Document:

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                                                                    EXHIBIT 10.9

                       Lumbermens Mutual Casualty Company

                                  July 30, 2003

Insurance Holdings, Inc.
c/o Summit Partners
499 Hamilton Avenue
Palo Alto, CA 94301
Attention:     Peter Y. Chung
               J. Scott Carter

Ladies and Gentlemen:

                  Reference is hereby made to that certain Purchase Agreement
(the "Purchase Agreement"), dated as of July 14, 2003, by and among Insurance
Holdings, Inc., a Delaware corporation ("Buyer"), Kemper Employers Group, Inc.,
a Washington corporation ("KEG"), Lumbermens Mutual Casualty Company, an
Illinois domiciled mutual insurance company ("LMC"), Eagle Pacific Insurance
Company, a Washington domiciled insurance company ("Eagle Pacific"), and Pacific
Eagle Insurance Company, a California domiciled insurance company ("Pacific
Eagle" and, together with KEG, LMC and Eagle Pacific, the "Sellers").
Capitalized terms used but not defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.

                  In connection with the Purchase Agreement, Buyer and Sellers
hereby agree that:

1.    For avoidance of doubt, Buyer and Sellers agree that in order for the
      condition to closing set forth in Section 9.11 of the Purchase Agreement
      to be satisfied, it must be the case that the indicative prospective
      rating provided by A.M. Best & Co. ("Best") states that the rating will
      become effective on or promptly (i.e., within 30 days) following the
      Closing Date.

2.    Buyer shall, in full satisfaction of its obligations contained in Section
      7.12 of the Purchase Agreement to take reasonable steps to secure a an
      "A-" or better indicative rating from Best and the proviso to Section 9.11
      of the Purchase Agreement, take the following steps:

      2.1.  present to Best a business plan which calls for capital
            contributions (not to exceed $30 million at Closing and an
            additional $5 million in 2004) and projected net premium writings
            consistent in all material respects with the financial projections
            attached hereto as Annex I;

      2.2.  put in place a reinsurance program for KEIC consistent in all
            material respects with the past practices of the Eagle Entities,
            including in particular an excess of loss reinsurance arrangement
            attaching no higher than $500,000 and extending to a minimum level
            of $100 million, with a maximum retention of 50% of the $500,000 in
            excess of the first $500,000, and no retention of any loss above
            such amount (other than any retention that is provided in the Eagle
            Entities' reinsurance agreements in effect as of the date of this
            letter agreement);

      2.3.  make offers of employment to all of the current management team of
            the Eagle Entities;

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      2.4.   represent that it will not make any fundamental shift from the
             Eagle Entities' business strategy (as in existence as of the date
             hereof) and target markets through December 31, 2004;

      2.5.   adopt an investment management strategy focused on government and
             other high grade fixed income securities (or any other security
             constituting a "Permitted Investment" under the Escrow Agreement);
             and

      2.6.   provide to Best copies of the Purchase Agreement and Annexes A
             through I thereto.

      3.3.1. Following the Closing, Buyer or KEIC shall pay to LMC the following
             amounts by wire transfer of immediately available funds to the
             account designated by LMC:

             3.1.1. within 60 days after the first Profit Share Calculation
                    Date, 25% of the Profit Share Amount;

             3.1.2. within 60 days after the second Profit Share Calculation
                    Date, 50% of the Profit Share Amount less the aggregate
                    amount previously paid in accordance with this Section 3.1;
                    and

             3.1.3. within 60 days after the third Profit Share Calculation
                    Date, 100% of the Profit Share Amount less the aggregate
                    amount previously paid in accordance with this Section 3.1.

