Document:

exv10w56

EXHIBIT 10.56

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (the “Agreement”) is made and entered into this 1st day of
January 2009, by and between Liberty Mutual Insurance Company (“Liberty Mutual”), Massachusetts
stock insurance company and Safeco Insurance Company of Oregon (“SICO”), an Oregon stock insurance
company.

I. Performance of Services. Liberty Mutual agrees, to the extent requested by SICO, to perform such
services (collectively, “services”) for SICO as SICO determines to be reasonably necessary or
desirable in the conduct of its operations; provided, however, that Liberty Mutual may, in its sole
discretion, decline to provide any of the services contemplated in this Agreement if providing the
requested services would interfere with Liberty Mutual’s ability to meet its obligations to its
policyholders or would otherwise adversely affect Liberty Mutual. All services provided under this
Agreement shall comply with all applicable state laws and regulations governing SICO, including all
laws and regulations relating to review of SICO’s books and records. As may be necessary for the
performance of Liberty Mutual’s services under this Agreement, Liberty Mutual shall have the
authority to negotiate or conclude contracts on behalf of SICO or bind SICO to any such contracts.

The listing of the following services to be performed under this Agreement is not intended to limit
the performance of other services that may be provided by Liberty Mutual to or on behalf of SICO,
as may be agreed to by the parties from time to time:

A. Accounting, financial, tax and auditing. Subject to the direction and control of SICO’s Board of
Directors and responsible officers, Liberty Mutual shall provide SICO with such financial and
accounting services as may be desirable, including:

     1. Preparation and maintenance of annual and quarterly financial statements and other reports
providing information required by the state of domicile and other states in which SICO is
transacting business, the maintenance of necessary and proper records and books of account with
respect to the business of SICO, and the maintenance and compilation of all data required for the
preparation of tax returns.

     2. Assistance to SICO in connection with the examination or audit of the books, records,
affairs and activities of SICO by governmental, insurance or taxing authorities having regulatory
or taxing authority with respect to the operations of SICO, or by any firm of certified public
accounts appointed by SICO to audit its books, records and accounts,

     3. Assistance to SICO with treasury and accounts payable functions as may be determined
between the parties. SICO shall certify to Liberty Mutual the names and specimen signatures of all
officers or employees of SICO who are authorized to sign instructions on its behalf Liberty Mutual
shall have the right to require that all instructions made in connection with this Agreement meet
its satisfaction as to content, form and authenticity.

 

 

Nothing in this Agreement shall be construed to alter the fact that SICO’s books records and
accounts are owned by SICO; and SICO shall have the right to inspect, or authorize others to
inspect, its books, records and accounts.

B. Purchasing, payroll and employee benefits. Subject to the direction and control of SICO’s Board
of Directors and responsible officers, Liberty Mutual shall provide SICO with such services
involving purchasing (including access to group purchasing contracts and fleet management
services), payroll processing, and employee relations and/or benefits as may be permissible and
desirable.

C. Information Technology and Support. Subject to the direction and control of SICO’s Board of
Directors and responsible officers, Liberty Mutual shall provide the technology infrastructure,
information technology systems, software, data center management, network management services,
monitoring, management/oversight, and support services to SICO and shall provide trouble-shooting
functions on behalf of SICO.

D. Policy Administration and Production. Subject to the direction and control of SICO’s Board of
Directors and responsible officers, Liberty Mutual may perform all policy production, print and
mail activities on SICO’s behalf for all the states in which SICO currently operates and in which
it may operate in the future.

E. Real Estate Management. Subject to the direction and control of SICO’s Board of Directors and
responsible officers, Liberty Mutual may handle all matters and issues relating to SICO’s real
estate purchases, sales, leases and lease-backs.

F. Legal. Subject to the direction and control of SICO’s Board of Directors and responsible
officers, Liberty Mutual may provide legal services, including litigation management services, to
or on behalf of SICO.

G. General Administration. Providing all personnel, equipment, data processing programs, materials
and supplies necessary or desirable for the performance of the services contemplated in this
Agreement.

