consent of the other parties; provided,
however, that Liberty Mutual may assign all or part of its rights or obligations hereunder
to one or more other members of the Liberty Mutual Affiliated Group without the prior written
consent of Agency Markets.







58









 








          Section 10.13 Recapitalization, Dilution Adjustments, etc. In the event that any capital
stock or other securities are issued in respect of, in exchange for, or in substitution of, any
shares of Common Stock by reason of any reorganization, recapitalization, reclassification, merger,
consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets,
distribution to stockholders or combination of the shares of Common Stock then, in each such case,
if necessary, appropriate adjustments shall be made so as to fairly and equitably preserve, as far
as practicable, the original rights and obligations of the parties hereto under this Agreement.




          Section 10.14 Further Actions. Each party hereto shall, on notice of request from any
other party hereto, take such further action not specifically required hereby at the expense of the
requesting party, as the requesting party may reasonably request for the implementation of the
transactions contemplated hereby.




          Section 10.15 Further Assurances. At any time prior to the First Trigger Date, each of the
parties to this Agreement shall execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, all such further conveyances, bills of sale, deeds, endorsements,
assignments, assumptions, releases and other instruments, and shall take such further actions, as
may be otherwise reasonably required to (i) effectively convey and transfer to, and vest in, Agency
Markets and put Agency Markets in possession of any assets and liabilities or contractual rights
and obligations primarily related to the Agency Markets Business as conducted on the Effective Date
which were not transferred or conveyed prior to the Effective Date and (ii) effectively convey and
transfer to, and vest in, the Liberty Mutual Affiliated Group and put the Liberty Mutual Affiliated
Group in possession of any assets and liabilities or contractual rights and obligations not
primarily related to the Agency Markets Business as conducted on the Effective Date which were not
transferred or conveyed prior to the Effective Date. In connection with the foregoing, (x) any
conveyance or transfer of contractual rights or obligations without balance sheet impact or assets
and liabilities with balance sheet impact shall be made with all corresponding contractual rights
and obligations or assets and liabilities, as the case may be, that are primarily related thereto
and (y) the recipient or transferor, as the case may be, shall pay to the other party, as
appropriate, in order to ensure that there is no balance sheet impact (if any would otherwise would
have occurred) after giving effect to any transfer pursuant to this Section 10.15, cash in an
amount equal to the (1) net book value of any assets or (2) stated value of liabilities
transferred, in each case, net of any corresponding assets and liabilities so transferred. The
parties hereto agree to execute any transaction contemplated by this Section 10.15 pursuant to a
document reasonably satisfactory to both parties, including a schedule specifically identifying the
contractual rights and obligations or assets and liabilities to be transferred.




          Section 10.16 No Third Party Beneficiaries. Nothing in this Agreement shall convey any
rights upon any person or entity which is not a party or a permitted assignee of a party to this
Agreement.




          Section 10.17 Drafting of Language. Each of Liberty Mutual and Agency Markets agrees that
the drafting of the language contained in this Agreement was a cooperative effort, that each party
was equally responsible for such drafting and that it would be inequitable




59









 




for either party to be deemed the “drafter” of any specific language contained herein pursuant to
any judicial doctrine or presumption relating thereto.




          Section 10.18 Interpretation. Whenever the words “include,” “includes” or “including” are
used in this Agreement, they shall be deemed to be followed by the words “without limitation.” When
a reference in this Agreement is made to a “party” or “parties,” such reference shall be to a party
or parties to this Agreement unless otherwise indicated. Unless the context requires otherwise,
the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words in this Agreement
refer to this entire Agreement. Unless the context requires otherwise, words in this Agreement
using the singular or plural number also include the plural or singular number, respectively, and
the use of any gender herein shall be deemed to include the other genders. Unless otherwise
specified, references in this agreement to “agent” and “agents” do not refer to independent
insurance agents or brokers of any member of the Liberty Mutual Affiliated Group or Agency Markets
and its Subsidiaries.








60









 








          IN WITNESS HEREOF, the parties have caused this Agreement to be executed by a duly authorized
officer and delivered as of the date first above written.




	 	 	 	 	 

	 

	 	LIBERTY MUTUAL GROUP INC.
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	LIBERTY MUTUAL AGENCY CORPORATION	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 







61











 





Schedule 3.1(b) Guarantees



Liberty Mutual Insurance Company guarantees that, if America First Insurance Company should
suffer any reduction to its capital or surplus as a direct result of a default of an obligor under
any “qualifying Louisiana investment” as defined in Louisiana Revised Statutes 22.1068, the Company
shall pay America First Insurance Company a sufficient amount to reimburse it for such reduction,
not exceeding $5,000,000. As of December 31, 2009, $6,760,348 in “qualifying Louisiana investment”
was held.