      3.2.  For purposes of this letter,

             3.2.1. "Profit Share Amount" shall mean the following amount with
                    respect to the first new policies (i.e., not any subsequent
                    renewal thereof) (collectively, the "Subject Policies")
                    issued by KEIC immediately following the cancellation or
                    early termination (i.e., if canceled or terminated prior to
                    the natural expiration date of an applicable policy) of an
                    insured's (i) Agent Policy with either of the Eagle Entities
                    or (ii) Agent Policy written by LMC and 100% reinsured by
                    the Eagle Entities (an "LMC Fronted Policy"):

                        1.    earned premium (including all audit adjustments)
                              with respect to the Subject Policies for the
                              period from the date of first issue through and
                              include to the natural expiration date of the
                              cancelled policy (which in most, if not all, cases
                              will be the normal anniversary rating date (NARD)
                              for such insured), minus

                        2.    (a) case incurred losses plus allocated loss
                              adjustment expense with respect to the Subject
                              Policies multiplied by (b) a cumulative incurred
                              loss development factor to be determined at each
                              Profit Share Calculation Date by a mutually agreed
                              qualified actuary (which may, but shall not
                              necessarily, be current or prospective employees
                              of LMC) multiplied by (c) a discount factor of
                              0.9107 multiplied by (d) an unallocated loss
                              adjustment expense factor of 1.09 (in each case,
                              for the period from the date of first issue
                              through and include to the natural expiration date
                              of the cancelled policy (which in most, if not
                              all, cases will be the normal anniversary rating
                              date (NARD) for such insured)), minus

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                        3.    the earned premium with respect to the Subject
                              Policies for the period from the date of first
                              issue through and include to the natural
                              expiration date of the cancelled policy (which in
                              most, if not all, cases will be the normal
                              anniversary rating date (NARD) for such insured)
                              multiplied by a discounted expense factor of
                              0.1772.

            3.2.2. "Profit Share Calculation Date" shall mean each of the first
                   three anniversaries of the date on which the last Subject
                   Policy expires.

      3.3.  On each Profit Share Calculation Date, Buyer shall provide to LMC
            information and supporting documentation reasonably necessary for
            the calculation of the Profit Share Amount.

      4.4.1. Following the Closing, LMC shall pay to Buyer or KEIC the following
             amounts by wire transfer of immediately available funds to the
             account designated by Buyer or KEIC:

            4.1.1. within 90 days after the first Loss Reserve Calculation Date,
                   10% of the Nominal Profit;

            4.1.2. within 90 days after the second Loss Reserve Calculation
                   Date, 25% of the Nominal Profit less the aggregate amount
                   previously paid in accordance with this Section 4.1;

            4.1.3. within 90 days after the third Loss Reserve Calculation Date,
                   50% of the Nominal Profit less the aggregate amount
                   previously paid in accordance with this Section 4.1;

            4.1.4. within 90 days after the fourth Loss Reserve Calculation
                   Date, 75% of the Nominal Profit less the aggregate amount
                   previously paid in accordance with this Section 4.1; and

            4.1.5. within 90 days after the fifth Loss Reserve Calculation Date,
                   100% of the Nominal Profit less the aggregate amount
                   previously paid in accordance with this Section 4.1.

      4.2.  For purposes of this letter,

            4.2.1. "Nominal Profit" shall mean (in each case, net of third party
                   reinsurance and losses assumed from LMC Fronted Policies):

                        1.    the Subject Reserves, minus

                        2.    indicated case and incurred but not reported loss
                              and allocated loss adjustment expense reserves,
                              minus

                        3.    loss and allocated loss adjustment expense paid
                              after the Closing Date.

            4.2.2. "Subject Reserves" shall mean LMC's indicated loss and
                   allocated loss adjustment expense reserve, net of third party
                   reinsurance and losses assumed from LMC Fronted Policies, for
                   accident dates prior to December 31, 2002 for the Eagle
                   Entities, calculated as of the Closing Date.

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            4.2.3. "Loss Reserve Calculation Date" shall mean each of December
                   31, 2004, December 31, 2005, December 31, 2006, December 31,
                   2007 and December 31, 2008.

