Document:

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                                                                   EXHIBIT 10.14

                              COMMUTATION AGREEMENT

      This Commutation Agreement (this "Commutation") is entered into between
Kemper Employers Insurance Company, an Illinois domiciled insurance company
("KEIC"), and Lumbermens Mutual Casualty Company, an Illinois domiciled
insurance company ("Lumbermens"), on September 30, 2003 (the "Effective Date").

      WHEREAS, KEIC and Lumbermens entered into a Quota Share Reinsurance
Agreement effective October 1, 1999 (the "Quota Share Agreement"), a copy of
which is attached hereto as Exhibit A and incorporated herein by reference,
whereby Lumbermens, in consideration of payment of premium, reinsured 80% of
certain risks insured by KEIC specified in the Agreement;

      WHEREAS, KEIC and Lumbermens desire (a) to fully and finally settle and
commute all obligations and liabilities known and unknown of KEIC and Lumbermens
under the Quota Share Agreement and for (b) for KEIC to reassume the cession of
liabilities and obligations under the Quota Share Agreement;

      WHEREAS, pursuant to that certain Purchase Agreement, dated as of July 14,
2003 (as amended, the "Purchase Agreement"), SeaBright Insurance Holdings, Inc.,
a Delaware corporation, has acquired all of the outstanding shares of capital
stock of KEIC (the "Share Acquisition");

      WHEREAS, the execution and delivery of this Commutation is required
pursuant to a post-closing covenant contained in the Purchase Agreement;

      WHEREAS, the consummation of the transactions contemplated by the Purchase
Agreement, and KEIC's agreements as set forth herein to reassume the cession of
liabilities and obligations under the Quota Share Agreement, satisfy and perform
itself the obligations and liabilities that are the subject of this Commutation
and not to pursue recovery under the Quota Share Agreement from Lumbermens for
such obligations and liabilities, constitute good and valuable consideration to
Lumbermens provided to Lumbermens on the Effective Date; and

      WHEREAS, capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Purchase Agreement.

NOW THEREFORE, in consideration of the mutual covenants and conditions set forth
below, and for other good and valuable consideration, the sufficiency and
receipt of which is acknowledged by the parties hereto, the parties hereto agree
that:

1.    The effective time of this Commutation shall be as of immediately
following the consummation of the Share Acquisition on the Effective Date. On
the date of this Agreement, Lumbermens shall pay and transfer to KEIC, by
certified check or wire transfer in good and lawful U.S. currency,
$12,881,000.00 (which amount shall be subject to adjustment upward or downward
in accordance with the terms and conditions of the Purchase Agreement).

2.    KEIC shall accept the sum set forth in paragraph 1 herein in as full and
final settlement of any and all amounts due by Lumbermens to KEIC under the
Quota Share Agreement, and (pending receipt of such sum) the Quota Share
Agreement is hereby terminated in its entirety,

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and KEIC hereby accepts and reassumes the cession of all obligations and
liabilities under the Quota Share Agreement.

3.    Upon the payment by Lumbermens to KEIC under paragraph 1 hereof, KEIC
shall forgive, commute, release, and forever discharge Lumbermens, its
predecessors, parents, affiliates, agents, officers, directors, shareholders,
and assigns from any and all obligations, adjustments, executions, offsets,
actions, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, damages, judgments, claims, demands, liabilities and/or
losses whatsoever, all whether known or unknown, reported or unreported and
whether currently existing or arising in the future that KEIC and its successors
and assigns ever had, now have, or hereafter may have, whether grounded in law
or equity, in contract or in tort, against Lumbermens by reason of any matter
whatsoever arising out of the Quota Share Agreement, it being the intention of
the parties that this release operate as a full and final settlement of
Lumbermens' current and future liabilities to KEIC under the Quota Share
Agreement; provided, however, that this release shall in no manner waive,
release, diminish or otherwise affect any right or interest of KEIC under the
Purchase Agreement or any Ancillary Agreement (other than this Commutation).

4.    Upon payment by Lumbermens to KEIC under paragraph 1 hereof is made and
accepted, Lumbermens shall forgive, commute, release, and forever discharge
KEIC, or its predecessors, parents, affiliates, agents, officers, directors,
shareholders, and assigns from any and all obligations, adjustments, executions,
offsets, actions, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, damages, judgments, claims, demands, liabilities and/or
losses whatsoever, all whether known or unknown, reported or unreported and
whether currently existing or arising in the future that Lumbermens or any of
its Affiliates and its successors and assigns ever had, now have, or hereafter
may have, whether grounded in law or equity, in contract or in tort, against
KEIC by reason of any matter whatsoever arising out of the Quota Share
Agreement, it being the intention of the parties that this release operate as a
full and final settlement of KEIC's current and future liabilities to Lumbermens
under the Quota Share Agreement; provided, however, that this release shall in
no manner waive, release, diminish or otherwise affect any right or interest of
Lumbermens or any of its Affiliates under the Purchase Agreement or any
Ancillary Agreement (other than this Commutation); and provided, further, that
Lumbermens shall hereafter (immediately following receipt thereof) pay over to
KEIC the amount of any and all reimbursements or other amounts paid over to
Lumbermens, or its predecessors, parents, affiliates, agents, officers,
directors, shareholders, or assigns, by any third party in connection with the
cession of obligations and liabilities that have been reassumed pursuant to
paragraph 2 hereof and commuted pursuant to paragraph 3 hereof.

