Document:

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                                                                   EXHIBIT 10.16

                        ADMINISTRATIVE SERVICES AGREEMENT

         This Administrative Services Agreement (this "Agreement") is made as of
September 30, 2003 (the "Effective Date") by and among Kemper Employers
Insurance Company, an Illinois domiciled insurance company (the "Company"), and
Lumbermens Mutual Casualty Company, an Illinois domiciled mutual insurance
company (the "Provider").

                                     RECITAL

A.       Pursuant to the terms and subject to the conditions set forth in the
         Purchase Agreement (as amended, the "Purchase Agreement"), dated as of
         July 14, 2003, by and among Kemper Employers Group, Inc., the Provider,
         Eagle Pacific Insurance Company ("EPIC"), Pacific Eagle Insurance
         Company ("PEIC") and Insurance Holdings, Inc. ("Holdings"), Holdings
         acquired, inter alia, the stock of EPIC and PEIC.

B.       The Company would like to receive, and the Provider is willing to
         provide, directly or through one or more of its Affiliates, certain
         services in accordance with the terms hereof.

                                    AGREEMENT

         In consideration of the mutual undertakings contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Provider and the Company agree as follows:

SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION.

         1.1 Definitions. In this Agreement, the following terms have the
meanings specified or referred to in this Section 1, and shall be equally
applicable to both the singular and plural forms.

         "Action" shall mean any action, claim, suit, arbitration, inquiry,
subpoena, discovery request, proceeding or investigation by or before any
Governmental Authority.

         "Affiliate" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.

         "Expenses" means any and all costs and expenses incurred in connection
with investigating, defending or asserting any Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises incident to any
matter indemnified against hereunder (including court filing fees, court costs,
arbitration fees or costs, witness fees, and reasonable

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fees and disbursements of legal counsel, investigators, expert witnesses,
consultants, accountants and other professionals).

         "Governmental Authority" shall mean any federal, state, local,
municipal, county, foreign or other governmental, quasi-governmental,
administrative or regulatory authority, body, agency, court, tribunal,
commission or other similar governmental entity (including any branch,
department, agency or political subdivision thereof) or any self-regulating body
of similar standing.

         "Intellectual Property" shall means databases, computer software
programs, Internet applications, Internet domain names, object code and source
code (and related documentation), copyrights, patents, trademarks, trade names,
service marks, trade secrets and inventions and all other intellectual property
(and all registrations and applications with respect thereto).

         "Loss" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, fees,
expenses, deficiencies, claims or other charges.

         "Notice" shall mean notice given in accordance with Section 12.1
hereof.

         "Person" shall mean an individual, corporation, insurance company,
partnership, joint venture, limited liability company, association, joint-stock
company, trust, unincorporated organization or Governmental Authority.

         "Service" shall mean each service generally described in Schedule A
hereto, as such Schedule may be amended from time to time in accordance with the
terms hereof, including those related services that may be necessary for the
performance of such services, and any other service that the Provider agrees in
writing to provide.

         1.2 Rules of Construction. For purposes of this Agreement, (i) the
words "include," "includes" and "including" shall be deemed to be followed by
the words "without limitation," and (ii) the words "herein", "hereof", "hereby",
"hereto" and "hereunder" refer to this Agreement as a whole. Unless the context
otherwise requires, references herein: (i) to Articles, Sections and Exhibits
mean the Articles and Sections of, and the Exhibits attached to, this Agreement;
(ii) to an agreement, instrument or other document means such agreement,
instrument or other document as amended, supplemented and modified from time to
time to the extent permitted by the provisions thereof and by this Agreement;
and (iii) to a statute means such statute as amended from time to time and
includes any successor legislation thereto and any regulations promulgated
thereunder. The Exhibits referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein. Titles to Articles and headings of Sections are inserted for
convenience of reference only and shall not be deemed a part of or to affect the
meaning or interpretation of this Agreement.

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Accounting terms used herein shall have the meanings consistently applied by the
Company in its application of statutory accounting principles, based upon the
Company's internal financial policies and procedures in effect from time to
time.

SECTION 2. TERM.

         This Agreement shall commence immediately on and as of the Effective
Date and shall thereafter continue in full force and effect until terminated in
accordance with Section 9 hereof.

SECTION 3. PERFORMANCE OF SERVICES.

         3.1 General. From time to time, beginning on the Effective Date, the
Provider will provide to the Company the Services on an "as needed" basis (as
reasonably determined by the Company).

         3.2 Standard of Care. The Provider will provide the Services hereunder
using the same degree of care, skill and prudence customarily exercised by a
reasonable person when engaged in similar activities on behalf of itself. The
Company acknowledges and agrees that the Provider is not in the business of
providing the Services.

         3.3 Subcontracting. The Provider may, in its discretion, subcontract
any of its obligations in relation to the provision of any Service or portion
thereof to any of its Affiliates or to any other Person, provided that such
other Affiliate or Person shall be subject to the standard of care set forth in
Section 3.2, and any subcontract to any Person (other than an Affiliate) shall
be subject to the approval of the Company, in its reasonable discretion

         3.4 Retention of Control by the Company. All Services provided by the
Provider shall be subject to the ultimate authority, control, review and
limitation of the Company and its Board of Directors. All Services shall be
provided in compliance in all material respects with all applicable laws,
regulations and rulings in all jurisdictions in which the Company transacts
business. The Company shall at all times own it general accounts and records.

SECTION 4. INFORMATION AND DATA.

         4.1 Provision of Company Information; Confidentiality. (a) To enable
the Provider to provide the Services, the Company shall provide information,
furnish access to data and take such other action as is reasonably requested by
the Provider. The Company shall be provided access to such information by the
Provider upon request.

            (b) The Provider shall use commercially reasonable efforts to
maintain the confidentiality of all information provided to, or obtained or used
by (collectively, the "Information") the Provider in the performance of the
Services. The Provider shall not disclose

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such Information without the prior written consent of the Company. Furthermore,
the Provider shall be prohibited from selling Information.

            (c) Notwithstanding any other provision hereof, the Provider will be
permitted to disclose any Information it receives from or on behalf of the
Company or has access to if it such disclosure is: (i) necessary to carry out
the Services; (ii) permitted or required under the Gramm-Leach-Bliley Act or any
other applicable federal or state law or regulation or subpoena or (iii) related
to the tax treatment and tax structure of the transactions contemplated under
this Agreement, including all materials of any kind (including opinions or other
tax analyses); provided that the authorization in the foregoing clause (iii) is
not intended to permit disclosure of any other information including, without
limitation, (w) any portion of any materials to the extent not related to the
tax treatment or tax structure of the transactions contemplated under this
Agreement, (x) the identities of participants or potential participants in the
transactions contemplated under this Agreement, (y) the existence or status of
any negotiations, (iv) any pricing or financial information (except to the
extent such pricing or financial information is related to the tax treatment or
tax structure of the transactions contemplated under this Agreement), or (z) any
other term or detail not relevant to the tax treatment or the tax structure of
the transactions contemplated under this Agreement..

            (d) To the extent that the Provider receives or has access to
confidential information of the Company's policyholders or claimants, the
Provider will implement and maintain reasonably appropriate measures designed to
meet the following objectives: (i) to ensure the security and confidentiality of
such information; (ii) to protect against any anticipated threats or hazards to
the security or integrity of such information; and (iii) to protect against the
unauthorized access or use of such information. These measures shall include,
but not be limited to, the maintenance of appropriate safeguards to restrict the
access to such information to those employees, agents, or service providers of
the Provider who need that information to carry out the purposes for which the
information was disclosed.

            (e) For information disclosed to the Provider in electronic form,
the Provider agrees that it will maintain "firewalls" or similar barriers and
password-protected access to the Information.

         4.2 Ownership of Data. All data, records, files and any other
information created by the Provider solely for the use of the Company in the
provision of any Service hereunder shall be deemed to belong to, and be owned
by, the Company.

         4.3 Provider's Intellectual Property. The Company acknowledges that all
right, title and interest in and to all Intellectual Property owned by the
Provider and used in providing the Services hereunder shall at all times remain
with and be owned by the Provider.

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SECTION 5. FEES AND CHARGES.

         The fee for the Services provided by the Provider to the Company
pursuant to this Agreement shall be as follows: (i) with respect to each
Service, the fees set forth across from such Service on Schedule A attached
hereto, (ii) the gross amount of any present or future sales, use, excise,
occupation, privilege, value-added, gross-receipts or other similar tax
applicable to the fee, sale or furnishing of any Service, and (iii) all
out-of-pocket expenses (e.g., courier, shipping, document reproduction, postage,
long-distance telephone charges, travel and living expenses for traveling
personnel, and charges for any non-routine supplies and equipment) actually
incurred in connection with the performance of any Service hereunder.

SECTION 6. INVOICING AND PAYMENT.

         The Company shall pay all amounts payable hereunder within fifteen (15)
days after its receipt of an invoice from the Provider setting forth in
reasonable detail the amount due and payable hereunder. In addition to any other
rights available to it at law or in equity, upon three (3) days Notice to the
Company, the Provider may suspend the provision of any Services for which an
invoice has not been satisfied within the time period prescribed herein until
such invoice has been satisfied. Any payment owing to the Provider pursuant to
this Agreement and not remitted within the time specified will be subject to
interest calculated monthly at an annual rate of interest equal to the prime
rate published by the Wall Street Journal plus two percent from the date such
amount should have been paid through the date paid.

SECTION 7. INDEPENDENCE; DECISIONS AND JUDGMENT.

         7.1 Nature of Relationship. All employees and representatives of the
Provider and its Affiliates will be deemed for purposes of all compensation and
employee benefits to be employees or representatives, as the case may be, of the
Provider and its Affiliates and not employees or representatives of the Company.
In performing Services, such employees and representatives will be under the
direction, control and supervision of the Provider and its Affiliates and not of
the Company, and the Provider will have the sole right to exercise all authority
with respect to the employment (including termination of employment), assignment
and compensation of such employees and representatives. Without limiting the
generality of the foregoing, nothing herein shall be construed as creating the
relationship of employer/employee, partners or joint venturers between the
Provider and its Affiliates, on the one hand, and the Company and its
Affiliates, on the other hand, and nothing herein shall be deemed to make either
party an agent of the other. The Provider shall perform its obligations under
this Agreement as an independent contractor.

         7.2 No Business Judgment; No Professional Services. In performing any
Service hereunder, the Provider shall not be required to make, nor shall the
Provider be responsible for, any management decision or any exercise of business
judgment with respect to the business of

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the Company, including, but not limited to, decisions relating to investments,
accounting practices or legal matters. Notwithstanding anything to the contrary
in this Agreement, in no event shall Provider be required to provide any legal
services, actuarial services or any other services for which any type of
professional license or certificate is required.