      4.3.   On each Loss Reserve Calculation Date, Buyer shall provide to LMC
             information and supporting documentation reasonably necessary for
             the calculation of the Nominal Profit.

      5.5.1. Following the Closing, Sellers shall be responsible for servicing
             the claims under all insurance policies written by KEIC prior to
             the Closing Date and shall indemnify Buyer for Losses and Expenses
             incurred by any Buyer Group Member as a result of the failure of
             LMC (or its Affiliates or subcontractors) to fully and timely
             perform such servicing.

      5.2.   The parties acknowledge that such servicing has been subcontracted
             by LMC to NATLSCO, Inc.

      5.3.   Following the Closing, Sellers shall exercise all of its rights
             with respect to the servicing such claims under its arrangement
             with NATLSCO, Inc. in accordance with the reasonable instructions
             of Buyer.

      5.4.   In recognition of Sellers' remaining responsible for such
             servicing, the definition of KEIC Book Value in the Purchase
             Agreement shall be amended and restated to read in its entirety as
             follows:

             "KEIC BOOK VALUE" means an amount equal to the book value of KEIC
             as of the close of business on the day prior to the Closing Date,
             calculated in accordance with the Agreed Accounting Principles,
             after giving effect to the Commutation Agreement, and increased
             (without duplication) by the aggregate amount of (i) the California
             Prepayments transferred by LMC to KEIC pursuant to Section 7.11 and
             (ii) the non-admitted prepaid unallocated loss adjustment expense
             asset resulting from Sellers' agreement to be responsible for the
             servicing of claims under all insurance policies written by KEIC
             prior to the Closing Date and the prepayment therefor, regardless
             of whether such prepayments would otherwise be included in
             calculating book value in accordance with SAP.

      5.5.   In further recognition of Sellers' remaining responsible for such

             servicing, the calculation of the price/premium (the "Premium") to
             be paid under the Commutation Agreement shall be calculated as (i)
             the amount of all transferred losses, loss adjustment expenses
             (both allocated and unallocated), taxes, licenses and fees as of
             such date minus (ii) the amount of the related tax impact of such
             commutation (utilizing for such calculation prevailing actuarial
             factors used for California workers compensation policies). The
             price/premium to be paid under the Commutation Agreement shall be
             LMC's reasonable, good faith estimate of the Premium, as determined
             within five (5) business days prior to the Closing Date and
             approved by Buyer in its reasonable, good faith discretion, and
             shall be adjusted following the Closing Date in accordance with
             (and within the same time periods set forth in) the provisions of
             Section 4.4 of the Purchase Agreement. The parties acknowledge
             that, in connection with the effectiveness of the Commutation
             Agreement, KEIC shall pay to LMC an amount equal to the unallocated
             loss adjustment expense reserves which

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            were included in the calculation of the Premium. For the avoidance
            of doubt, the parties agree that the calculation of KEIC Book Value
            shall be completed assuming that the foregoing payments had already
            been made (and that the tax liability, if any, arising from such
            commutation had already been satisfied).

      5.6.  The Premium under the Commutation Agreement will not include any
            additional amount for premiums in collection for such policies,
            including audit premium, retrospective premium, deductible
            reimbursements and compensating balance plan premium, which shall
            belong to and remain the responsibility of LMC to collect. The
            parties agree to cooperate with each other with respect to the
            collection of such premium.

      5.7.  To the extent that Sellers would not have otherwise incurred the
            following expenses in servicing such claims, KEIC shall be
            responsible for any expenses incurred after the Closing resulting
            from the transfer from Sellers to KEIC of information from Computer
            Services Corporation relating to the "Point" system utilized in
            servicing such claims.

6.    Section 9.10 of the Purchase Agreement shall be amended and restated to
      read in its entirety as follows:

            SECTION 9.10 RECEIPT OF RELEASES. Buyer shall have received those
      written releases contemplated by the last sentence of Section 8.8 above.