Liberty Mutual Insurance Company guarantees the performance of Safeco Insurance Company of America
under a Master Lease Agreement with RBS Asset Finance, Inc.



On March 26, 2010, Peerless Insurance Company entered into a $250 million three-year committed
repurchase agreement with Mitsubishi UFJ Securities (USA), Inc. The repurchase agreement is
guaranteed by Liberty Mutual Insurance Company.








 









 








Schedule 5.1 Liberty Mutual Plans



Liberty Mutual Plans in which Agency Markets or its Subsidiaries will become a participating
employer as of January 1, 2011 pursuant to Section 5.1





	•	 	The Liberty Mutual Employees’ Thrift-Incentive Plan
	 
	•	 	The Liberty Mutual Section 125 Plan
	 
	•	 	The Liberty Mutual Medical Plan
	 
	•	 	The Liberty Mutual Dental Plan
	 
	•	 	The Liberty Mutual Employee Life Insurance Plan
	 
	•	 	The Liberty Mutual Executive Life Insurance Program
	 
	•	 	The Liberty Mutual Insurance Company Optional Life Insurance Plan
	 
	•	 	The Liberty Mutual Death Benefit Only Plan
	 
	•	 	The Liberty Mutual Accidental Death and Dismemberment Insurance Plan
	 
	•	 	The Liberty Mutual Vision Care Plan
	 
	•	 	The Liberty Mutual Short-Term Disability Plan
	 
	•	 	The Liberty Mutual Long-Term Disability Plan
	 
	•	 	The Liberty Mutual Insurance Company Executive Long-Term Disability Plan
	 
	•	 	The Liberty Mutual Long-Term Care Insurance Plan
	 
	•	 	The Liberty Mutual Employees’ Flexible Spending Accounts Program
	 
	•	 	The Liberty Mutual Severance Pay Plan
	 
	•	 	The Liberty Mutual Work Life Solutions Plan
	 
	•	 	The Liberty Mutual Adoption Assistance Plan









 









 








Schedule 5.4 Agency Market Plans



Agency Market Plans established by Agency Markets pursuant to Section 5.4





	 	•	 	Liberty Mutual Agency Corporation Retirement Benefit Plan
	 
	 	•	 	Liberty Mutual Agency Corporation Supplemental Income at Retirement Plan
	 
	 	•	 	Liberty Mutual Agency Corporation Deferred Compensation Plan
	 
	 	•	 	Liberty Mutual Agency Corporation Variable Incentive Plan
	 
	 	•	 	Liberty Mutual Agency Corporation Management Incentive Plan
	 
	 	•	 	Liberty Mutual Agency Corporation Long-Term Incentive Plan








 









 








Schedule 8.1 Pre-Existing Agreements




Management Services Agreements




     Management Services Agreement, dated December 15, 2001, by and between America First Insurance
Company and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of December 31,
2007 and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated January 1, 2006, by and between Gulf States First AIF,
Inc. for an on behalf of itself and as Attorney-in-Fact for America First Lloyds’ Insurance Company
and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of December 31, 2007,
and Amendment No. 2 thereto, effective as of January 1, 2006



     Management Services Agreement, dated January 1, 2009, by and between America Economy Insurance
Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated August 24, 2007, by and between America Fire and Casualty
Company and Liberty Mutual Insurance Company and Amendment No. 1 thereto, effective as of December
31, 2007



     Management Services Agreement, dated January 1, 2009, by and between America States Insurance
Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between America States Insurance
Company of Texas and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between America States Lloyds
Insurance Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between America States Preferred
Insurance Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2002, by and between Colorado Casualty
Insurance Company and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of
December 31, 2007, Amendment No. 2 thereto, effective as of January 1, 2004, and Acknowledgement
Letter, dated October 13, 2005



     Management Services Agreement, dated December 15, 2001, by and between Consolidated Insurance
Company and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of December 31,
2007, and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated December 15, 2001, by and between Excelsior Insurance
Company and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of December 31,
2007, and Acknowledgement Letter, dated October 13, 2005



 









 





     Management Services Agreement, dated January 1, 2009, by and between First National Insurance
Company of America and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between General Insurance Company
of America and Liberty Mutual Insurance Company