SECTION 8. NONEXCLUSIVITY.

         Nothing in this Agreement shall prevent the Provider or its Affiliates
from providing any Service to any other Person.

SECTION 9. TERMINATION.

         9.1 Termination of Entire Agreement. This Agreement shall terminate
only as follows:

            (a) at any time, upon the mutual agreement of the parties hereto;

            (b) by either party, immediately, upon delivery of Notice to the
other party in the event that the other party makes a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against, such
party seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up or reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any law relating to bankruptcy, insolvency or
reorganization;

            (c) by either party, immediately, upon delivery of Notice to the
other party if the other party is materially in default in the performance of
any of its covenants or obligations contained in this Agreement and such default
has not been remedied to the nondefaulting party's reasonable satisfaction
within thirty (30) days after Notice to the defaulting party of such default, or
if such default is not capable of cure within thirty (30) days, if the
defaulting party has not promptly commenced to cure the default within such
thirty (30) day period and is not proceeding diligently to cure the default;

            (d) as to any particular Service, at the expiration of the period of
time set forth opposite such Service on Schedule A attached hereto unless at
least thirty (30) days prior to the expiration of such period the Company
provides a written notice to the Provider stating its intention to renew such
Service, in which case the period of time set forth opposite such Service shall
be renewed and the Provider shall continue to provide such Service to the
Company for such successive period; and

            (e) immediately in the event that the provision of each Service
being provided hereunder has terminated or expired.

         9.2 Termination as to Particular Services or Parts of Services.

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            (a) The parties shall have the right, by mutual agreement, to
terminate this Agreement as to any particular Service.

            (b) At any time following the second anniversary of the date of this
Agreement, the Company shall have the right to terminate this Agreement as to
any particular Service by providing sixty (60) days written notice of such
termination to the Provider.

            (c) Once a termination is effective as to any particular Service,
the Provider shall no longer be required to provide such Service to the Company,
unless the Provider agrees, in writing, to provide such Service.

         9.3 Procedures on Termination. On any termination of this Agreement in
whole or in part, each party will cooperate with the other party as reasonably
necessary to avoid disruption of the ordinary course of the other party's
business. Termination shall not affect the Provider's rights to payment for
Services provided.

         9.4 Effects of Termination. Upon termination of this entire Agreement
becoming effective: (a) the Provider shall not be obligated to provide any
further Services pursuant to this Agreement; and (b) the Company shall
immediately pay to the Provider all amounts owing under this Agreement on the
date of termination.

SECTION 10. DISCLAIMERS OF WARRANTIES AND DAMAGES.

         10.1 DISCLAIMER OF WARRANTIES. THE PROVIDER MAKES NO REPRESENTATIONS OR
WARRANTIES, EITHER EXPRESS OR IMPLIED, THAT THE SERVICES PROVIDED HEREUNDER ARE
OR WILL BE ADEQUATE OR SUFFICIENT (AS TO QUANTITY, QUALITY OR TYPE) TO MEET THE
NEEDS (INCLUDING ANY SPECIFICALLY IDENTIFIED NEEDS) OR OBJECTIVES OF THE
COMPANY, ITS AFFILIATES OR ANY OTHER PERSON WITH RESPECT TO THE CONDUCT OF THE
BUSINESS OF THE COMPANY, ITS AFFILIATES OR SUCH PERSON. EXCEPT AS SET FORTH IN
THIS AGREEMENT, THE SERVICES ARE PROVIDED ON AN "AS-IS" BASIS.

         10.2 DISCLAIMER OF DAMAGES. IN NO EVENT, WHETHER BASED ON CONTRACT,
INDEMNITY, WARRANTY, TORT (INCLUDING WILLFUL AND WANTON MISCONDUCT, RECKLESSNESS
OR NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL EITHER PARTY, ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, MEMBERS,
PARTNERS, STOCKHOLDERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS, BE LIABLE FOR ANY
LOST PROFITS OR ANY SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED
THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE COMPANY SHALL
INDEMNIFY

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THE PROVIDER AND ITS AFFILIATES FOR ANY CONSEQUENTIAL DAMAGES, LOST PROFITS OR
PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THE PROVISION OF THE SERVICES
HEREUNDER BY THE PROVIDER AND ANY OF ITS AFFILIATES TO THE EXTENT RECOVERED
AGAINST THE PROVIDER OR ANY OF ITS AFFILIATES BY A THIRD PARTY AND NOT RESULTING
FROM THE PROVIDER'S OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE FOREGOING
DISCLAIMER SHALL APPLY IRRESPECTIVE OF WHETHER THE POSSIBILITY OF SUCH LOST
PROFITS OR DAMAGES HAD BEEN DISCLOSED IN ADVANCE OR COULD HAVE REASONABLY BEEN
FORESEEN. THE FOREGOING REPRESENTS AN EXPRESS ALLOCATION OF RISK BETWEEN THE
PARTIES.

SECTION 11. INDEMNIFICATION.

         11.1 Indemnification by the Company. Subject to Section 10.2 hereof,
the Company hereby agrees to indemnify and hold harmless the Provider and its
Affiliates, and each of their respective officers, directors, managers, members,
partners, stockholders, employees, agents and subcontractors, to the fullest
extent lawful, from and against any and all Losses and Expenses, to the extent
arising out of or relating to the provision of the Services hereunder by the
Provider and any of its Affiliates; provided, however, that the Company shall
have no obligation to indemnify and hold harmless the Provider or any of its
Affiliates in respect of Losses or Expenses which arise out of the gross
negligence or willful misconduct of the Provider.

         11.2 Indemnification by the Provider. Subject to Sections 10.1 and 10.2
hereof, the Provider hereby agrees to indemnify and hold harmless the Company,
and its officers, directors, managers, members, partners, stockholders,
employees, agents and subcontractors, to the fullest extent lawful, from and
against Losses and Expenses incurred by the Company to the extent arising out of
or relating to the Provider's gross negligence or willful misconduct in the
provision of the Services hereunder; provided, however, that the Provider shall
have no obligation to indemnify and hold harmless the Company in respect of
Losses or Expenses to the extent arising out of the gross negligence or willful
misconduct of the Company.

SECTION 12. GENERAL PROVISIONS.

         12.1 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered when
delivered personally or when sent by registered or certified mail or by
facsimile or private courier addressed as follows:

                  If to the Company, to:

                           Kemper Employers Insurance Company
                           c/o SeaBright Insurance Holdings, Inc.
                           2101 4th Avenue, Suite 1600
                           Seattle, Washington  98121
                           Attn: President
                           Facsimile: 206-448-4442

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                  with a copy to:

                           Kirkland & Ellis LLP
                           200 East Randolph Drive
                           Chicago, Illinois 60601
                           Attention: Ted H. Zook, P.C.
                                      Stephen D. Oetgen
                           Facsimile: (415) 439-1314

                  If to the Provider, to:

                           Eagle Pacific Insurance Company
                           2101 Fourth Avenue, Suite 1700
                           Seattle, Washington 98121
                           Attention: President
                           Facsimile: (206) 448-6304

                  With concurrent copies to:

                           Lumbermens Mutual Casualty Company
                           1 Kemper Drive
                           Long Grove, IL  60049
                           Attention: General Counsel
                           Facsimile: (847) 320-4202

                           and

                           Sidley Austin Brown & Wood LLP
                           10 South Dearborn Street
                           Chicago, IL 60603
                           Attention: Robert L. Verigan
                           Facsimile: (312) 853-7036

or to such other address or facsimile number as such party may indicate by a
notice delivered to the other parties hereto.

         12.2 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of, and shall be enforceable by the parties hereto, but
shall not be assignable by any party hereto; provided that the Provider shall be
entitled to assign the Agreements to any of its Affiliates or a purchaser of all
or substantially all of its assets, and the Company hereby approves

<PAGE>

and consents to such assignment; provided further that no assignment shall
relieve the assigning party of its obligations hereunder.

         12.3 Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and may not be
amended or modified except by an instrument in writing signed by the parties to
be bound thereby. Waiver of any term or condition of this Agreement shall only
be effective if in writing and shall not be construed as a waiver of any
subsequent breach or waiver of the same term or condition, or a waiver of any
other term or condition of this Agreement.

         12.4 Counterparts. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.

         12.5 No Third Party Beneficiaries. Nothing herein expressed or implied
is intended to confer upon any person, other than the parties hereto or their
respective permitted assigns, successors, heirs and legal representatives, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.

         12.6 Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Illinois. The parties hereto hereby irrevocably submit in any suit, action or
proceeding arising out of or related to this Agreement or any of the
transactions contemplated hereby to the jurisdiction of any state or federal
court in the State of Illinois and waive any and all objections to jurisdiction
that they may have under the laws of the State of Illinois or the United States.

         12.7 Waivers. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party or parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The failure
of any party hereto to enforce at any time any provision of this Agreement shall
not be construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.

         12.8 Partial Invalidity. Wherever possible, each provision hereof shall
be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of

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such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.

         12.9 Force Majeure. In the event that either party to this Agreement is
unable to perform its obligations under the terms of this Agreement because of
acts of God, strikes, equipment or damage reasonably beyond its control, or
other cause reasonably beyond its control, such party shall not be liable for
damages to the other party to the extent that any unforeseeable damages result
from such failure to perform or otherwise from such causes. Performance under
this Agreement shall resume when the affected party is able to perform
substantially that party's duties. In no event shall the provisions of this
Section 12.9 apply to any monetary obligations under this Agreement.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
                            SIGNATURE PAGE FOLLOWS.]

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                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed by their authorized representatives as of the Effective Date.

                         KEMPER EMPLOYERS INSURANCE COMPANY

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

                         LUMBERMENS MUTUAL CASUALTY COMPANY

                         By: /s/ John K. Conway
                             --------------------------------------------------
                          Name: John K. Conway
                          Title: Secretary

              *SIGNATURE PAGE TO ADMINISTRATIVE SERVICES AGREEMENT*<PAGE>

                                                                   EXHIBIT 10.17

                    CLAIMS ADMINISTRATION SERVICES AGREEMENT

This CLAIMS ADMINISTRATION SERVICES AGREEMENT (this "Agreement"), dated as of
September 30, 2003, is entered into by and among Kemper Employers Insurance
Company, an Illinois insurance company ("KEIC"), Eagle Pacific Insurance
Company, a Washington insurance company ("EPIC"), and Pacific Eagle Insurance
Company, a California insurance company ("PEIC"; and together with EPIC,
"EAGLE").