H. Miscellaneous. Subject to the direction and control of SICO’s Board of Directors and responsible
officers, Liberty Mutual may perform such other services on behalf of SICO as it may desire and as
may be mutually agreed to between Liberty Mutual and SICO.

I. Reinsurance. Reinsurance services including, but not limited to (i) agreement to reinsurance
policy and/or contract wordings and endorsements to existing policies; (ii) processing of
reinsurance policy cancellations, nonrenewals and endorsements and other amendatory addenda; (iii)
collection of premiums due under reinsurance policies or contracts, audits and remittances; (iv)
negotiation and purchase of reinsurance coverage; (v) administration of letters of credit and other
arrangements for the provision of security; and (vi) administration of reinsurance contracts.

II. Charges. SICO shall reimburse Liberty Mutual for the reasonable cost of performing any of the
services provided pursuant to this Agreement. Charges for such services shall include direct
expenses and directly allocable expenses allocated to SICO by Liberty Mutual

 

 

in conformity with customary insurance accounting practices consistently applied. The method of
expense allocations under this Agreement shall be consistent with the principles stated in the
Statement of Statutory Accounting Principles No, 70, “Allocation of Expenses.”

III. Accounts and Disbursements. Amounts owing between the parties shall be settled between the
parties on a quarterly basis and payments of amounts owing shall be made within 45 days after the
end of the calendar quarter.

IV. Confidentiality. Liberty Mutual and SICO are prohibited from disclosing or communicating to any
other person, not a party to this Agreement, any confidential or proprietary information or trade
secrets relating to the parties’ respective business or relating to any affiliate or agency of any
party to this agreement, including business methods and techniques, research date, marketing and
sales information, customer lists, know-how and any other information concerning the business
operations of any party of this Agreement, or any such party’s affiliates and subsidiaries,, unless
the disclosure of communication of such information has been consented to in writing by the party
whose confidential and propriety information or trade secrets is to be released. Confidential and
proprietary information shall not include (a) information generally known to the public, (b)
information known to Liberty Mutual or SICO to be non-confidential from other, third party, sources
prior to the execution of this Agreement, and (c) information required to be disclosed by law or a
state or federal governmental agency having authority over the business of Liberty Mutual or SICO,
but only for the limited purpose of such disclosure.

V. Standards for Performance of Delegated Administrative and Management Functions.

A. At all times during the term of this Agreement, Liberty Mutual shall perform all delegated
administrative and management functions at a level that is at least equal to its standards for
performing such functions on behalf of its own insurance operations. In addition, all delegated
administrative and management functions shall be performed in accordance with, and subject to, at
all times, the relevant and applicable state (or federal) insurance laws and regulations to which
SICO’s insurance operations are, or may be, subject.

B. In the event that Liberty Mutual receives a notice from any governmental agency, board, bureau,
commission or public authority of any type, of any alleged violation of any state or federal
insurance law, such notice shall immediately be forwarded to SICO. Liberty Mutual shall cooperate
in responding to any such governmental notice as such notice relates to its tendering of services
under this Agreement.

VI. Term and Termination.

A. Term. This Agreement shall be effective as of the 1st day of January 2009 and shall
continue in full force and effect until terminated in accordance with subsection B, below. In the
event that this Agreement is required to be approved by any state Department of Insurance, any
request for such approval shall seek an effective date that mirrors the date expressed above.

 

 

B. Termination.

     1. Termination without Cause. This Agreement may be terminated, in whole or in relevant part,
as appropriate, by SICO or Liberty Mutual, without case, upon ninety (90) days prior written
notice. The terminating party shall provide the applicable state Department(s) of Insurance with
written notification of any whole or partial termination of this Agreement, as may be appropriate,
in accordance with state law requirements.

     2. Termination with Cause. This Agreement may be terminated immediately, in relevant part, as
appropriate, by SICO or Liberty Mutual, for the following reasons:

     (a) Material failure by Liberty Mutual to perform the services delegated in accordance
with the standards set forth in this Agreement; provided, however, that upon notification by
SICO that the services so delegated are not being performed in an appropriate or satisfactory
manner, Liberty Mutual shall have thirty (30) days in which to cure the deficiency. In the
event the deficiency is not cured to the satisfaction of SICO, SICO may immediately terminate
this Agreement.