     Management Services Agreement, dated August 21, 1997, by and between Golden Eagle Insurance
Corporation and Liberty Mutual Insurance Company and Amendment No 1, thereto, effective as of
December 31, 2007



     Management Services Agreement, dated December 15, 2001, by and between Hawkeye-Security
Insurance Company, f/k/a Tower Insurance Company, Inc., and Liberty Mutual Insurance Company,
Amendment No 1, thereto, effective as of December 31, 2007 and Acknowledgement Letter, dated
October 13, 2005



     Management Services Agreement, dated December 15, 2001, by and between Indiana Insurance
Company and Liberty Mutual Insurance Company, Amendment No 1, thereto, effective as of December 31,
2007 and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated January 1, 2006, by and between Liberty Northwest
Insurance Corporation and Liberty Mutual Insurance Company and Amendment No 1, thereto, effective
as of December 31, 2007



     Management Services Agreement, dated December 15, 2001, by and between Mid-American Fire &
Casualty Company and Liberty Mutual Insurance Company, Amendment No 1, thereto, effective as of
December 31, 2007 and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated December 15, 2001, by and between Montgomery Mutual
Insurance Company and Liberty Mutual Insurance Company and Acknowledgement Letter, dated October
13, 2005



     Management Services Agreement, dated January 1, 2006, by and between North Pacific Insurance
Company and Liberty Mutual Insurance Company and Amendment No 1, thereto, effective as of December
31, 2007



     Management Services Agreement, dated August 24, 2007, by and between Ohio Security Insurance
Company and Liberty Mutual Insurance Company and Amendment No 1, thereto, effective as of December
31, 2007



     Management Services Agreement, dated January 1, 2006, by and between Oregon Automobile
Insurance Company and Liberty Mutual Insurance Company and Amendment No 1, thereto, effective as of
December 31, 2007



     Management Services Agreement, dated December 15, 2001, by and between Atlas Assurance Company
of America, n/k/a Peerless Indemnity Insurance Company, and Liberty Mutual Insurance Company,
Amendment No 1, thereto, effective as of December 31, 2007 and Acknowledgement Letter, dated
October 13, 2005



2









 





     Management Services Agreement, dated December 15, 2001, by and between Peerless Insurance
Company, on behalf of itself and its affiliates, and Liberty Mutual Insurance Company, Amendment
No. 1 thereto, effective as of December 31 2007 and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated January 1, 2009, by and between Safeco Insurance Company
of America and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between Safeco Insurance Company
of Illinois and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between Safeco Insurance Company
of Indiana and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between Safeco Insurance Company
of Oregon and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between Safeco Lloyds Insurance
Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between Safeco National Insurance
Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated January 1, 2009, by and between Safeco Surplus Lines
Insurance Company and Liberty Mutual Insurance Company



     Management Services Agreement, dated December 15, 2001, by and between The Midwestern
Indemnity Company and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of
December 31, 2007 and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated December 15, 2001, by and between The Netherlands
Insurance Company and Liberty Mutual Insurance Company, Amendment No. 1 thereto, effective as of
December 31, 2007 and Acknowledgement Letter, dated October 13, 2005



     Management Services Agreement, dated August 24, 2007, by and between The Ohio Casualty
Insurance Company and Liberty Mutual Insurance Company and Amendment No. 1 thereto, effective as of
December 31, 2007



     Management Services Agreement, dated August 24, 2007, by and between West American Insurance
Company and Liberty Mutual Insurance Company and Amendment No. 1 thereto, effective as of December
31, 2007



3









 





Services Agreements




     Management Agreement, dated as of July 1, 2003, by and between Peerless Insurance Company and
Liberty Mutual Insurance Company and Amendment No. 1, dated as of December 31, 2007, thereto



     Claims Service Agreement, dated January 1, 2010, between Peerless Insurance Company and
Liberty Mutual Insurance Company



     Middle Market Claims Service Agreement, dated as of January 1, 2010, between Peerless
Insurance Company and Liberty Mutual Insurance Company



     National Market Claims Service Agreement, dated as of January 1, 2010, between Peerless
Insurance Company, Helmsman Management Services LLC and Liberty Mutual Insurance Company



     Reciprocal Claims Service Agreement, dated as of February 14, 2000, by and among The Peerless
Insurance Company on behalf of itself and on behalf of the Netherlands Insurance Company, Employers
Insurance of Wausau A Mutual Company on behalf of itself and on behalf of the Wausau Underwriters
Insurance Company; and Liberty Mutual Insurance Company on behalf of itself and on behalf of LM
Insurance Corporation, First Liberty Insurance Corporation, Liberty Mutual Fire Insurance Company
and Liberty Insurance and Amendment No. 1, dated as of December 31, 2007, thereto