                              W I T N E S S E T H:

      WHEREAS, Insurance Holdings, Inc., a Delaware corporation ("NEWCO"), has
entered into a Purchase Agreement, dated as of July 14, 2003, with Kemper
Employers Group, Inc., a Washington corporation, Lumbermens Mutual Casualty
Company, an Illinois mutual insurance company ("Lumbermens"), EPIC, and PEIC
providing for, among other things, the sale of certain assets of Eagle, and the
acquisition of KEIC by NEWCO (as amended, the "Purchase Agreement"); and

      WHEREAS, the Purchase Agreement provides for, among other things, the
execution as of the date hereof (the "Closing Date") of a claims administration
services agreement between KEIC and EAGLE; and

      NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, the parties hereto agree as follows:

1.    DEFINITIONS

      A.    "90% Target" shall mean an amount equal to 90% of the Estimated
            Expenses Amount.

      B.    "Allocated Loss Adjustment Expense (or ALAE)" shall mean all costs
            and expenses that are chargeable to the investigation, handling,
            adjustment, settlement or defense of any Claim for benefits or
            damages under a Policy and includes but is not limited to:
            applicable rehabilitation coordinators' charges; fees for service of
            process; fees and costs of attorneys; fees for audit of legal bills;
            costs of undercover operatives or detective services; costs of
            appraisals; costs of employing experts for preparation of maps,
            photographs, diagrams, or chemical or physical analysis; the costs
            of other third-party professional advice, opinion or testimony
            concerning Claims; costs of legal transcripts of testimony; costs of
            copies of public records; costs of depositions and court reporters
            or recorded statements; costs of bonds, appeals, pre and
            post-judgment interest; cost of hospital and medical bill audits;
            the cost of any utilization review, peer review, third-party case
            management, preferred provider fees and other third party managed
            care and medical cost containment expenses; autopsy reports and
            other similar third-party charges, fee or costs reasonably
            chargeable to the investigation, negotiation, settlement defense or
            Subrogation of Claims; and all other similar

<PAGE>

            costs, fees and expenses for services related to the investigation,
            handling, adjustment, settlement or defense of any Claim or the
            protection and collection of subrogation rights. ALAE shall not
            include the salaries or wages of KEIC's employees or any costs,
            charges, or expenses incurred by KEIC solely in the provision of
            Claims Services; provided, however, fees for Managed Care Services,
            if any, shall be part of ALAE.

      C.    "Claim" shall mean each and every demand, suit, occurrence or loss,
            actual or alleged, arising out of or in connection with a Policy, or
            any deductible under such Policy, and arising out of a single
            occurrence, including Reported Claims and New Claims (as defined
            herein).

      D.    "Claimant" shall mean a person or entity that has made a Claim
            against a party that is an insured under a Policy or is entitled to
            Claim Services under a Policy.

      E.    "Claim Loss" shall mean any paid loss or other payment that may
            arise under or relate to any Policy, including Allocated Loss
            Adjustment Expense.

      F.    "Claims Files" shall have the meaning specified in Section 6.A.

      G.    "Claims Services" shall have the meaning specified in Section 4 and
            Exhibit A to this Agreement, and includes Managed Care Services and
            Loss Control Services.

      H.    "Conclusion" of a Claim or "Concluded Claim" shall mean the time at
            which (i) such Claim has been fully paid or (ii) a commercially
            reasonable determination is made by KEIC that EAGLE has no further
            liability for such Claim. A Claim which has had a Conclusion of a
            Claim shall be deemed to be concluded unless and until there is a
            Reopening of such Claim.

      I.    "Covered Losses" shall mean losses or other payments resulting from
            Reported Claims and New Claims.

      J.    "EAGLE's Confidential Information" shall mean any and all data and
            information, which relates to EAGLE's, or their respective
            policyholders, claimants or businesses, that is held, acquired or
            accessed by KEIC in connection with this Agreement. Unless otherwise
            required by applicable laws EAGLE's Confidential Information shall
            not include (i) information generally known or publicly available
            through no act of KEIC, (ii) information furnished to KEIC after the
            Closing Date by a third party independent of KEIC's obligations
            under this Agreement, as a matter of right and without restriction,
            or (iii) all information that KEIC acquired pursuant to the Purchase
            Agreement, which information may be used without restriction.

      K.    "Law(s)" shall mean any applicable code, statute, law, directive,
            rule, bulletin, and/or regulation.

      L.    "Loss Adjustment Expense or LAE" shall mean ALAE and ULAE.

                                       2
<PAGE>

      M.    "Managed Care Services" shall mean the services specified in Exhibit
            A to this Agreement.

      N.    "KEIC Confidential Information" shall mean any all data and
            information, which relates to KEIC, or its Vendors, affiliates or
            business that is disclosed to EAGLE in connection with this
            Agreement, including, but not limited to, pricing and cost
            information, standards, practices and procedures (including Best
            Practices), and other proprietary information of KEIC. Unless
            otherwise required by applicable Laws, KEIC Confidential Information
            shall not include (i) information generally known or publicly
            available through no act of EAGLE, or (ii) information furnished to
            EAGLE after the Closing Date by a third party independent of EAGLE's
            obligations under this Agreement, as a matter of right and without
            restriction.

      O.    "New Claims" means those Claims reported after the Closing Date.

      P.    "New Claims Fees" shall have the meaning specified in Section 9.B.

      Q.    "Policy or Policies" shall mean all of the policies or contracts
            issued by the EAGLE in all of the lines of business set forth on
            Exhibit A other than such policies or contracts that prior to the
            date hereof have been handled on the Kemper Companies' Friendly
            Online Claims User System (FOCUS) claim handling system.

      R.    "Pension Claims" shall mean those Claims for workers' compensation
            benefits where a determination has been made that the claimant will
            no longer, for the indefinite future, be able to work.

      S.    "Proprietary Systems" shall mean the technology systems currently
            known as COMPASS and EAGLETRAK software systems and any other
            systems that is used by KEIC to maintain, process and generate data
            and reports concerning claims, and as such systems may be amended,
            changed or substituted with systems performing similar functions and
            being of similar capacity.

      T.    "Publicly Available Information" shall mean any information that
            KEIC or EAGLE have a reasonable basis to believe is lawfully made
            available to the general public from:

            A.    Federal, state or local government records;

            B.    Widely distributed media; or

            C.    Disclosures to the general public that are required to be made
            by federal, state, or local law.

      U.    "Recoveries" shall mean any and all credits, Subrogation, salvage,
            adjustments, reimbursements, overpayments, voided or returned checks
            or other recoveries,

                                       3
<PAGE>

            including second injury funds, contributions or indemnification
            rights which shall be credited to a Policy.

      V.    "Reopening" of a Claim shall mean the reopening of a Claim with
            respect to which previously there had been a determination that such
            Claim had been concluded as defined in "Conclusion" because of (i)
            the receipt of additional ALAE, (ii) the aggravation of an injury
            giving rise to the original Claim, and (iii) a similar subsequent
            development.

      W.    "Reported Claims" shall mean those Claims reported on or before the
            Closing Date.

      X.    "Reported Claims Fee" shall have the meaning specified in Section
            9.A.

      Y.    "Service Fees" shall mean the Reported Claims Fee, the New Claims
            Fee, the Managed Care Service Fees all as set forth on Exhibit B.

      Z.    "Subrogation" shall mean, when KEIC (on behalf of EAGLE) or EAGLE
            issues a payment to the insured or another party, pursuant to the
            Policy, or assumes an obligation which rightfully belongs to a third
            party, the right of KEIC (on behalf of EAGLE) or EAGLE,
            respectively, to look to the responsible third party for repayment
            of all or a portion of such payment on behalf of EAGLE.

      AA.   "Unallocated Loss Adjustment Expense or ULAE" shall mean all
            expenses involved in handling or paying losses not related to a
            particular Claim that is not Allocated Loss Adjustment Expense.

      BB.   "Vendors" shall have the meaning specified in Section 7.

Other capitalized terms used and not defined herein shall have the respective
meanings ascribed to such terms in the Purchase Agreement.

2.    TERM OF AGREEMENT

      This Agreement shall commence on the Closing Date and continue unless
terminated in accordance with Section 3 of this Agreement.

3.    TERMINATION

      A.    This Agreement may be terminated prior to expiration as follows:

            1.    Either party may provide written notice to the other party of
                  the occurrence of a material breach or breaches of a provision
                  of or obligation under this Agreement. Such notice shall set
                  forth full details of the alleged material breach or breaches
                  and suggest a commercially reasonable proposal designed to
                  compensate monetarily the party alleging the breach or
                  otherwise cure the alleged breach or breaches. Within five (5)
                  business days after receipt of such notice, the party
                  receiving the notice shall supply

                                       4
<PAGE>

                  full details of all relevant circumstances surrounding the
                  alleged material breach or breaches and in a commercially
                  reasonably manner, address specifically the proposal of the
                  party alleging the breach or breaches as to monetary
                  compensation or other cure, and at its option put forward a
                  commercially reasonable counter-proposal for monetary
                  compensation or other cure. Within thirty (30) business days
                  thereafter, representatives of the parties shall consult with
                  each other by telephone or in person at times and places to be
                  agreed upon to negotiate a resolution of the alleged material
                  breach or breaches. If successful, the parties shall reduce
                  the resolution of the matter to writing. In the event the
                  parties are not successful, this Agreement may be terminated
                  by the party alleging the breach upon providing a further
                  prior written notice to the other party of termination no less
                  than thirty (30) business days thereafter stating attempts to
                  resolve or cure the alleged material breach or breaches were
                  unsuccessful.

            2.    Upon the institution of voluntary or involuntary conservation,
                  rehabilitation or liquidation proceedings, or other
                  receivership proceedings, or the institution of proceedings
                  under the U.S. Bankruptcy Code or otherwise, by or against
                  EPIC or PEIC or their corporate parent, KEIC may, following a
                  written notice to EPIC and PEIC, terminate this Agreement
                  effective on a date at least sixty (60) days after the written
                  notice is received by EPIC and PEIC.

            3.    Upon the institution of voluntary or involuntary conservation,
                  rehabilitation or liquidation proceedings, or other
                  receivership proceedings, or the institution of proceedings
                  under the U.S. Bankruptcy Code or otherwise, by or against
                  KEIC, EAGLE may, following a written notice to KEIC, terminate
                  this Agreement effective on a date at least sixty (60) days
                  after the written notice is received by KEIC.

      B.    Upon termination of this Agreement, KEIC shall, at EAGLE's cost and
            expense, assist EAGLE in the transition of Claim Services to EAGLE
            or EAGLE's designated subsequent provider of Claims Services. After
            KEIC ceases to provide Claims Services or at any other time upon
            request of EAGLE, KEIC shall forward, at EAGLE's cost and expense,
            to EAGLE, copies of any Claims Files and other documents,
            information (including Confidential Information) or other property
            owned by EAGLE, whether maintained as hard copies, imaged or
            electronically stored on CD-ROM, or as archived data files on fixed
            or moveable media.