7.    Buyer shall have the right to purchase its own Oracle software licenses
      after the Closing, in lieu of assuming any obligations with respect to any
      of Seller's Oracle software licenses. Buyer shall notify Sellers of its
      decision in this regard at least five business days prior to the Closing.

8.    Each sentence of Section 5.23(h) of the Purchase Agreement is hereby
      amended to include the words "Except as disclosed on Schedule 5.23(h)," at
      the beginning of each such sentence.

9.    The Purchase Agreement shall be amended so that the following provision is
      inserted as a new Section 5.28:

            SECTION 5.28 SALE OF ASSETS. The transactions contemplated by this
      Agreement do not constitute a sale of all or substantially all of the
      assets of LMC.

10.   Buyer is not assuming any of the Sellers' obligations under the
      Termination Protection Agreement for the benefit of John Pasqualetto, and,
      in determining the level of employee benefits to be offered to the LMC
      Employees by Buyer in accordance with Section 8.2 of the Purchase
      Agreement, such arrangement shall be ignored.

11.   The definition of the Post-Signing Due Diligence Period in the Purchase
      Agreement shall be amended and restated to read in its entirety as
      follows:

      "POST-SIGNING DUE DILIGENCE PERIOD" means the period commencing on the
      date of this Agreement and terminating at 11:59 p.m. Pacific Time on July
      30, 2003.

12.   The Ancillary Agreements, Exhibits, Annexes and Schedules attached hereto
      shall constitute the definitive forms of the corresponding Post-Signing
      Documents, except that (i) Annex C is

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      not attached hereto and, in lieu thereof, shall be proposed by Buyer prior
      to the Closing Date and be subject to the final approval of Sellers prior
      to the Closing Date, such approval not to be unreasonably withheld or
      delayed and (ii) references to Exhibit H in the Purchase Agreement shall
      be deleted as the parties have deemed unnecessary the agreement
      contemplated thereby.

13.   The definition of "Agent Policies" in the Purchase Agreement is hereby
      renamed "Broker Policies" (with all references to "Agent Policies" used in
      the Purchase Agreement now to refer to Broker Policies), and the
      definition thereof is amended and restated in its entirety as follows
      "means all policies, including all endorsements thereto, whether written
      prior to or following the date hereof, which either: (a) are marketed,
      underwritten, issued or administered by, or on behalf of, the Eagle
      Entities and were written on the paper of either of the Eagle Entities, or
      (b) as listed under the heading "Agent Policies" on Annex E attached
      hereto, are those USL&H Business policies which are marketed,
      underwritten, issued and administered by LMC or any of its Affiliates
      (other than the Companies) and were written on the paper of LMC or any of
      its Affiliates (other than the Companies)."

14.   The transactions contemplated by the Commutation Agreement shall occur
      simultaneously with the Closing under the Purchase Agreement, and Buyer
      and Sellers each agree to report, for all Tax purposes, the transactions
      occurring under the Commutation Agreement as not having occurred in any
      Post-Closing Tax Period and not allocable to the period after the Closing
      Date. For the avoidance of doubt, Buyer and Sellers agree that the
      preceding sentence shall not alter any party's liability for Taxes as set
      forth in Section 8.1 of the Purchase Agreement.

15.   For avoidance of doubt, Buyer and Sellers agree that Buyer and its
      Affiliates may, notwithstanding Section 8.5 of the Purchase Agreement,
      respond (as may be required by law or otherwise) to any informational
      requests made by any policyholder or broker with respect to the terms of
      cancellation or termination of any policy or the Best rating of either of
      the Eagle Entities, so long as such information requests were not first
      solicited by Buyer.

16.   The reference to "second business day" in Section 7.3(b) of the Purchase
      Agreement is hereby amended to read as follows: "third business day".

17.   The definition of "USL&H Business" in Section 8.3 of the Purchase
      Agreement is hereby amended to delete the word "related" before the words
      "alternative dispute resolution insurance business" and to insert the
      words "related to any state or federal workers compensation" immediately
      following the words "alternative dispute resolution insurance business".