     Service Agreement, dated as of April 1, 2006, between Employers Insurance Company of Wausau,
Wausau Business Insurance Company, Wausau General Insurance Company, Wausau Underwriters Insurance
Company and Peerless Insurance Company and Amendment No. 1, dated as of December 31, 2007, thereto



Cash Management Agreements




     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between American Economy Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between American Fire & Casualty Company, Mid-American Fire and Casualty Company, The Midwestern
Indemnity Company, The Ohio Casualty Insurance Company, Ohio Security Insurance Company and Liberty
Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between America First Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between American States Insurance Company and Liberty Mutual Investment Advisors LLC



4









 





     Amended and Restated Cash Management Agreement, effective as of March 1, 2010, by and between
American States Preferred Insurance Company and Liberty Mutual Investment Advisors LLC



     Cash Management Agreement, effective as of January 1, 2010, by and between Colorado Casualty
Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Consolidated Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Excelsior Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between First National Insurance Company of America and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between General Insurance Company of America and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of March 1, 2010, by and between
Golden Eagle Insurance Corporation and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Hawkeye-Security Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Indiana Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Liberty Northwest Insurance Corporation and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between National Insurance Association and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between North Pacific Insurance Company and Liberty Mutual Investment Advisors, LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Oregon Automobile Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Peerless Indemnity Insurance Company and Liberty Mutual Investment Advisors LLC



5









 





     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Peerless Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Safeco Insurance Company of America and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Safeco Insurance Company of Illinois and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Safeco Insurance Company of Indiana and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Safeco Insurance Company of Oregon and Liberty Mutual Investment Advisors LLC



     Cash Management Agreement, effective as of January 1, 2010, by and between Safeco National
Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between Safeco Surplus Lines Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective as of January 1, 2010, by and
between The Netherlands Insurance Company and Liberty Mutual Investment Advisors LLC



     Amended and Restated Cash Management Agreement, effective January 1, 2010, by and between West
American Insurance Company and Liberty Mutual Investment Advisors LLC



Investment Management Agreements




     Investment Management Agreement, effective as of January 1, 2010, by and between America First
Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between America First
Lloyd’s Insurance Company and Liberty Mutual Group Inc.



     Amended and Restated Investment Management Agreement, effective as of January 1, 2010, by and
between American Economy Insurance Company and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of January 1, 2010, by and between American
Economy Insurance Company and Liberty Mutual Group Inc.



6









 





     Investment Management Agreement, effective as of January 1, 2010, by and between American Fire
and Casualty Company, Mid-American Fire & Casualty Company, Ohio Security Insurance Company, The
Midwestern Indemnity Company, The Ohio Casualty Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between America
States Insurance Company and Liberty Mutual Group Inc.



     Amended and Restated Investment Management Agreement, effective as of January 1, 2010, by and
between American States Insurance Company and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of January 1, 2010, by and between American
States Insurance Company of Texas and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between American
States Lloyds Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of March 1, 2010, by and between American States
Preferred Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Colorado
Casualty Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Consolidated
Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Excelsior
Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between First
National Insurance Company of America and Liberty Mutual Group



     Investment Management Agreement, effective as of January 1, 2010, by and between General
Insurance Company of America and Liberty Mutual Group Inc.



     Amended and Restated Investment Management Agreement, effective as of January 1, 2010, by and
between General Insurance Company of America and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of March 1, 2010, by and between Golden Eagle
Insurance Corporation and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between
Hawkeye-Security Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Indiana
Insurance Company and Liberty Mutual Group Inc.



7









 





     Amended and Restated Investment Management Agreement, effective as of January 1, 2010, by and
between Indiana Insurance Company and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of January 1, 2010, by and between Liberty
Northwest Insurance Corporation and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Montgomery
Mutual Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between National
Insurance Association and Liberty Mutual Group.



     Investment Management Agreement, effective as of January 1, 2010, by and between North Pacific
Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Oregon
Automobile Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Peerless
Indemnity Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Peerless
Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Peerless
Insurance Company and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
Insurance Company of America and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
Insurance Company of America and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
Insurance Company of Illinois and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
Insurance Company of Indiana and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
Insurance Company of Oregon and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco Lloyds
Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
National Insurance Company and Liberty Mutual Group Inc.