      C.    SURVIVAL

            Sections 3.B, 3.C, 4.B, 4.C, 5, 6, 8, 11, 13 and 14 of this
            Agreement shall survive the expiration or termination of this
            Agreement and expiration or termination shall have no effect upon
            the rights and obligations of the parties arising out of any
            transactions occurring prior to the date of expiration or
            termination.

                                       5
<PAGE>

4.    CLAIM SERVICES

      A.    Agreement to Provide Claims Services. Subject to the terms and
            conditions set forth in this Agreement and in accordance with
            Exhibit A, each of EPIC and PEIC hereby engages KEIC to provide
            Claims Services for the Claims until Conclusion of a Claim,
            including any Reopening of a Claim, and KEIC hereby agrees to
            provide such Claims Services.

      B.    Standard of Care. In the exercise of KEIC's performance of Claims
            Services under this Agreement, KEIC shall discharge its duties with
            the care, skill, prudence, and diligence reasonably expected of a
            person acting in a similar capacity; provided, however, that KEIC
            shall not be liable for any mistake of judgment made in good faith,
            unless said mistake of judgment departs from the aforementioned
            standard of care. For the purposes of determining KEIC's compliance
            with the standard of care, KEIC shall be deemed in compliance if
            KEIC achieves the Best Practices substantially in the form set forth
            in Schedule 1. If at any time EAGLE believes that, when viewed in
            the aggregate, KEIC is not in general compliance with the standard
            of care, EAGLE may so notify KEIC and, if KEIC has not achieved such
            general compliance within ninety (90) days after such notice, EAGLE
            may terminate this Agreement for material breach of this Agreement
            in accordance with Section 3.A.1 of this Agreement.

      C.    Assumption of Control. Notwithstanding anything to the contrary in
            this Agreement, EAGLE has the right, at any time and at its sole
            option, to assume control over the administration and handling of a
            particular Claim; provided that EAGLE may not use the provision of
            this Section 4.C. to frustrate the termination provisions of this
            Agreement. In the event EAGLE assumes control over the
            administration or handling of a particular Claim, KEIC shall have no
            further responsibility for such Claim.

      D.    Integrated Program. The Claims Services, Managed Care Services
            provided herein are part of an integrated program. EAGLE agrees that
            as long as KEIC is to provide Claim Services under this Agreement,
            EAGLE shall also retain KEIC to provide Managed Care Services, with
            respect to Claims for which KEIC is providing Claims Services, in
            accordance with the terms of this Agreement.

      E.    Staffing.

            1.    To the extent reasonable in view of the availability of staff
                  and the volume of Claims generated, KEIC will maintain staff
                  primarily focused on each line of insurance of business
                  served; provided that, if at any location there is not
                  sufficient claim volume to keep staff at such location fully
                  dedicated to such line of business, then KEIC may utilize such
                  staff to service other customer claims. KEIC has separately
                  provided to EAGLE a list of the senior supervisors and senior
                  claims examiners, or their equivalent, dedicated to such lines
                  of business. KEIC shall exercise commercially reasonable
                  efforts to maintain staff of comparable skill and expertise to
                  its

                                       6
<PAGE>

                  staff that exists at the Closing Date. Claims Services
                  staffing will be reviewed semi-annually by KEIC and EAGLE to
                  discuss, among other things, any unsatisfactory performance of
                  specific employees. EAGLE will provide KEIC with thirty (30)
                  days notice that the performance of such employee is
                  unsatisfactory, and, if upon the expiration of a sixty (60)
                  day period following the date which the notice was received by
                  KEIC the performance of such employee has not improved and has
                  not become satisfactory to EAGLE, KEIC will be required to
                  transfer such employee from EAGLE Claims Services at KEIC's
                  expense. Final authority and control over the hiring of
                  additional or replacement staff resides with KEIC.

            2.    KEIC agrees that it will, and will cause its affiliates to,
                  give EAGLE advance notice of any significant reduction in
                  force or office consolidation proposed to be made with respect
                  to those offices servicing the Claims, in order that EAGLE or
                  its affiliate(s) or assignees will have a reasonable
                  opportunity, if so inclined, to make employment offers to such
                  individuals.

5.    LOSS FUND AND DISBURSEMENT ACCOUNTS

                  (a) KEIC shall establish or maintain a separate bank account
                  (or accounts as required by law) at a federally chartered bank
                  mutually acceptable to KEIC and EAGLE (the "Disbursement
                  Account") for the payment of Claims and Allocated Loss
                  Adjustment Expenses on behalf of EAGLE. The Disbursement
                  Account shall be set up as a zero balance account drawing
                  monies to fund all Loss and Allocated Loss Adjustment Expense
                  payments from a corresponding operating account established by
                  and in the name of EAGLE (the "Loss Fund Account") at each
                  bank where KEIC establishes a Disbursement Account. KEIC is
                  authorized to issue drafts in the name of EAGLE on the
                  Disbursement Account in accordance with the terms of this
                  Agreement.

                  (b) In the event there are insufficient funds in the Loss Fund
                  Account to cover drafts issued by KEIC from the Disbursement
                  Account, for whatever reason, KEIC may immediately suspend its
                  performance under this Agreement until the Loss Fund Account
                  is replenished to cover all outstanding drafts and those
                  reasonably anticipated to be issued within the next two (2)
                  business days. Any costs and liabilities, including but not
                  limited to regulatory fines and penalties and banking charges
                  incurred due to the failure of EAGLE to timely fund the Loss
                  Fund Account shall be borne and paid by the EAGLE.

                  (c) KEIC shall prepare a monthly reconciliation report for the
                  Disbursement Account showing all disbursements by EAGLE from
                  the Disbursement Account for the month. Such report will be
                  made available to EAGLE within fifteen (15) days following the
                  end of each month. The reconciliation report shall include:
                  (i) disbursement register, including the

                                       7
<PAGE>

                  time period at the register, policy number, claim number, date
                  of loss, payment date, payment account and payment basis
                  (indemnity, medical, or ALAE) and (ii) any Recoveries. Any
                  Recoveries received by KEIC that are not properly netted
                  against obligations shall be deposited in a separate account
                  established by EAGLE at Harris Bank, N.A or such other bank as
                  identified by EAGLE.

6.    CLAIMS FILES

      A.    Maintenance of Claims Files. KEIC shall maintain and keep true and
            complete copies of all material records relating to Claims and the
            Claims Services provided hereunder in connection therewith, all
            transactions and correspondence with insureds, Claimants, agents,
            brokers, attorneys, adjusters, investigators, EAGLE and any other
            person or entity regarding Claims administered pursuant to this
            Agreement, whether maintained in either physical or electronic form,
            all reserving and financial information, and any other information
            maintained or collected by KEIC relating to claims (the "Claims
            Files").

      B.    Ownership. EAGLE shall own all of its Claims Files (physical or
            other) and all data contained therein and all other files, data,
            information, documents, and information relating to Claims in their
            physical form, and also electronic versions of the foregoing. All
            Claims Files created by KEIC or its Vendors or changes,
            modifications, and additions made to such Claims Files by KEIC or
            its Vendors solely in providing the Claim Services hereunder shall
            be owned by EAGLE as work for hire. If for any reason such Claims
            Files are not owned by EAGLE, KEIC hereby assigns all right, title
            and interest therein to EAGLE.

      C.    Security. KEIC shall maintain commercially reasonable security
            procedures and policies (including all required by Law) designed to
            protect Claims Files against unauthorized use, access or disclosure.
            KEIC shall limit access to such Claims Files to those employees of
            EAGLE, Insureds or their brokers or reinsurer as designated to KEIC
            by EAGLE from time to time, and to those employees of KEIC and
            Vendors who are required to have such access to perform the Claims
            Services hereunder.

      D.    Access. EAGLE shall at all reasonable times, with reasonable advance
            notice to KEIC, be entitled to access and make copies of its Claims
            Files, including Claims Files at the site where KEIC's Disaster
            Recovery Plan (as hereinafter defined) stores back up copies of all
            such Claims Files.

      E.    Site of Claims Files. KEIC shall maintain (i) all physical Claims
            Files in each office where such file is managed and (ii) all
            electronic Claims Files in a secure database for which KEIC has
            responsibility.

      F.    Back up, Disaster and System Recovery. KEIC shall on no less
            frequently than weekly back up its systems for storage at its
            off-site disaster recovery storage site. KEIC has provided to EAGLE
            a copy of its current back up, disaster and system

                                       8
<PAGE>

            recovery procedures and plan (the "Disaster Recovery Plan"). KEIC
            shall use commercially reasonable efforts to comply with the
            Disaster Recovery Plan. In addition, if KEIC makes any changes to
            its Disaster Recovery Plan, it shall notify EAGLE in writing within
            five (5) days after such change occurs.

      G.    Privacy. KEIC shall comply with all applicable privacy Laws that
            govern information contained within the Claims Files.

      H.    Record Storage Retention. KEIC shall maintain Claims Files in
            accordance with written policy and procedures and in compliance with
            Law in all material respects. After Conclusion of a Claim, files
            will be stored for three (3) years by KEIC at the cost of KEIC and
            thereafter in accordance with the written directions provided to
            KEIC from EAGLE as to the disposition of such Claims Files at the
            cost of EAGLE.

      I.    Right to Audit. EAGLE or its designee(s) shall have the right to
            perform on-site audits of the books and records pertaining to the
            Claims at reasonable intervals and duration, upon reasonable notice
            and during customary business hours during the term of this
            Agreement. EAGLE agrees that such audits shall be undertaken to
            minimize the disruption to KEIC's operations. The right to audit
            shall be unlimited; provided, however, that the cost incurred by
            KEIC for the audits (other than audits requested by clients and the
            state financial examination in excess of two (2) per year per
            location) shall be borne by EAGLE; further provided, however, that
            if such third audit is a corrective action-based audit, following a
            prior audit, EAGLE shall not be responsible for the costs incurred
            by KEIC. KEIC agrees to make Claims Files and all other relevant
            information available to EAGLE, its designee(s), its clients, its
            investors and lenders and any regulatory authority at the relevant
            KEIC's facility.

      J.    Insurance. KEIC is required to maintain in full force and effect
            during the term of this Agreement, and thereafter as long as KEIC
            has any obligations hereunder, a policy or policies of the types of
            insurance set forth below (with aggregate limits of at least the
            amounts set forth below), covering KEIC and its subsidiaries and
            each of their employees, directors, officers and agents which are
            issued by Underwriters at Lloyd's of London or an insurer rated no
            less than "B+" by A. M. Best Company. KEIC shall use its
            commercially reasonable efforts to obtain such coverage from an
            insurer rated "A-" or higher by A.M. Best Company.