18.   Except as expressly amended by this letter agreement, the Purchase
      Agreement is not otherwise amended or modified and remains in full force
      and effect in accordance with its original terms, and (for avoidance of
      doubt) the Purchase Agreement shall, notwithstanding that this letter
      agreement is dated as of a date after the end of the "Post-Signing Due
      Diligence Period" (as originally defined in the Purchase Agreement), be
      deemed not to have automatically terminated on July 28, 2003.

                  [Remainder of page intentionally left blank]

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      In witness whereof, each of the parties has caused this letter to be
executed as of the date first written above.

                                       INSURANCE HOLDINGS, INC.

                                       By:          /s/ John Pasqualetto
                                             -----------------------------------
                                             Name:  John Pasqualetto
                                             Title: President

                                       KEMPER EMPLOYERS GROUP, INC.

                                       By:          /s/ William A. Hickey
                                             -----------------------------------
                                             Name:  William A. Hickey
                                             Title: Treasurer and Vice President

                                       LUMBERMENS MUTUAL CASUALTY COMPANY

                                       By:          /s/ William A. Hickey
                                             -----------------------------------
                                             Name:  William A. Hickey
                                             Title: Chief Financial Officer and
                                                       Executive Vice President

                                       EAGLE PACIFIC INSURANCE COMPANY

                                       By:          /s/ William A. Hickey
                                             -----------------------------------
                                             Name:  William A. Hickey
                                             Title: Vice President

                                       PACIFIC EAGLE INSURANCE COMPANY

                                       By:          /s/ William A. Hickey
                                             -----------------------------------
                                             Name:  William A. Hickey
                                             Title: Vice President

                                       7<PAGE>

                                                                   EXHIBIT 10.10

                       Lumbermens Mutual Casualty Company

                               September 15, 2003

SeaBright Insurance Holdings, Inc.
  f/k/a Insurance Holdings, Inc.
c/o Summit Partners
499 Hamilton Avenue
Palo Alto, CA 94301
Attention:     Peter Y. Chung
               J. Scott Carter

Ladies and Gentlemen:

                  Reference is hereby made to that certain Purchase Agreement
(as amended, the "Purchase Agreement"), dated as of July 14, 2003, by and among
Insurance Holdings, Inc., a Delaware corporation ("Buyer"), Kemper Employers
Group, Inc., a Washington corporation ("KEG"), Lumbermens Mutual Casualty
Company, an Illinois domiciled mutual insurance company ("LMC"), Eagle Pacific
Insurance Company, a Washington domiciled insurance company ("Eagle Pacific"),
and Pacific Eagle Insurance Company, a California domiciled insurance company
("Pacific Eagle" and, together with KEG, LMC and Eagle Pacific, the "Sellers"),
as amended by that certain Side Letter, dated as of July 30, 2002, by and among
Buyer and the Sellers. Buyer and the Sellers are collectively referred to herein
as the "Parties". Capitalized terms used but not defined herein shall have the
respective meanings ascribed to them in the Purchase Agreement.

                  In connection with the Purchase Agreement, Buyer and Sellers
hereby agree as follows:

                  1. Transitional Use of KEIC's Name. Notwithstanding the
      provisions of Section 8.6(b) of the Purchase Agreement, KEIC shall be
      permitted to use the "Kemper" name on a transitional basis to the extent
      reasonably necessary until KEIC has obtained amended Certificates of
      Authority authorizing it to transact insurance in the name "SeaBright
      Insurance Company" in each applicable jurisdiction in which it intends to
      conduct business (which registration and approval it shall diligently
      pursue); provided that the use of the "Kemper" name by KEIC shall, to the
      extent practicable, be limited to administrative, legal and non-marketing
      purposes.