     (b) nonpayment of costs by a delegating party to the party performing the services so
delegated.

     (c) The suspension, revocation or other restriction on the insurance license of either
SICO or Liberty Mutual.

     (d) The insolvency, voluntary or involuntary bankruptcy, reorganization or liquidation of
either SICO or Liberty Mutual.

     (e) In the event of (i) the acquisition of SICO by a third party from Liberty Mutual; or
(ii) any other change in control with causes Liberty Mutual to no longer maintain a majority on
the Board of Directors of SICO, then this Agreement shall terminate with respect to SICO as of
the effective date of the change of control

C. Effect of Termination. In the event that this Agreement is terminated, with, or without, cause,
in whole or in part, as appropriate, the relevant services shall continue to be provided by Liberty
Mutual until alternate arrangements reasonably can be made by SICO (the “Transition Services”);
provided, however, that the Transition Services shall not be required to be provided for a period
of time extending beyond ninety (90) days from the effective date of termination, unless otherwise
agreed to by parties. In the event that this Agreement is terminated, in whole or in part, as
appropriate, for any reason other than those relating to change of control as described in Section
VI.B.2(e), above, all such Transition Services shall continue to be compensation for on a cost
basis. In the event that this Agreement is terminated for reasons specified in Section VI.B.2(e),
above, all such Transition Services shall be compensated for at the then-prevailing market rate for
the provision of such services.

 

 

VII. Indemnification.

A. Liberty Mutual Indemnification of SlCO. Liberty Mutual shall indemnify, defend and hold harmless
SICO from and against any expenses, damages, liability, actions, costs or other claims, including
but not limited to reasonable attorney’s fees and associated costs, incurred by SICO either (i) as
a result of the failure of Liberty Mutual or any subcontractor appointed by Liberty Mutual to
comply with any law or administrative regulation, only if such failure is the result of willful
neglect or gross negligence, or (ii) as a result of,or in connection with, Liberty Mutual’s breach
of any duty of obligation hereunder or the breach of any duty or obligation of any subcontractor
appointed by Liberty Mutual if such breach is the result of willful neglect or gross negligence.
SICO may set off against any amount due Liberty Mutual any amount due to SICO, pursuant to this or
any other agreement to which the parties to this indemnification are also parties.

B. SICO’s Indemnification of Liberty Mutual. SICO shall indemnify Liberty Mutual and hold Liberty
Mutual harmless from all actions, liabilities, costs and expenses arising out of or in any way
related to Liberty Mutual’s services under this Agreement, unless directly related to Liberty
Mutual’s willful neglect or gross negligence.

VIII. No Waiver. The parties hereto agree that no indulgence or acceptance of any delinquent or
partial payment or ratification after the fact of any violation or breach of any provision of this
Agreement by any party hereto shall be construed as a waiver of any party’s rights hereunder.

IX. Notices. Any notice required to be given pursuant to any provision of this Agreement shall be
in writing and shall be sent to the parties at their respective last known address by first class
mail, postage prepaid, by overnight delivery service, or by confirmed facsimile transmission.

X. Severability. If any provision of this Agreement is held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision, and this Agreement shall be
construed and enforced as if that provision had not been included.

XI.
Amendment. This Agreement may only be amended upon the written agreement of both parties hereto.

XII. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be
considered an original, but all of which together, shall be considered one and the same.

XIII. Governing Law. This Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts (without application of the conflict of laws principles
thereof).

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement under seal
as of the day and year first above written,

	 	 	 	 	 
	Liberty Mutual Insurance Company

 	 	 
	/s/ James R. Pugh
 	 	 
	By:  	James R. Pugh 	 
	Its:  	Assistant Secretary 	 
	 
	Safeco Insurance Company of Oregon

 	 	 
	/s/ Michael J. Fallon
 	 	 
	By:  	Michael J. Fallon 	 
	Its:  	Chief Financial Officerexv10w57

EXHIBIT 10.57

MANAGEMENT SERVICES AGREEMENT

This Management Services Agreement (the “Agreement”) is made and entered into this 1st day of
January 2009, by and between Liberty Mutual Insurance Company (“Liberty Mutual”), a Massachusetts
stock insurance company and Safeco Lloyds Insurance Company (“SLIC”), a Texas Lloyds company.