<TABLE>
<CAPTION>
             Type                                      Amount
             ----                                      ------
<S>                                           <C>
Errors and Omissions                          $3,000,000/3,000,000 each
                                              claim/aggregate

Commercial General Liability                  $1,000,000 combined single limit
(includes personal injury, advertising        per occurrence
liability, premises operations,
</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>
             Type                                      Amount
             ----                                      ------
<S>                                           <C>
completed operations and blanket
contractual)

Fidelity                                      $3,000,000/3,000,000 each
                                              claim/aggregate

Automobile Liability
(includes owned, hired and non-owned          $1,000,000 combined single limit
automobiles)                                  per occurrence

Workers Compensation
Required by Law                               statutory amount

Employers Liability                           $1,000,000

Umbrella Coverage                             $10,000,000 per
                                              occurrence/aggregate
</TABLE>

            Such insurance shall be maintained by KEIC at its sole cost and
            expense and shall be primary and noncontributing coverage over any
            valid and collectible insurance available to EAGLE. Such coverage
            shall be continuously maintained throughout the term of this
            Agreement, and if a "claims made" policy or policies, shall provide
            for retroactive coverage sufficient to cover all of the Claim
            Services for five (5) years after this Agreement is terminated. KEIC
            shall require its insurer to provide a certificate of insurance to
            EAGLE at Closing and upon any policy renewal thereafter, which
            certificate provides that such insurer will notify EAGLE in writing
            within ten (10) days of lapse, material changes, or receipt of a
            notice terminating coverage. KEIC further agrees to notify EAGLE of
            any claim brought under such policy which arises out of or is
            connected with the Claim Services provided hereunder. EAGLE and its
            affiliates for the benefit of itself and its entities and their
            respective directors, officers, employees, representatives and
            agents shall be named as additional insureds with respect to KEIC's
            commercial general liability, automobile liability and umbrella
            liability insurance. If KEIC elects to self-insure any of the
            insurance required herein, then the self-insured shall be considered
            an insurance carrier for the purposes of this provision. Each
            self-insured retention(s) and/or deductible(s) shall be treated as
            though they were recoverable under the required insurance.

7.    VENDORS

      In providing Claims Services, KEIC may use subcontractors, service
providers, counsel, claims investigators, appraisers, structured settlement
brokers or surveillance firms (each a "Vendor"). Notwithstanding any other
provision of this Agreement to the contrary, EAGLE shall have the right (subject
to its responsibility for the incremental costs and expenses of KEIC

                                       10
<PAGE>

resulting from no longer being able to use such Vendor) in its sole discretion
to instruct KEIC in writing to discontinue the use of any Vendor engaged to
assist with Claims. In the event that EAGLE exercises its right under the
immediately preceding sentence, KEIC shall abide by such decision as soon as
reasonably practicable. EAGLE may instruct KEIC in writing to use Vendors for
any specific Claim or Claims; provided, that in such event EAGLE shall be
responsible for the selection of such Vendor and any incremental costs and
expenses incurred by KEIC in engaging and maintaining such replacement vendor.
Notwithstanding the preceding sentences of this Section 7, KEIC shall provide
Managed Care Services through its own personnel and the Vendors, including
independent medical examiners of KEIC's choosing for medical loss containment
services or provision of independent medical examination. KEIC shall remain
liable to EAGLE for the performance of KEIC's obligations under this Agreement
that are subcontracted to any agents or subcontractors, other than with respect
to services that are provided to EAGLE by Vendors retained by KEIC on EAGLE's
behalf.

8.    CONFIDENTIALITY, NONDISCLOSURE AND PRIVACY

      A.    EAGLE's Confidential Information

            1.    KEIC shall use commercially reasonable efforts to maintain the
                  confidentiality of all EAGLE's Confidential Information
                  supplied to, or obtained or used by KEIC in the performance of
                  Claim Services. KEIC shall not disclose such confidential
                  information without the prior written consent of EAGLE.

            2.    Notwithstanding any other provision hereof, KEIC will not use
                  or disclose any of EAGLE's Confidential Information it
                  receives from or on behalf of EAGLE or has access to for
                  purposes other than those: (a) necessary to carry out the
                  services required to be provided under this Agreement; and (b)
                  permitted or required under the Gramm-Leach-Bliley Act or any
                  other applicable Federal or state law or regulation, or (c)
                  related to the tax treatment and tax structure of the
                  transactions contemplated under this Agreement, including all
                  materials of any kind (including opinions or other tax
                  analyses); provided that the authorization in the foregoing
                  clause (c) is not intended to permit disclosure of any other
                  information including, without limitation, (w) any portion of
                  any materials to the extent not related to the tax treatment
                  or tax structure of the transactions contemplated under this
                  Agreement, (x) the identities of participants or potential
                  participants in the transactions contemplated under this
                  Agreement, (y) the existence or status of any negotiations,
                  (iv) any pricing or financial information (except to the
                  extent such pricing or financial information is related to the
                  tax treatment or tax structure of the transactions
                  contemplated under this Agreement), or (z) any other term or
                  detail not relevant to the tax treatment or the tax structure
                  of the transactions contemplated under this Agreement. Without
                  limiting the foregoing, KEIC shall be prohibited from selling
                  EAGLE's Confidential Information.

                                       11
<PAGE>

            3.    To the extent that KEIC receives or has access to confidential
                  information of EAGLE's policyholders or claimants, KEIC will
                  implement and maintain reasonably appropriate measures
                  designed to meet the following objectives: (i) to ensure the
                  security and confidentiality of such information; (ii) to
                  protect against any anticipated threats or hazards to the
                  security or integrity of such information; and (iii) to
                  protect against the unauthorized access or use of such
                  information. These measures shall include, but not be limited
                  to, the maintenance of appropriate safeguards to restrict the
                  access to EAGLE's Confidential Information to those employees,
                  agents, or service providers of KEIC who need that information
                  to carry out the purposes for which the information was
                  disclosed. For information disclosed to KEIC in electronic
                  form, KEIC agrees that it will maintain "firewalls" or similar
                  barriers and password-protected access to EAGLE's Confidential
                  Information.

      B.    KEIC Confidential Information

            1.    EAGLE shall maintain the confidentiality of all KEIC
                  Confidential Information supplied to, or obtained or used by
                  EAGLE in connection with the receipt of services under this
                  Agreement. EAGLE shall not disclose KEIC Confidential
                  Information without the prior written consent of KEIC.

            2.    Notwithstanding any other provision hereof, EAGLE will not use
                  or disclose any Confidential Information they receive from or
                  on behalf of KEIC or have access to for purposes other than
                  those permitted or required under the Gramm-Leach-Bliley Act
                  or any other applicable Federal or state law or regulation.
                  Without limiting the foregoing, EAGLE shall be prohibited from
                  selling the Confidential Information they receive from or on
                  behalf of KEIC.

            3.    To the extent EAGLE receives or has access to KEIC
                  Confidential Information, EAGLE will implement and maintain
                  appropriate measures designed to meet the following
                  objectives: (i) to ensure the security and confidentiality of
                  such information; (ii) to protect against any anticipated
                  threats or hazards to the security or integrity of such
                  information; and (iii) to protect against the unauthorized
                  access or use of such information. These measures shall
                  include, but not be limited to, the maintenance of appropriate
                  safeguards to restrict the access to the KEIC Confidential
                  Information to those employees, agents, or service providers
                  of EAGLE who need that information to carry out the purposes
                  for which the information was disclosed. For information
                  disclosed to EAGLE in electronic form, EAGLE agrees that it
                  will maintain "firewalls" or similar barriers and
                  password-protected access to KEIC Confidential Information.

                                       12
<PAGE>

9.    FEES AND COMPENSATION

      A.    Reported Claims Fee. In connection with the Reported Claims, EAGLE
            shall pay KEIC, over time and from time to time, the fees and
            expenses set forth in the attached Exhibit B plus any additional
            sales, services, value added or similar taxes where applicable, if
            any, to the extent that any such taxes are newly imposed after the
            date of this Agreement or for which there is a rate increase after
            the date of this Agreement (the "Reported Claims Fee"). Such fees
            and expenses shall be paid by EPIC and PEIC, severally, and not
            jointly, monthly in arrears thirty (30) days after the end of each
            month. KEIC shall provide EPIC and PEIC monthly invoices in a
            mutually acceptable format no later than the tenth (10) day
            following each month.

      B.    New Claims Fees. In connection with New Claims, EAGLE shall pay KEIC
            upon the opening of each New Claim the fees and expenses set forth
            in the attached Exhibit B plus any additional sales, services, value
            added or similar taxes where applicable, if any, to the extent that
            any such taxes are newly imposed after the date of this Agreement or
            for which there is a rate increase after the date of this Agreement
            (the "New Claims Fee"). Such fees and expenses shall be paid by EPIC
            and PEIC, severally, and not jointly, monthly in arrears thirty (30)
            days after the end of each month. KEIC shall provide EPIC and PEIC
            monthly invoices in a mutually acceptable format no later than the
            tenth (10) day following each month.

      C.    Managed Care Services Fees. For Managed Care Services provided on
            Reported Claims or New Claims, EAGLE shall each severally and not
            jointly pay KEIC the fees and expenses set forth in the attached
            Exhibit B.

      D.    Late Charges. Late payment charges of one (1) percent per month
            (twelve (12) percent per annum) or the maximum allowed by law,
            whichever is less, shall be charged against any New Claim or Managed
            Care Service fee or expense by the 15th day after payment is
            required from EAGLE. In addition, KEIC shall also have the option to
            suspend services including the making of payments on behalf of
            EAGLE, or to exercise any other rights contained in this Agreement
            including those contained in Section 3, Termination. During any
            period of suspension of services, the terms of this Agreement shall
            remain in effect, except that those sections requiring KEIC to
            provide services are suspended until such time as KEIC agrees to
            resume performance.