5.    This Commutation and the Purchase Agreement contain the entire agreement
between the parties with respect to its subject matter hereof. All discussions
and agreements previously entertained between the parties regarding the subject
matter of the Commutation are merged into this Commutation and the Purchase
Agreement. This Commutation may not be modified or amended, nor any of its
provisions waived, except by an instrument in writing, signed by the parties
hereunder.

6.    All notices and other communications hereunder shall be in writing and
shall be delivered by registered or certified mail, return receipt requested,
postage prepaid, or by facsimile, addressed as follows:

                                     - 2 -
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      Lumbermens Mutual Casualty Company
      1 Kemper Drive
      Long Grove, Illinois  60049
      Attention: General Counsel
      Fax: (847) 320-4202

      Kemper Employers Insurance Company
      2101 4th Avenue, Suite 1600
      Seattle, Washington  98121
      Attention: Chief Executive Officer
      Fax: (206) 448-4442

7.    The Commutation and its terms and conditions shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors,
affiliates, officers, directors, employees, parents, subsidiaries, assigns,
heirs, and personal representatives, and receivers and liquidators and shall be
governed by, construed, and enforced under the laws of the State of Illinois.

8.    Each of the parties hereto expressly warrants and represents that it is an
insurance company in good standing under the laws of the State of Illinois and
that the execution of this Commutation is fully authorized by it; and that the
person or persons executing this Commutation on its behalf have the necessary
and appropriate authority to do so. Lumbermens hereby expressly warrants and
represents that there are no pending agreements, transactions, or negotiations
to which it or any of its Affiliates is a party that would render this
Commutation or any part thereof void, voidable, or unenforceable; and that,
except as otherwise duly obtained, no authorization, consent, or approval of any
government entity is required to make this Commutation valid, binding and
enforceable upon the parties.

9.    KEIC and Lumbermens hereby agree to execute (and, in the case of
Lumbermens, to cause its Affiliates to execute) promptly upon request any and
all supplemental agreements, releases, affidavits, waivers, or other documents
that the other party may reasonably require in order to implement the provisions
or objectives of this Commutation.

10.   This Commutation may be executed in multiple counterparts, each of which,
when so executed and delivered, shall be an original, but such counterparts
shall together constitute one and the same instrument and agreement.

                                    * * * * *

                                     - 3 -
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      IN WITNESS WHEREOF, the parties hereto have executed this Commutation as
of the date first written above.

LUMBERMENS MUTUAL CASUALTY COMPANY

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

KEMPER EMPLOYERS INSURANCE COMPANY

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

                                     - 4 -<PAGE>

                                                                   EXHIBIT 10.15

                        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 "Provider"), and
Eagle Pacific Insurance Company, a Washington domiciled insurance company
("Eagle Pacific"), and Pacific Eagle Insurance Company, a California domiciled
insurance company (together with Eagle Pacific, the "Company").

                                     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., Lumbermens
      Mutual Casualty Company, the Company and Insurance Holdings, Inc.
      ("Holdings"), Holdings acquired, inter alia, the stock of the Provider.

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,

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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 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.

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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. 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.

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            (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 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.

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      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.

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.

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      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 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

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            (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.

            (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,

<PAGE>

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 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:

<PAGE>

                  If to the Provider, 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

                  with concurrent copies to:

                        Summit Partners
                        499 Hamilton Avenue
                        Palo Alto, California 94310
                        Attention: Peter Y. Chung
                                   J. Scott Carter
                        Facsimile: (650) 321-1188

                        and

                        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 Company, 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

<PAGE>

                        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 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. All obligations of the "Company"
hereunder shall be the joint and several obligations of Eagle Pacific and
Pacific Eagle.

      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.

<PAGE>

      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
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.]

<PAGE>

            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

                                     EAGLE PACIFIC INSURANCE COMPANY

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

                                     PACIFIC EAGLE INSURANCE COMPANY

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

              *SIGNATURE PAGE TO ADMINISTRATIVE SERVICES AGREEMENT*

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