I. Performance of Services. Liberty Mutual agrees, to the extent requested by SLIC, to perform such
services (collectively, “services”) for SLIC as SLIC determines to be reasonably necessary or
desirable in the conduct of its operations; provided, however, that Liberty Mutual may, in its sole
discretion, decline to provide any of the services contemplated in this Agreement if providing the
requested services would interfere with Liberty Mutual’s ability to meet its obligations to its
policyholders or would otherwise adversely affect Liberty Mutual. All services provided under this
Agreement shall comply with all applicable state laws and regulations governing SLIC, including all
laws and regulations relating to review of SLIC’s books and records. As may be necessary for the
performance of Liberty Mutual’s services under this Agreement, Liberty Mutual shall have the
authority to negotiate or conclude contracts on behalf of SLIC or bind SLIC to any such contracts.

The listing of the following services to be performed under this Agreement is not intended to limit
the performance of other services that may be provided by Liberty Mutual to or on behalf of SLIC,
as may be agreed to by the parties from time to time:

A. Accounting, financial, tax and auditing. Subject to the direction and control of SLIC’s Board of
Directors and responsible officers, Liberty Mutual shall provide SLIC with such financial and
accounting services as may be desirable, including:

     1. Preparation and maintenance of annual and quarterly financial statements and other reports
providing information required by the state of domicile and other states in which SLIC is
transacting business, the maintenance of necessary and proper records and books of account with
respect to the business of SLIC, and the maintenance and compilation of all data required for the
preparation of tax returns.

     2. Assistance to SLIC in connection with the examination or audit of the books, records,
affairs and activities of SLIC by governmental, insurance or taxing authorities having regulatory
or taxing authority with respect to the operations of SLIC, or by any firm of certified public
accounts appointed by SLIC to audit its books, records and accounts.

     3. Assistance to SLIC with treasury and accounts payable functions as may be determined
between the parties. SLIC shall certify to Liberty Mutual the names and specimen signatures of all
officers or employees of SLIC who are authorized to sign instructions on its behalf. Liberty Mutual
shall have the right to require that all instructions made in connection with this Agreement meet
its satisfaction as to content, form and authenticity.

 

 

Nothing in this Agreement shall be construed to alter the fact that SLIC’s books records and
accounts are owned by SLIC; and SLIC shall have the right to inspect, or authorize others to
inspect, its books, records and accounts.

B. Purchasing, payroll and employee benefits. Subject to the direction and control of SLIC’s Board
of Directors and responsible officers, Liberty Mutual shall provide SLIC with such services
involving purchasing (including access to group purchasing contracts and fleet management
services), payroll processing, and employee relations and/or benefits as may be permissible and
desirable.

C. Information Technology and Support. Subject to the direction and control of SLIC’s Board of
Directors and responsible officers, Liberty Mutual shall provide the technology infrastructure,
information technology systems, software, data center management, network management services,
monitoring, management/oversight, and support services to SLIC and shall provide trouble-shooting
functions on behalf of SLIC.

D. Policy Administration and Production. Subject to the direction and control of SLIC’s Board of
Directors and responsible officers, Liberty Mutual may perform all policy production, print and
mail activities on SLIC’s behalf for all the states in which SLIC currently operates and in which
it may operate in the future.

E. Real Estate Management. Subject to the direction and control of SLIC’s Board of Directors and
responsible officers, Liberty Mutual may handle all matters and issues relating to SLIC’s real
estate purchases, sales, leases and lease-backs.

F. Legal. Subject to the direction and control of SLIC’s Board of Directors and responsible
officers, Liberty Mutual may provide legal services, including litigation management services, to
or on behalf of SLIC.

G. General Administration. Providing all personnel, equipment, data processing programs, materials
and supplies necessary or desirable for the performance of the services contemplated in this
Agreement.