8









 





     Investment Management Agreement, effective as of January 1, 2010, by and between Safeco
Surplus Lines Insurance Company and Liberty Mutual Group Inc.



     Investment Management Agreement, effective as of January 1, 2010, by and between The
Netherlands Insurance Company and Liberty Mutual Group Inc.



     Amended and Restated Investment Management Agreement, effective as of January 1, 2010, by and
between The Ohio Casualty Insurance Company and Liberty Mutual Investment Advisors LLC



     Investment Management Agreement, effective as of January 1, 2010, by and between West American
Insurance Company and Liberty Mutual Group Inc.



Reinsurance Agreements




     Workers’ Compensation and Employers’ Liability Reinsurance Agreement, effective March 1, 1983,
between Liberty Northwest Insurance Corporation and Liberty Mutual Insurance Company, and
Termination Endorsement thereto dated June 8, 1990



     Reinsurance Agreement No. 19980929LMIC , effective September 29, 1998, by and between Colorado
Casualty Insurance Company and Liberty Mutual Insurance Company



     Property & Casualty Quota Share Reinsurance Agreement, dated as of June 1, 1996, by and
between Albany Insurance Company, n/k/a Liberty Insurance Underwriters Inc., and Atlas Assurance
Company of America and Cancellation Addendum thereto effective as of December 31, 1999



     Property & Casualty Quota Share Retrocession Agreement, effective January 1, 2001, by and
between Peerless Insurance Company and Liberty Mutual Insurance Company



     Reinsurance Agreement, effective as of December 2, 2002, by and between Liberty County Mutual
Insurance Company and Liberty Mutual Insurance Company



     Quota Share Reinsurance Agreement, effective December 1, 2002, between Peerless Insurance
Company and Liberty Mutual Insurance Company (with and on behalf of The First Liberty Insurance
Corporation), Liberty Mutual Fire Insurance Company, LM Insurance Corporation and Liberty Insurance
Corporation



     Casualty Excess of Loss Reinsurance Agreement No. CXoLSH02, effective January 1, 2002, by and
between Bridgefield Casualty Insurance Company, Bridgefield Employers Insurance Company, and
Peerless Insurance Company and Endorsement No. 1 to the Interests and Liabilities Contract thereto,
effective as of September 30, 2003



     Reinsurance Agreement, effective as of January 1, 1993, by and between Liberty Mutual
Insurance Company, Liberty Mutual Fire Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty
Insurance Corporation, LM Insurance Corporation, The First Liberty Insurance



9









 




Corporation and Lexco, Limited and Liberty Northwest Insurance Corporation, Endorsement 1 thereto,
effective January 1, 1994, Endorsement 2 thereto, effective January 1, 1995, Endorsement 3 thereto,
effective January 1, 1996, Endorsement 4 thereto, effective January 1, 1997, Endorsement 5 thereto,
effective January 1, 1998 and Endorsement 6 thereto, effective January 1, 1999




     Property Per Risk Excess of Loss Reinsurance Contract No. LMPpR – 2005, effective January 1,
2005, between Peerless Insurance Company and Liberty Mutual Insurance Company and Interest and
Liabilities Contract thereto, Effective as of January 1, 2005



     Quota Share Reinsurance Contract, effective as of January 1, 2005, by and between Liberty
Mutual Insurance Company (with and on behalf of The First Liberty Insurance Corporation), Liberty
Mutual Fire Insurance Company, LM Insurance Corporation, Liberty Insurance Corporation, Liberty
County Mutual Insurance Company and Liberty Northwest Insurance Corporation



     Casualty Excess of Loss Reinsurance Agreement No. RAMSumCX — 2003, effective January 1, 2003,
by and between Bridgefield Casualty Insurance Company, Bridgefield Employers Insurance Company and
Peerless Insurance Company, Endorsement No. 1 to the Interest and Liabilities Contract thereto,
effective January 1, 2004 and Endorsement No. 2 to the to the Interest and Liabilities Contract
thereto, effective January 1, 2005



     Casualty Excess of Loss Reinsurance Agreement No. RAM Re BSGCX — 2006, effective as of January
1, 2006, by and between Liberty Mutual Insurance Company (with and on behalf of The First Liberty
Insurance Corporation), Liberty Mutual Fire Insurance Company, LM Insurance Corporation, and
Liberty Insurance Corporation (for business classified as Business Solutions Group) and Peerless
Insurance Company