10.   INDEMNIFICATION

      A.    Indemnification by EAGLE. EAGLE shall, jointly and severally,
            indemnify, defend and hold KEIC (and any of its parent companies,
            subsidiaries and affiliates, and each of its and their present and
            former officers, directors, agents, employees, successors and
            assigns) (each such person or entity, a "KEIC Indemnified Party")
            harmless from any and all claims, suits, losses, judgments, damages,
            costs, administrative fines, penalties or expenses, including
            reasonable

                                       13
<PAGE>

            attorneys' fees (collectively, "Losses") incurred by one or more
            KEIC Indemnified Parties because of (i) any negligent act or
            omission or crime or civil wrong committed by EAGLE or its employees
            or agents (other than KEIC); or (ii) KEIC's or its agents' or
            employees' negligent acts or omissions or a crime or a civil wrong,
            in each case to the extent caused or committed by KEIC or its agents
            or employees at such EAGLE's direction in connection with Claims
            Services performed or executed under this Agreement. EAGLE, jointly
            and severally, shall also indemnify, defend and hold each of the
            KEIC Indemnified Parties harmless from any and all Losses seeking to
            hold any such KEIC Indemnified Party responsible or liable under any
            policies of insurance or contracts of reinsurance written by EAGLE,
            except to the extent that such Loss relates to the negligence or
            criminal or civil wrongful act or omissions of KEIC (other than
            negligent acts or omissions or criminal or civil wrongs committed by
            KEIC or its agents or employees at EAGLE's direction).

      B.    Indemnification by KEIC. KEIC shall indemnify, defend and hold EAGLE
            (and any of its parent companies, subsidiaries and affiliates, and
            each of its and their present and former officers, directors,
            agents, employees, successors and assigns) (each such person or
            entity, an "EAGLE Indemnified Party") harmless from and against any
            and all Losses incurred by any such EAGLE Indemnified Party because
            of any negligent act or omission or a crime or civil wrong
            (including any violations of unfair claims practices statutes or
            regulations) committed by KEIC or any of its employees or agents;
            provided, however, that KEIC need not provide such indemnity for any
            Losses which result from KEIC's or its agents' or employees'
            negligent acts or omissions or a crime or a civil wrong, in each
            case to the extent caused or committed by KEIC or its agents or
            employees at EAGLE's direction.

      C.    Indemnification Procedures. If any claim is instituted or asserted
            by any third party against any person who is entitled to
            indemnification pursuant to this Agreement, such indemnified party,
            after receipt by it of written notice of the commencement or
            assertion of such claim, shall promptly cause a written notice of
            such claim to be made to the party required to furnish such
            indemnity; provided, that failure to give such notice shall not
            relieve the indemnifying party of its indemnification obligations
            hereunder, unless and to the extent such failure to provide notice
            shall have materially and substantially prejudiced the rights of the
            indemnifying party. Failure to give such notice shall not result in
            any liability of the indemnified party to the indemnifying party.
            Following any such notification, the indemnifying party and
            indemnified party shall have the same respective rights and
            obligations (subject to all of the same terms and conditions set
            forth in Section 11.5 of the Purchase Agreement) with respect to the
            defense of such claim as are set forth in Section 11.5 of the
            Purchase Agreement.

11.   NOTICES

      Except as otherwise set forth herein, any notice required under this
Agreement must be in writing and either sent by first class mail, facsimile,
certified mail, return receipt requested,

                                       14
<PAGE>

nationally recognized courier service that maintains delivery records, or
personally delivered. Notice shall be effective five (5) days after the date of
mailing or upon receipt, whichever is earlier. Unless changed, the addresses of
the respective parties are:

Notices shall be sent to:

FOR KEIC:                                 FOR EAGLE:

Kemper Employers Insurance Company        Eagle c/o Lumbermens Mutual Casualty
                                          Company

c/o SeaBright Insurance Company
2101 4th Avenue                           1 Kemper Drive
Suite 1600                                Long Grove, IL  60049
Seattle, Washington  98121
Attention: President                      Attention: General Counsel

Fax: 206-448-4442                         Fax: 847-320-4202

or any other person or address of which notice has been provided in accordance
with this Section 11.

12.   GENERAL PROVISIONS

      A.    Entire Agreement. This Agreement, including the Exhibits and
            Schedules hereto, sets forth the entire agreement and understanding
            between the parties and merges and supersedes all prior discussions,
            agreements (including any existing intercompany agreements between
            the parties) and understandings of every kind and nature among them
            as to the subject matter hereof, and no party shall be bound by any
            condition, definition, warranty or representation other than as
            expressly provided for in this Agreement or as may be on a date on
            or subsequent to the date hereof duly set forth in writing signed by
            each party which is to be bound thereby. Unless otherwise expressly
            defined, terms defined in this Agreement shall have the same
            meanings when used in any Exhibit or Schedule and terms defined in
            any Exhibit or Schedule shall have the same meanings when used in
            this Agreement or in any other Exhibit or Schedule. This Agreement
            (including the Exhibits and Schedules hereto) shall not be changed,
            modified or amended except by a writing signed by each party to be
            charged and this Agreement may not be discharged except by
            performance in accordance with its terms or by a writing signed by
            each party to be charged.

      B.    Governing Law. This agreement and its validity, construction and
            performance shall be governed in all respects by the laws of the
            State of Illinois, without giving effect to principles of conflicts
            of law.

      C.    Benefit of Parties; Assignment. This Agreement shall be binding upon
            and shall inure to the benefit of the parties hereto and their
            respective successors (statutory, legal or otherwise) and permitted
            assigns. This Agreement may not be assigned

                                       15
<PAGE>

            by either party without the prior written consent of the other
            party. Nothing herein contained shall confer or is intended to
            confer on any third party or entity which is not a party to this
            Agreement any rights under this Agreement.

      D.    Severability of Contract Provision. If any provisions of this
            Agreement shall be invalid under the laws of the United States or
            any state in which the Agreement is being interpreted, such
            provisions will not invalidate the whole Agreement, but the
            Agreement shall be construed as if not containing the particular
            provision or provisions held to be invalid.

      E.    Remedies Not Exclusive. No remedy set forth in this Agreement is
            exclusive of any other remedy but shall be in addition to every
            other remedy given under this Agreement or existing now or hereafter
            at law or equity.

      F.    Independent Contractors. The parties shall not be deemed partners,
            joint ventures or governed by any legal relationship other than as
            independent contractors.

      G.    Headings. Headings are for convenience only and are of no effect in
            construing this Agreement.

      H.    Third Parties. This Agreement is not intended and shall not be
            deemed to give any right or remedy to any third party whatsoever
            (other than the KEIC Indemnified Parties and the EAGLE Indemnified
            Parties) unless said right or remedy is specifically granted to such
            third party by the terms hereof.

      I.    Force Majeure. If by reason of acts of God, winds, fires, epidemics,
            landslides, floods, droughts, famines, acts of public enemies, acts
            or orders of any kind of any governmental authority, insurrection,
            military action, war, whether or not declared, acts of terrorism,
            sabotage, riots, civil disturbances, explosions or partial or entire
            failure of utilities, any party to this Agreement is unable in whole
            or in part to carry out its duties and obligations (other than any
            monetary obligation or requirement to pay money), upon delivery of a
            notice of such force majeure event to the other parties to this
            Agreement, such party shall not be deemed to be in default during
            the continuance of such inability, notwithstanding any provision in
            this Agreement to the contrary. Such party shall, however, use its
            reasonable efforts to remedy with all reasonable dispatch the cause
            or causes preventing such party from carrying out its duties and
            obligations hereunder. The other parties to this Agreement may
            terminate this Agreement immediately upon notice if, notwithstanding
            the force majeure event, the party asserting force majeure has not
            resumed carrying out its duties and obligations in full within
            twenty (20) business days from the occurrence of the force majeure
            event.

      J.    Nonwaiver of Contract Provisions. The failure of any of the parties
            to insist, in any one or more instances, upon a strict performance
            of any of the provisions of this Agreement or to exercise any option
            herein contained, shall not be construed as a waiver or
            relinquishment for the future of such provision, but the same shall
            continue and remain in full force and effect.

                                       16
<PAGE>

      K.    Time of Performance. Subject to Section 12.I. above, KEIC recognizes
            that failure to timely meet the provision of services set forth
            under this Agreement may provide a basis for termination of this
            Agreement by EAGLE as a material breach under Section 3.A.1 of this
            Agreement. EAGLE acknowledge that KEIC's performance of its duties
            and obligations under this Agreement is dependent upon the
            cooperation of EAGLE. To the extent that the failure of EAGLE to
            furnish KEIC with the resources, information and responses required
            under this Agreement prevents KEIC from fulfilling its obligations
            under this Agreement, KEIC shall not be considered in breach,
            material or otherwise, of this Agreement.

      L.    Counterparts. This Agreement may be executed in two or more
            counterparts, each of which shall be deemed an original and all of
            which together shall constitute one and the same instrument.

      M.    DISCLAIMER OF WARRANTIES. EXCEPT FOR THOSE REPRESENTATIONS AND
            WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, KEIC MAKES NO
            OTHER REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED.

      N.    DISCLAIMER OF DAMAGES. IN NO EVENT, WHETHER BASED ON CONTRACT,
            INDEMNITY, WARRANTY, TORT (INCLUDING WILLFUL AND WANTON MISCONDUCT,
            RECKLESSNESS OR NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL
            EITHER PARTY, ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS,
            DIRECTORS, MANAGERS, MEMBERS, PARTNERS, STOCKHOLDERS, EMPLOYEES,
            AGENTS OR SUBCONTRACTORS, BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES,
            LOST PROFITS OR PUNITIVE DAMAGES (OTHER THAN ANY SUCH DAMAGES
            RECOVERED AGAINST THE OTHER PARTY OR ITS AFFILIATES BY A THIRD
            PARTY). THE FOREGOING DISCLAIMER SHALL APPLY IRRESPECTIVE OF WHETHER
            THE POSSIBILITY OF SUCH LOST PROFITS OR DAMAGES HAD BEEN DISCLOSED
            IN ADVANCE OR COULD HAVE REASONABLY BEEN FORESEEN. THE FOREGOING
            REPRESENTS AN EXPRESS ALLOCATION OF RISK BETWEEN THE PARTIES.

      O.    No Business Judgment; No Professional Services. In performing its
            obligations hereunder, KEIC shall not be required to make, nor shall
            the KEIC be responsible for, any management decision or any exercise
            of business judgment with respect to the business of EAGLE,
            including, but not limited to, decisions relating to investments,
            accounting practices or legal matters. Notwithstanding anything to
            the contrary in this Agreement, in no event shall KEIC be required
            to provide any legal services, actuarial services or any other
            services for which any type of professional license or certificate
            is required.

      P.    Compliance with Laws. KEIC shall comply with all material respects
            with applicable federal, state and local Laws. KEIC and its
            employees are and shall

                                       17
<PAGE>

            remain duly licensed to perform its obligations in each jurisdiction
            in which it renders Claim Services.