H. Miscellaneous. Subject to the direction and control of SLIC’s Board of Directors and responsible
officers, Liberty Mutual may perform such other services on behalf of SLIC as it may desire, and as
may be mutually agreed to between Liberty Mutual and SLIC.

I. Reinsurance. Reinsurance services including, but not limited to (i) agreement to reinsurance
policy and/or contract wordings and endorsements to existing policies; (ii) processing of
reinsurance policy cancellations, nonrenewal and endorsements and other amendatory addenda; (iii)
collection of premiums due under reinsurance policies or contracts, audits and remittances; (iv)
negotiation and purchase of reinsurance coverage; (v) administration of letters of credit and other
arrangements for the provision of security; and (vi) administration of reinsurance contracts.

II. Charges. SLIC shall reimburse Liberty Mutual for the reasonable cost of performing any of the
services provided pursuant to this Agreement. Charges for such services shall include direct
expenses and directly allocable expenses allocated to SLIC by Liberty Mutual

 

 

in conformity with customary insurance accounting practices consistently applied. The method of
expense allocations under this Agreement shall be consistent with the principles stated in the
Statement of Statutory Accounting Principles No. 70, “Allocation of Expenses.”

III. Accounts and Disbursements. Amounts owing between the parties shall be settled between the
parties on a quarterly basis and payments of amounts owing shall be made within 45 days after the
end of the calendar quarter.

IV. Confidentiality. Liberty Mutual and SLIC are prohibited from disclosing or communicating to any
other person, not a party to this Agreement, any confidential or proprietary information or trade
secrets relating to the parties’ respective business or relating to any affiliate of agency of any
party to this agreement, including business methods and techniques, research data, marketing and
sales information, customer lists, know-how and any other information concerning the business
operations of any party of this Agreement, or any such party’s affiliates and subsidiaries, unless
the disclosure of communication of such information has been consented to in writing by the party
whose confidential and propriety information or trade secrets is to be released. Confidential and
proprietary information shall not include (a) information generally known to the public, (b)
information known to Liberty Mutual or SLIC to be non-confidential from other, third party, sources
prior to the execution of this Agreement, and (c) information required to be disclosed by law or a
state or federal governmental agency having authority over the business of Liberty Mutual or SLIC,
but only for the limited purpose of such disclosure.

V. Standards for Performance of Delegated Administrative and Management Functions.

A. At all times during the term of this Agreement, Liberty Mutual shall perform all delegated
administrative and management functions at a level that is at least equal to its standards for
performing such functions on behalf of its own insurance operations. In addition, all delegated
administrative and management functions shall be performed in accordance with, and subject to, at
all times, the relevant and applicable state (or federal) insurance laws and regulations to which
SLIC’s insurance operations are, or may be, subject.

B. In the event that Liberty Mutual receives a notice from any governmental agency, board, bureau,
commission or public authority of any type, of any alleged violation of any state or federal
insurance law, such notice shall immediately be forwarded to SLIC. Liberty Mutual shall cooperate
in responding to any such governmental notice as such, notice relates to its rendering of services
under this Agreement.

VI. Term and Termination.

A. Term. This Agreement shall be effective as of the 1st day of January 2009 and shall
continue in full force and effect until terminated in accordance with subsection B, below. In the
event that this Agreement is required to be approved by any state Department of Insurance, any
request for such approval shall seek an effective date that mirrors the date expressed above.

 

 

B. Termination.

          1. Termination without Cause. This Agreement may be terminated, in whole or in relevant part,
as appropriate, by SLIC or Liberty Mutual, without case, upon ninety (90) days prior written
notice. The terminating party shall provide the applicable state Department(s) of Insurance with
written notification of any whole or partial termination of this Agreement, as may be appropriate,
in accordance with state law requirements.

          2. Termination with Cause. This Agreement may be terminated immediately, in relevant parts, as
appropriate, by SLIC or Liberty Mutual, for the following reasons:

     (a) Material failure by Liberty Mutual to perform the services delegated in
accordance with the standards set forth in this Agreement; provided, however, that
upon notification by SLIC that the services so delegated are not being performed in
an appropriate or satisfactory manner, Liberty Mutual shall have thirty (30) days in
which to cure the deficiency. In the event the deficiency is not cured to the
satisfaction of SLIC, SLIC may immediately terminate this Agreement.