     Property Per Risk Excess of Loss Reinsurance Agreement No. RAM Re BSGPX — 2006, effective as
of January 1, 2006, by and between Liberty Mutual Insurance Company (with and on behalf of The
First Liberty Insurance Corporation), Liberty Mutual Fire Insurance Company, LM Insurance
Corporation, Liberty Insurance Corporation, Liberty County Mutual Insurance Company (for business
classified as LMIC Business Solutions Group) and Peerless Insurance Company



     Quota Share Reinsurance Agreement, effective as of April 1, 2006, between Employers Insurance
Company of Wausau and Peerless Insurance Company



     Wausau Umbrella Quota Share Reinsurance Contract No. RAMWA06UQS, effective as of January 1,
2006, between Peerless Insurance Company and Employers Insurance Company of Wausau, Wausau General
Insurance Company, Wausau Underwriters Insurance Company and Wausau Business Insurance Company



     Casualty Excess of Loss Reinsurance Agreement No. RAM ReSumCX — 2006, effective as of January
1, 2006, by and between Bridgefield Casualty Insurance Company, Bridgefield Employers Insurance
Company and Peerless Insurance Company and Endorsement No. 1 to the Interests and Liabilities
Contract thereto, effective as of January 1, 2007



10









 





     Workers Compensation Excess of Loss Reinsurance Agreement, effective as of January 1, 2000,
between Bridgefield Casualty Insurance Company, Bridgefield Employers Insurance Company, and
Peerless Insurance Company, Addendum No. 1 thereto, effective as of January 1, 2001 and Endorsement
No. 2 to the Interests and Liabilities Contract thereto, effective as of January 1, 2002



     All Lines Casualty Excess of Loss Reinsurance Contract No. 2000260, effective as of January 1,
2007, by and between Peerless Insurance Company and Liberty Mutual Insurance Company and the
Interest and Liabilities Agreement attached thereto



     Casualty Excess of Loss Reinsurance Agreement No. RAMSumCX — 2005, effective as of January 1,
2005, between Bridgefield Casualty Insurance Company, Bridgefield Employers Insurance Company and
Peerless Insurance Company and Endorsement No. 1 to the Interests and Liabilities Contract thereto,
effective as of January 1, 2006



     Reinsurance Agreement, effective as of January 1, 2004, by and between Golden Eagle Insurance
Corporation and the Liberty Mutual Insurance Company, and Amendment No. 1 thereto, effective as of
December 31, 2007



     Wausau Retrocession Quota Share Contract No. 2100400, effective as of April 1, 2008, between
and among Peerless Insurance Company and Liberty Mutual Insurance Company and the Interest and
Liabilities Agreement attached to and forming a part thereof



     Second Casualty Excess of Loss Reinsurance Contract No. 2008159, effective January 1, 2008,
between Peerless Insurance Company and Liberty Mutual Insurance Company and the Interests and
Liabilities Agreement attached thereto



     Casualty Excess of Loss Reinsurance Agreement No. 1000102, effective January 1, 2008, between
Employers Insurance Company of Wausau and Liberty Mutual Insurance Company and Peerless Insurance
Company



     First Casualty Excess of Loss Reinsurance Contract No. 2008158, effective January 1, 2008,
between Peerless Insurance Company and Liberty Mutual Insurance Company and the Interests and
Liabilities Agreement attached thereto



     Property Per Risk Excess of Loss Reinsurance Agreement No. 67316, effective January 1, 2008,
between Employers Insurance Company of Wausau and Liberty Mutual Insurance Company and Peerless
Insurance Company



     Workers’ Compensation Clash Excess of Loss Reinsurance Contract No. 2000290, effective January
1, 2007, between Peerless Insurance Company and Liberty Mutual Insurance Company and the Interest
and Liabilities Agreement attached thereto



     Property Catastrophe Excess of Loss Reinsurance Contract No. 2000240 $300,000,000 XS
$50,000,000, effective January 1, 2007, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



11









 





     Property Catastrophe Excess of Loss Reinsurance Contract No. 2000250 $1,400,000,000 XS
$550,000,000, effective January 1, 2007, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



     Property Catastrophe Excess of Loss Reinsurance Agreement, effective January 1, 2005, between
Peerless Insurance Company and Liberty Mutual Insurance Company



     Property Catastrophe Excess of Loss Reinsurance Contract, effective January 1, 2006, between
Peerless Insurance Company and the various Reinsurers identified by the Interests and Liabilities
Agreements attached to and forming a part thereof, Amendment No. 1 effective January 1, 2006 and
Amendment No. 2 effective January 1, 2006