                  2. No Assignments Without Regulatory Approval Where Required.
      For avoidance of doubt, Buyer and Sellers acknowledge that none of the
      provisions of Section 13.5 of the Purchase Agreement shall be construed to
      relieve any party to the Purchase Agreement from any legal requirement to
      obtain prior approval from any applicable insurance regulatory authority
      prior to the assignment of any of its rights under the Purchase Agreement
      to a third party, and each party to this Agreement shall comply with any
      legal requirements imposed on it in connection with any such assignment.

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                  3. No Other Modifications; Affirmation. Except as expressly
      amended by this letter agreement, the Purchase Agreement is not otherwise
      amended or modified and remains in full force and effect in accordance
      with its original terms (as previously amended in writing prior to the
      date of this letter agreement).

                  4. Claims Servicing Agreement. Parts 1 and 2 of Exhibit B to
      that certain Claims Servicing Agreement to be entered into in connection
      with the consummation of the transactions contemplated under the Purchase
      Agreement shall be amended and restated to read in their entirety as set
      forth on Schedule 1 attached hereto. Except as expressly amended by this
      letter agreement, the Claims Servicing Agreement is not otherwise amended
      or modified.

                  [Remainder of page intentionally left blank]

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      In witness whereof, each of the parties has caused this letter to be
executed as of the date first written above.

                            SEABRIGHT INSURANCE HOLDINGS, INC. f/k/a INSURANCE
                            HOLDINGS, INC.

                            By:          /s/ John Pasqualetto
                                  -------------------------------------------
                                  Name:  John Pasqualetto
                                  Title: President

                            KEMPER EMPLOYERS GROUP, INC.

                            By:          /s/ William A. Hickey
                                  -------------------------------------------
                                  Name:  William A. Hickey
                                  Title: Vice President

                            LUMBERMENS MUTUAL CASUALTY COMPANY

                            By:          /s/ William A. Hickey
                                  -------------------------------------------
                                  Name:  William A. Hickey
                                  Title: Executive Vice President and
                                             Chief Financial Officer

                            EAGLE PACIFIC INSURANCE COMPANY

                            By:          /s/ William A. Hickey
                                  -------------------------------------------
                                  Name:  William A. Hickey
                                  Title: Vice President

                            PACIFIC EAGLE INSURANCE COMPANY

                            By:          /s/ William A. Hickey
                                  --------------------------------------------
                                  Name:  William A. Hickey
                                  Title: Vice President

                                       3

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                                   SCHEDULE 1

                                    EXHIBIT B

                                  FEE SCHEDULE

1.KEIC REPORTED CLAIM FEE

(a) The Reported Claims Fee shall equal 4.5% of the Claim Losses with respect to
the period from and after the Closing Date with respect to the Reported Claims
until the Reported Claims Fee in the aggregate equals 103% of the amount of the
ULAE reserve for the Reported Claims reflected on the balance sheet of EAGLE as
of the Closing Date.

(b) As of December 31, 2011 (the "Cut-Off Date"), if the total Reported Claims
Fee for Claim Losses paid pursuant to paragraph 1(a) above through the Cut-Off
Date is less than 103% of the amount of the ULAE reserve for Reported Claims
reflected on the balance sheet of EAGLE as of the Closing Date, then on or
before May 1, 2011, EAGLE shall pay to KEIC the difference between said total
and said 103%.

2. KEIC NEW CLAIM FEES

(a) The New Claims Fee shall equal 9.0% of the Claim Losses with respect to the
New Claims until the New Claims Fee in the aggregate equals 6% of the gross
unearned premium reserve reflected on the balance sheet of EAGLE as of the
Closing Date.

(b) As of the Cut-Off Date, if the total New Claims Fee for Claim Losses paid
pursuant to paragraph 2(a) above through the Cut-Off Date is less than 6% of the
gross unearned premium reserve reflected on the balance sheet of EAGLE as of the
Closing Date, then on or before May 1, 2011, EAGLE shall pay to KEIC the
difference between said total and said 6%.

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