     (b) nonpayment of costs by a delegating party to the party performing the
services so delegated.

     (c) The suspension, revocation or other restriction on the insurance license of
either SLIC or Liberty Mutual.

     (d) The insolvency, voluntary or involuntary bankruptcy, reorganization or
liquidation of either SLIC or Liberty Mutual.

     (e) In the event of (i) the acquisition of SLIC by a third party from Liberty
Mutual; or (ii) any other change in control with causes Liberty Mutual to no longer
maintain a majority on the Board of Directors of SLIC, then this Agreement shall
terminate with respect to SLIC as of the effective date of the change of control.

C. Effect of Termination. In the event that this Agreement is terminated, with, or without, cause,
in whole or in part, as appropriate, the relevant services shall continue to be provided by Liberty
Mutual until alternate arrangements reasonably can be made by SLIC (the “Transition Services”);
provided, however, that the Transition Services shall not be required to be provided for a period
of time extending beyond ninety (90) days from the effective date of termination, unless otherwise
agreed to by parties. In the event that this Agreement is terminated, in whole or in part, as
appropriate, for any reason other than those relating to change of control as described in Section
VI.B.2(e), above, all such Transition Services shall continue to be compensation for on a cost
basis. In the event that this Agreement is terminated for reasons specified in Section VI.B.2(e),
above, all such Transition Services shall be compensated for at the then-prevailing market rate for
the provision of such services.

 

 

VII. Indemnification.

A. Liberty Mutual Indemnification of SLIC. Liberty Mutual shall indemnify, defend and hold harmless
SLIC from and against any expenses, damages, liability, actions, costs or other claims, including
but not limited to reasonable, attorney’s fees and associated costs, incurred by SLIC either (i) as
a result of the failure of Liberty Mutual or any subcontractor appointed by Liberty Mutual to
comply with any law or administrative regulation, only if such failure is the result of willful
neglect or gross negligence, or (ii) as a result of, or in connection with, Liberty Mutual’s breach
of any duty or obligation hereunder or the breach of any duty or obligation of any subcontractor
appointed by Liberty Mutual if such breach is the result of willful neglect or gross negligence.
SLIC may set off against any amount due Liberty Mutual any amount due to SLIC, pursuant to this or
any other agreement to which the parties to this indemnification are also parties.

B. SLIC’s Indemnification of Liberty Mutual. SLIC shall indemnify Liberty Mutual and hold Liberty
Mutual harmless from all actions, liabilities, costs and expenses arising out of or in any way
related to Liberty Mutual’s services under this Agreement, unless directly related to Liberty
Mutual’s willful neglect or gross negligence.

VIII. No Waiver. The parties hereto agree that no indulgence or acceptance of any delinquent or
partial payment or ratification after the fact of any violation or breach of any provision of this
Agreement by any party hereto shall be construed as a waiver of any party’s rights hereunder.

IX. Notices. Any notice required to be given pursuant to any provision of this Agreement shall be
in writing and shall be sent to the parties at their respective last known address by first class
mail, postage prepaid, by overnight delivery service, or by confirmed facsimile transmission.

X. Severability. If any provision of this Agreement is held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision, and the Agreement shall be
construed and enforced as if that provision had not been included.

XI. Amendment. This Agreement may only be amended upon the written agreement of both parties
hereto.

XII. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be
considered an original, but all of which together, shall be considered one and the same.

XIII. Governing Law. This Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts (without application of the conflict of laws principles
thereof).

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement under seal
as of the day and year first above written.

Liberty Mutual Insurance Company

	 	 	 	 	 
	/s/ James R. Pugh
 	 	 
	By:  	James R. Pugh 	 	 
	Its:  	Assistant  Secretary 	 	 

	 	 	 	 	 
	Safeco Lloyds Insurance Company

General America Corporation of Texas, Its Attorney-In-Fact

 	 	 
	/s/ Michael J. Fallon
 	 	 
	By:  	Michael J. Fallon 	 	 
	Its:  	Chief Financial Officer

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