     Property Catastrophe Excess of Loss Reinsurance Contract No. 2000252 $20,000,000 XS
$30,000,000, effective January 1, 2008, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



     Property Catastrophe Excess of Loss Reinsurance Contract No. 2008250 $800,000,000 XS
$50,000,000, effective January 1, 2008, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



     Property Catastrophe Excess of Loss Reinsurance Contract No. 2009250 $825,000,000 XS
$500,000,000, effective January 1, 2009, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



     Property Catastrophe Excess of Loss Reinsurance Contract No. 2010250 $825,000,000 XS
$500,000,000, effective January 1, 2010, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



     Agency Markets Discontinued Operations Quota Share Reinsurance Contract No. 3100700, effective
January 1, 2010, between Peerless Insurance Company and Liberty Mutual Insurance Company



     100% Quota Share Reinsurance Agreement, effective January 1, 2010, by and between Peerless
Insurance Company and Insurance company of Illinois



     100% Quota Share Reinsurance Agreement, effective January 1, 2010, by and between Peerless
Insurance Company and Liberty Mutual Mid-Atlantic Insurance Company



     Commercial Equipment Breakdown Quota Share Reinsurance Contract No. 3200195, effective January
1, 2010, between Peerless Insurance Company and Liberty Mutual Insurance Company and Endorsement
No.1 thereto, effective as of April 1, 2010



     Workers’ Compensation Catastrophe Excess of Loss Reinsurance Contract No. 2010300, effective
January 1, 2010, between Peerless Insurance Company and Liberty Mutual Insurance Company and the
Interests and Liabilities Agreement attached thereto



12









 





     Workers’ Compensation Catastrophe Clash Excess of Loss Reinsurance Contract No. 2000290,
effective January 1, 2007, between Peerless Insurance Company and Liberty Mutual Insurance Company
and the Interest and Liabilities Agreement attached thereto



     Excess of Loss Reinsurance Contract No. 2000240 $300,000,000 XS $50,000,000, effective January
1, 2007, between Peerless Insurance Company and Liberty Mutual Insurance Company and the Interests
and Liabilities Agreement attached thereto



     Property Catastrophe Excess of Loss Reinsurance Contract No. 2000250 $1,400,000,000 XS
$550,000,000, effective January 1, 2007, between Peerless Insurance Company and Liberty Mutual
Insurance Company and the Interests and Liabilities Agreement attached thereto



     Workmen’s Compensation and General Liability Eighth Excess of Loss Reinsurance Contract,
effective December 18, 1974, issued to Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company by American Union Insurance Company of New York and Endorsement No. 1 thereto,
effective as of December 31, 1975



     Worker’s Compensation and General Liability Fourth Excess of Loss Reinsurance Contract,
effective December 31, 1975, issued to Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company by American Union Insurance Company of New York and the Interests and Liabilities
Agreement thereto, effective December 31, 1976



     Worker’s Compensation and General Liability Seventh Excess of Loss Reinsurance Contract,
effective December 31, 1977, issued to Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company, the Interests and Liabilities Agreement thereto, effective December 31, 1977, by
and between Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company and American
Union Insurance Company of New York and the Interests and Liabilities Agreement thereto, effective
December 31, 1977, by and between Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company and Excess & Treaty Management Corporation Underwriting Manager



     Workers’ Compensation and General Liability Sixth Excess of Loss Reinsurance Contract,
effective December 31, 1978, issued to Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company, the Interests and Liabilities Agreement thereto, effective December 31, 1978, by
and between Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company and American
Union Insurance Company of New York and the Interests and Liabilities Agreement thereto, effective
December 31, 1978, by and between Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company and Excess and Treaty Management Corporation Underwriting Manager



     Workers’ Compensation and General Liability Seventh Excess of Loss Reinsurance Contract,
effective December 31, 1979, issued to Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company, the Interests and Liabilities Agreement thereto, effective May 15, 1979, by and
between Liberty Mutual Insurance Company and Liberty Mutual Fire Insurance Company and American
Union Insurance Company of New York and the Interests and Liabilities Agreement thereto, effective
May 15, 1979, by and between Liberty



13









 




Mutual Insurance Company and Liberty Mutual Fire Insurance Company and Excess and Treaty Management
Corporation Underwriting Manager