13.   DISPUTES

      A.    Fee Disputes. In the event EAGLE has a good faith dispute as to any
            fees due and payable to KEIC, EAGLE shall, on or prior to the date
            payment is due and payable, provide KEIC with written notice of the
            nature of the good faith dispute setting forth the specific facts
            and documents forming the basis for the dispute. The parties shall
            use reasonable best efforts to resolve the dispute within fifteen
            (15) days following receipt of EAGLE's notice. If the dispute cannot
            be resolved within such time period, the senior management for each
            party will attempt to resolve the dispute within the succeeding
            thirty (30) days. If such dispute cannot be resolved, all of the
            parties' rights and remedies under this Agreement are applicable.

14.   INTELLECTUAL PROPERTY RIGHTS

      A.    General. The parties agree nothing in this Agreement shall be
            construed to give either party any right, title, or interest in any
            of the other party's proprietary processes (including, but not
            limited to, work flows, policy and procedure manuals, and standard
            operating procedures manuals), software or data system; provided,
            however, that EAGLE shall own, in each case as work for hire any
            changes, additions or modifications to any of EAGLE's property,
            Claims Files or to EAGLE's Confidential Information not acquired by
            Buyer or KEIC pursuant to the Purchase Agreement that are made by
            KEIC (or its affiliates or service providers) in performing the
            Claims Services. In the event that any such changes, additions,
            modifications or work is not work for hire, then KEIC hereby assigns
            (or shall cause its affiliates or their service providers to assign,
            as the case may be), all right, title and interest, including
            copyright, to EAGLE.

      B.    Use of Name. The parties agree not to use each other's name in any
            promotional materials or meetings with third parties, except to the
            extent necessary to identify EAGLE as one of KEIC's customers or to
            identify KEIC as EAGLE's vendor.

15.   PROVISION OF DATA AND REPORTS: ACCESS TO SYSTEMS AND DATA

      A.    Data and Reports. KEIC will provide to EAGLE all data and reports
            related to Claims in the same form, format and frequency as EAGLE
            provides for its own purposes. Such data and reports shall include
            the data and those reports which are generated using or maintained
            in the Proprietary Systems, as well as any other KEIC-utilized claim
            technology. To the extent that KEIC is unable to provide such data
            or reports due to the unavailability of either source systems or
            changes in technology, KEIC will work with EAGLE to identify and
            implement alternative mechanisms for supporting EAGLE's claim data
            needs. In the event either party's technical platform environments
            may necessitate changes in the data transfer mechanisms or report
            productions, the parties shall work together to

                                       18
<PAGE>

            establish appropriate data transfer mechanisms so that EAGLE's
            access to the data and reports continues, with each party to bear
            their respective costs of changes in their own systems.

            (i)   Access. KEIC shall arrange for each of EPIC and PEIC and their
                  designees to have access to the Claims Files and continuing
                  electronic access to the Proprietary Systems in order to
                  enable EAGLE to monitor and extract information about the
                  Claims.

      B.    To the maximum extent permitted by the licenses and agreements to
            which it is a party, KEIC shall also permit EAGLE and its affiliates
            to utilize the Proprietary Systems to access the Claims Files as
            necessary for EAGLE and its affiliates to perform their
            responsibilities under the Purchase Agreement and any other
            agreements executed in connection therewith.

                                    * * * * *

                                       19
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written by persons authorized to act in this regard.

Eagle Pacific Insurance Company, Inc.   Kemper Employers Insurance Company

BY: /s/ William A. Hickey               BY: /s/ John K. Conway
    --------------------------------        --------------------------------

DATE: September 30, 2003                DATE: September 30, 2003

        ----------------------------           -----------------------------
Pacific Eagle Insurance Company, Inc.

BY: /s/ William A. Hickey
    --------------------------------

DATE: September 30, 2003

      ------------------------------

                                       20
<PAGE>

                    CLAIMS ADMINISTRATION SERVICES AGREEMENT

                                    EXHIBITS

A.    Management of Claims

B.    Fee Schedule

                                    SCHEDULES

1     Best Practices

                                       21
<PAGE>

                                                                       EXHIBIT A

                              MANAGEMENT OF CLAIMS

1.    LINES OF BUSINESS

The lines of insurance covered by the Claims Administration Services Agreement
of which this Exhibit A forms a part (the "Agreement") are United States
Longshoremen and Harbor Workers Compensation Act, Jones Act, Federal Employers
Liability Act and Workers Compensation.

CLAIM SERVICES AND MANAGED CARE SERVICES

KEIC will provide all services necessary for the handling of Claims (the "Claims
Services"), including the services set forth below and specifically including
Managed Care Services and will comply with the Claims Servicing Procedures in
Schedule 1. Each Claim will be handled to Conclusion.

      A.    CLAIMS ADMINISTRATION -- GENERAL

            KEIC shall:

            (i)   Assist EAGLE in providing written claim reporting instruction
                  to each of EAGLE's insured's reporting facility(ies) according
                  to the accepted loss reporting procedure.

            (ii)  Acknowledge to EAGLE's insured source of receipt of each claim
                  notice, identifying each with a unique claim number.

            (iii) File state required claim reports and notices as agreed to
                  from time to time by the parties in writing prior thereto;
                  provided that to the extent any such report must be signed by
                  an authorized representative of EAGLE, EAGLE will first
                  provide such signature.

            (iv)  Provide EAGLE with limited access to its Intranet website that
                  will notify EAGLE and KEIC of new and modified account
                  management instructions. If mutually agreeable, KEIC will
                  implement the instructions and supply them on its Intranet
                  website.

            (v)   Examine all reported Claims (including incidents which have
                  been reported but for which no adjustment has been made or no
                  loss reported).

                                       22
<PAGE>

           (vi)   Maintain a master claim file for each reported Claim which
                  shall be reviewable at any and all reasonable times by EAGLE
                  or its designee.

           (vii)  Confirm a coverage on every Claim before accepting coverage.

           (viii) Provide EAGLE, upon request, a clear synopsis of the Claim to
                  include identification of insured, issues of coverage and
                  recommendations, outline of the facts of the loss, evaluation
                  of legal liability, determination of the settlement range, and
                  opportunities for Recoveries.

           (ix)   Establish and continue to adjust, pursuant to EAGLE's
                  standards, reserves for all Claims; provided, however, that
                  KEIC shall not establish an initial reserve for loss and LAE,
                  or change any existing reserve therefor, in an amount greater
                  than that set forth below, without the consent of EAGLE:

                     All:                      $250,000

           (x)    Subject to the limitations contained herein, deny those Claims
                  as to which KEIC believes there is no basis for payment.
                  Investigate, evaluate, adjust and settle to conclusion those
                  Claims EAGLE is legally obligated to pay or which EAGLE
                  advises KEIC it desires to pay, including the necessary
                  preparation for and handling of any Recoveries which may inure
                  to the benefit of the EAGLE.

            (xi)  Perform all reasonably necessary administrative and clerical
                  work in connection with Claims or Claim Services, including
                  but not limited to data entry.

           (xii)  Provide all forms reasonably necessary for the administration
                  of Claims and Claims Services.

           (xiii) Perform all reasonably necessary services to collect
                  Recoveries and properly credit Recoveries to the appropriate
                  Claim File.

           (xiv)  Report all State Insurance Department complaints or inquiries
                  immediately to EPIC or PEIC, as applicable. KEIC shall take
                  the lead with the input of the applicable company in
                  responding to all State Insurance Department complaints or
                  inquiries. KEIC shall maintain a log, by State, of all
                  complaints, which log complies with all applicable Laws, and a
                  copy of which shall be made available to the applicable
                  company.

      B.    CLAIMS INVESTIGATION/PREPARATION

           (i)    KEIC will provide investigation and documentation of
                  information for the purpose of determining coverage, liability
                  and the extent of damages or

                                       23
<PAGE>

                  benefits for each Claim. KEIC will issue reservation of rights
                  letters, but EAGLE must approve all coverage declinations.

            (ii)  KEIC will use outside experts as necessary in the examination
                  and evaluation of a Claim, including any defense. Fees for
                  such experts will be charged as Allocated Loss Adjustment
                  Expense (ALAE).

            (iii) KEIC will investigate and evaluate Recoveries opportunities.
                  KEIC will pursue Recoveries and supervise efforts to collect
                  Subrogation amounts when it reasonably believes Subrogation
                  amounts are recoverable and the expected amount of recovery
                  does not exceed the expected costs of pursuing the
                  Subrogation. EAGLE may direct that some cases may warrant
                  Subrogation.

            (iv)  All applicable claims will be automatically indexed by KEIC
                  with any relevant fraud database including the AISG Index
                  Bureau. EAGLE will license and supply to KEIC access to such
                  fraud bureaus. Each Claim will be periodically re-indexed
                  until the Claim File is closed. If fraud is detected, Claims
                  may be referred to the KEIC Special Investigations Unit. This
                  referral is done at the discretion of KEIC. EAGLE may direct
                  SIU investigations to initiated on a claim.

            (v)   Upon catastrophe loss event, KEIC will provide a CAT response
                  team within 24 hours. During the initial month following the
                  event, KEIC will provide weekly reports identifying the number
                  of claims, projected losses, coverage that is effected, and
                  other agreed information. Unless agreed otherwise, reporting
                  thereafter will be monthly.

      C.    LOSS ADJUSTMENT & SETTLEMENT

            (i)   KEIC will issue checks (incorporating the appropriate EAGLE
                  company's name) from the Disbursement Account funded by EAGLE
                  for such purpose under Section 5 of the Agreement for Covered
                  Losses and ALAE in amounts consistent with the investigation
                  and evaluation of liability and damages. For Covered Losses
                  exceeding those shown in "Settlement Authority" below, KEIC
                  will consult with, and receive the approval of, EAGLE before
                  settlement or payment.

      D.    LITIGATION MANAGEMENT

            (i)   KEIC will maintain a list of independent attorneys acceptable
                  to KEIC. EAGLE shall have the right as specified in Section 7
                  of the Agreement approved by EAGLE. As the need arises, KEIC
                  will arrange for such attorneys to be retained on EAGLE's
                  behalf.

            (ii)  KEIC will direct attorney activity and assist with discovery
                  as well as pre-trial preparation of each case, including
                  continued negotiations and settlement where warranted.

                                       24
<PAGE>

            (iii) KEIC will coordinate and facilitate the exchange of
                  information between EAGLE and attorneys.

            (iv)  KEIC should notify EAGLE sixty (60) days prior to the start of
                  any trial whether or not the Claims is below the required
                  reporting level. In the event sixty (60) days notice is not
                  reasonably possible, KEIC will notify EAGLE as soon as
                  possible after KEIC learns of the start date of the trial. The
                  pre-trial report will be forwarded at least thirty (30) days
                  before the scheduled trial date.

            (v)   KEIC will have defense counsel comply with EAGLE's litigation
                  reporting, billing and bill review guidelines.