     Workers’ Compensation and General Liability Sixth Excess of Loss Reinsurance Contract,
effective December 31, 1980, issued to Liberty Mutual Insurance Company and Liberty Mutual Fire
Insurance Company, Endorsement No. 2 thereto, effective December 31, 1980, between Liberty Mutual
Insurance Company and Liberty Mutual Fire Insurance Company and American Union Insurance Company of
New York and Endorsement No. 2 thereto, effective December 31, 1980, by and between Liberty Mutual
Insurance Company and Liberty Mutual Fire Insurance Company and Excess & Treaty Management
Corporation Underwriting Manager



     Workers’ Compensation and General Liability Sixth Excess of Loss Reinsurance Contract,
effective December 31, 1981, issued to Liberty Mutual Insurance Company, Liberty Mutual Fire
Insurance Company and Liberty Mutual (Bermuda) Ltd., Endorsement No. 3 thereto, effective December
31, 1981, between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company and
Liberty Mutual (Bermuda) Ltd. and Excess & Treaty Management Corporation Underwriting Manager and
Endorsement No. 3 thereto, effective December 31, 1981, between Liberty Mutual Insurance Company,
Liberty Mutual Fire Insurance Company and Liberty Mutual (Bermuda) Ltd. and American Union
Insurance Company of New York



     Workers’ Compensation and General Liability Sixth Excess of Loss Reinsurance Contract,
effective December 31, 1983, issued to Liberty Mutual Insurance Company, Liberty Mutual Fire
Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty
Northwest Insurance Corporation, the Interests and Liabilities Agreement thereto, effective
December 31, 1983, between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company,
Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest Insurance
Corporation and American Union Insurance Company of New York and the Interests and Liabilities
Agreement thereto, effective December 31, 1983, between Liberty Mutual Insurance Company, Liberty
Mutual Fire Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and
Liberty Northwest Insurance Corporation and Atlas Assurance Company of America by GRE-Re of America
Corp.



     Workers’ Compensation and General Liability Seventh Excess of Loss Reinsurance Contract,
effective December 31, 1984, Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance
Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest
Insurance Corporation and the Interests and Liabilities Agreement thereto, effective December 31,
1984, between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance Company, Liberty
Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest Insurance Corporation
and American Union Insurance Company of New York



     Workers’ Compensation and General Liability Sixth Excess of Loss Reinsurance Contract,
effective December 31, 1984, issued to Liberty Mutual Insurance Company, Liberty Mutual Fire
Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty
Northwest Insurance Corporation and the Interests and Liabilities Agreement thereto, effective
December 31, 1984, by and between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance
Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest
Insurance Corporation and American Union Insurance Company of New York



14









 





     Workers’ Compensation and General Liability Seventh Excess of Loss Reinsurance Contract,
effective January 1, 1986, issued to Liberty Mutual Insurance Company, Liberty Mutual Fire
Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty
Northwest Insurance Corporation and the Interests and Liabilities Agreement thereto, effective
January 1, 1986, by and between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance
Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest
Insurance Corporation and American Union Insurance Company of New York



     Workers’ Compensation and General Liability Seventh Excess of Loss Reinsurance Contract,
effective January 1, 1987, issued to Liberty Mutual Insurance Company, Liberty Mutual Fire
Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty
Northwest Insurance Corporation and the Interests and Liabilities Agreement thereto, effective
January 1, 1987, by and between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance
Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest
Insurance Corporation and American Union Insurance Company of New York



     Workers’ Compensation and General Liability Sixth Excess of Loss Reinsurance Contract,
effective January 1, 1988, issued to Liberty Mutual Insurance Company, Liberty Mutual Fire
Insurance Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty
Northwest Insurance Corporation and the Interests and Liabilities Agreement thereto, effective
January 1, 1988, by and between Liberty Mutual Insurance Company, Liberty Mutual Fire Insurance
Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation and Liberty Northwest
Insurance Corporation and American Union Insurance Company of New York



     Liberty Mutual Surety Reinsurance Agreement, effective January 1, 2008, by and between
Peerless Insurance Company and Liberty Mutual Insurance Company



     Casualty Excess of Loss Reinsurance Agreement No. SummitCX2007, effective January 1, 2007,
between Bridgefield Casualty Insurance Company, Bridgefield Employers Insurance Company, and
Peerless Insurance Company and Endorsement No. 1 to the Interests and Liabilities Contract thereto,
effective as of September 30, 2003



     Commercial Umbrella Excess of Loss Reinsurance Contract No. 2000310, effective January 1,
2007, between Peerless Insurance Company and Liberty Mutual Insurance Company and the Interest and
Liabilities Agreement attached thereto




15