      E.    REPORTING REQUIREMENTS

KEIC shall provide reports to EAGLE, in the formats substantially similar to
those currently provided to EAGLE or as otherwise agreed with EAGLE, for:

            (i)   All losses (both indemnity and ALAE) initially reserved at
                  $250,000 or more on which a subsequent reserve changes by
                  $100,000 or more (the "Large Loss Report").

            (ii)  All coverage disputes or declination of coverage.

            (iii) All allegations of bad faith or extra-contractual damages.

            (iv)  All Claims where the incurred reserve is equal to or greater
                  than 50% of policy limits.

            (v)   All Claims involving serious injury exposure without regard to
                  legal liability or policy limit

                  -     Deaths

                  -     Quadriplegia

                  -     Paraplegia

                  -     Burns over 25% of a body

                  -     Coma

                  -     Closed head injuries

                  -     Amputation.

                  -     All bloodborne pathogen Claims (e.g. HIV, Hepatitis)

                                       25
<PAGE>

                   -    Rape or attempted rape

                   -    Loss of vision equal to 80% or usual loss that precludes
                        return to regular job or work.

            (vi)   All declaratory judgment actions.

            (vii)  All refunds, including ALAE, greater than $50,000 should be
                   reported to EAGLE after KEIC receives notice thereof.

            (viii) Mass tort and class actions as requested by EAGLE.

            (ix)   All accidents occurring outside the U.S. or U.S. territorial
                   waters.

            (x)    All Employer Liability Claims.

            (xi)   All Claims where SIU has been consulted and KEIC believes a
                   fraud has been committed.

            (xii)  All Claims where a structured settlement is contemplated.

            (xiii) RSD Claims.

            (xiv)  Pension Claims.

      F.    SETTLEMENT AUTHORITY

KEIC has authority to settle any one claimant (loss and ALAE combined) without
prior approval of EAGLE as set forth next to the lines of insurance below:

            All other lines -- up to $250,000.

For any one loss in excess of the foregoing amounts, KEIC shall secure the prior
approval of EAGLE by e-mail. EAGLE shall respond promptly to any request for
authority to settle under this provision and in all events within five (5)
business days.

      G.    [Intentionally Omitted]

      H.    MEDICAL BILL REVIEW FOR WORKERS COMPENSATION CLAIMS

            (i)   KEIC will audit each worker's compensation medical bill for
                  the purpose of verifying the accuracy and appropriateness of
                  charges.

            (ii)  KEIC will review workers' compensation medical bills using an
                  automated bill review system in all states where an automated
                  bill review system is currently in operation.

                                       26
<PAGE>

            (iii) KEIC shall reduce medical charges to the extent of any
                  duplicative or excess charges and provide an explanation for
                  any reduction and a toll free number to providers.

            (iv)  KEIC will maintain data by provider taxpayer identification
                  and patient social security number and services rendered by
                  treatment and diagnostic code.

            (v)   KEIC shall produce quarterly, or at times otherwise agreed to
                  by the parties in writing, reports on the total amount of
                  duplicative and excess charges identified by KEIC.

            (vi)  Medical Bill Review shall be charged as ALAE on the individual
                  claim file, except where contrary to Applicable Law.

      I.    PREFERRED PROVIDER NETWORK FOR WORKERS COMPENSATION CLAIMS

            (i)   Claim service for workers compensation includes access to a
                  network of medical providers. The Managed Care Fees set forth
                  in Exhibit B to EAGLE for access to the Preferred Provider
                  Network shall be charged as medical loss.

            (ii)  EAGLE shall be provided with on-line and hard copy network
                  directories for referral purposes upon request. EAGLE may
                  request that providers not listed in the directory be invited
                  to become a participating provider. KEIC, at its discretion,
                  may enter into a contractual arrangement with such provider(s)
                  to include them in the Preferred Provider Network.

            (iii) KEIC will provide information designed to inform and educate
                  its employees on the availability and use of the network. The
                  program will cover the referral process, claims submission and
                  payment procedures, dispute resolution, network provider
                  recruitment.

            (iv)  KEIC will provide EAGLE with its standard utilization reports
                  and review them with EAGLE. Reports are produced quarterly or
                  at other times agreed to by the parties in writing. KEIC will
                  work with EAGLE to ensure maximum utilization of network
                  providers.

            (v)   KEIC shall offer EAGLE with Internet access and a toll-free
                  800 number and/or electronic, internet access as a referral
                  service to locate providers within a particular geographic
                  area.

            (vi)  It is specifically understood and agreed that KEIC makes no
                  warranty or assurance concerning the quality of medical care.
                  It is further understood and agreed that all medical
                  practitioners participating in the KEIC Preferred Provider
                  Network are independent contractors for all purposes including
                  liability for any acts or omissions in the treatment of any

                                       27
<PAGE>

                  claimant. KEIC does not interfere with or participate in the
                  provider-patient relationship and all health care decisions
                  are between the patient and provider. The selection of a
                  provider is the decision of the patient and not based on the
                  credentialing or recommendation of KEIC.

      J.    FIELD CASE MANAGEMENT

            (i)   "Field Case Managers" shall mean nurses or vocational
                  rehabilitation consultants who operate locally (on-site) to
                  coordinate and facilitate services to Claimant. Field Case
                  Management shall be provided at KEIC's discretion or according
                  to pre-determined criteria established by the EAGLE. Field
                  Case Managers shall coordinate and manage health care services
                  provided to the Claimant in a timely, cost effective manner,
                  minimizing the recovery period without jeopardizing medical
                  stability. Field Case Managers shall maintain contact with
                  treating provider(s), Claimants and EAGLE. Field Case
                  Management may include medical, vocational and/or serious
                  injury/catastrophic care management services.

            (ii)  Field Case Management provided at KEIC's discretion, shall
                  include coordinating health care services to Claimant,
                  monitoring Claimant's recovery, providing health education to
                  EAGLE, and following up with providers regarding services,
                  length of disability and physical abilities of the Claimant.
                  Field Case Managers may travel to the Claimant's home,
                  provider's office, or work site. Field Case Management may
                  include vocational Field Case Management if deemed appropriate
                  by KEIC to assist Claimant in identifying job-related goals
                  through rehabilitation plans which may include testing for job
                  goals, aptitudes, and transferable skills as well as
                  estimating job placement and earning potential. In addition,
                  if appropriate, KEIC shall provide job search training,
                  placement services and shall conduct labor market surveys to
                  help Claimant identify career opportunities.

            (iii) KEIC shall provide serious injury/catastrophic Field Case
                  Management where deemed appropriate by KEIC within twenty-four
                  (24) hours of a serious injury/catastrophic claim referral. A
                  Field Case Manager shall contact all parties involved and may
                  conduct an on-site evaluation. The Field Case Manager shall
                  assess case requirements, assist in the coordination of
                  referrals and discharge plans, and educate Claimant on
                  injury/illness and health care services.

            (iv)  The parties agree neither EAGLE nor KEIC is responsible for
                  the provision or omission of health care by any provider to
                  claimant. Furthermore, the parties agree KEIC's provision of
                  Field Case Management services does not in any manner
                  interfere with the relationship between the medical providers
                  and a Claimant and all health care decisions are between the
                  medical providers and Claimant.

                                       28
<PAGE>

      K.    PRESCRIPTION DRUG PROGRAM FOR WORKERS COMPENSATION CLAIMS

            (i)   Claim service for workers compensation includes access to a
                  prescription drug program. This program consists of drug
                  vendors which will accept fees reduced below the pharmacy's
                  usual charge. Charges for use of the prescription drug program
                  are charged as medical loss to the individual claim files.

            (ii)  KEIC shall provide information designed to inform and educate
                  Claimants on the availability and use of the prescription drug
                  program and shall issue to each workers' compensation Claimant
                  an identification card to be used at the time retail
                  prescription drug purchases are made.

      L.    PRE-ADMISSION CERTIFICATION AND UTILIZATION REVIEW

            (i)   "Physician Consultant" shall mean a physician who assesses the
                  medical necessity and appropriateness of medical services
                  provided to Claimants in accordance with state and federal
                  treatment guidelines, when appropriate, Commission/URAC
                  standards, and generally accepted, externally acquired, and/or
                  internally developed criteria in conjunction with supporting
                  clinical documentation and findings.

            (ii)  "Utilization Management" shall mean determination of the
                  appropriateness of payment for health care services,
                  procedures and facilities rendering treatment. Utilization
                  Management consists of pre-certification, concurrent, and
                  retrospective reviews which may include a length of service
                  and causality review.

            (iii) KEIC shall provide Utilization Management, and Physician
                  Consultant services to claimants. Retrospective reviews may be
                  recommended by KEIC in situations of conflicting medical
                  information, questionable billing or at the request of the
                  Claimant, provider or claims adjuster.

            (iv)  KEIC shall obtain any necessary medical information from the
                  provider in order to perform the Utilization management
                  services. A nurse may render certification determinations and
                  a physician consultant shall render all clinical
                  non-certification determinations.

            (v)   KEIC shall notify the provider of certification determinations
                  via telephone and/or in writing if required by law. Claimant
                  may also be notified in writing if required by law.

            (vi)  Cases shall be referred to a KEIC physician consultant when
                  the medical information obtained from the provider does not
                  meet the appropriate criteria. The physician consultant may
                  contact the treating provider to discuss the treatment plan
                  and/or request additional information if needed.

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            (vii) The treating provider or treating facility shall be notified
                  of a non-certification determination within one (1) business
                  day following the determination by the physician consultant.
                  KEIC shall send written notification of non-certification to
                  the treating provider and/or treating facility, and to the
                  Claimant when required.

      M.    OTHER MEDICAL COST CONTAINMENT SERVICES

      For additional fees agreed to by the parties in writing, KEIC shall use
      other medical care review and medical cost containment programs, including
      services provided by KEIC affiliate companies, as agreed to by the parties
      in writing. Fees shall be charged as medical loss or Allocated Loss
      Adjustment Expense as required by law or regulation.

      N.    THE EAGLES CLAIM STATUS MEETING

      KEIC will participate with EAGLE in quarterly claim status meetings to
      discuss status and relevant issues concerning: individual Claims, such
      Claims to be agreed prior to meeting; issues of changes in statutory or
      regulatory environments which may affect EAGLE or KEIC; and specific
      litigation issues. These meetings to be held telephonically or at such
      location as is agreed to by the parties.

      O.    1099 PREPARATION SERVICES

      KEIC will produce, from its claims system, in a format suitable for
      electronic transmission, the information necessary for the preparation of
      Internal Revenue Service ("IRS") Form 1099 for transactions requiring the
      submission of such forms to the IRS, and such information shall be
      transmitted to the IRS or provided to a third party 1099 service provider
      (1099 Pro, Inc., or a comparable provider) for transmission to the IRS.

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