EX-10.21



 





Confidential Treatment

Exhibit 10.21




	 	 	 
	PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT’S APPLICATION
OBJECTING TO
DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 406. THE
OMITTED
PORTIONS HAVE BEEN MARKED WITH BRACKETS.

	 	






LARGE RISK ALTERNATIVE RATING AND INSURANCE PROGRAM AGREEMENT




between




(“Customer” or “Insured”)




and




HARTFORD FIRE INSURANCE COMPANY




And its affiliates (as defined in each Policy and / or providing services as defined herein)




Hartford, CT

(“Hartford” or “Insurer”)



IN THIS AGREEMENT, the following terms have these meanings:




	 	 	 
	1. CUSTOMER:
	 	 
	 
	 	 
	2. HARTFORD:

	 	Hartford Fire Insurance Company
	 

	 	And its affiliates and subsidiaries.
	 

	 	A Connecticut Corporation
	 

	 	Hartford Plaza
	 

	 	Hartford, Connecticut 06115
	 

	 	Attention: Risk Management Division
	 
	 	 
	 

	 	Notice To Hartford by Customer:
	 

	 	In the event of bankruptcy by
Customer, notification and any and
all correspondence is to be sent to:
	 
	 	 
	 

	 	Hartford Fire Insurance Company
	 

	 	The Hartford
	 

	 	Hartford Plaza
	 

	 	Hartford, CT 06115
	 

	 	Attention: Mr. Thomas Makuch T-21-88
	 
	 	 
	3. EFFECTIVE:

	 	March 1, 2007






WHEREAS:





	1.	 	Hartford is engaged in underwriting insurance;
	 
	2.	 	Customer is a legally incorporated and licensed professional employment
organization (PEO) engaged in providing a variety of administrative
services directly to employers (Clients) who require the performance of
such services for their direct employees;
	 
	3.	 	Hartford has issued to Customer certain Policies of insurance;






 









 













	4.	 	Customer has selected one or more rating programs for payment of premium and other
charges for the Policies. The premiums, deductible reimbursements, taxes, assessment
fees and other obligations for the Policies will be computed according to this
Agreement and the Claim Agreement;
	 
	5.	 	Customer may be required to provide Security for its Obligations under this Agreement;
	 
	6.	 	Customer has selected Specialty Risk Services, a Third Party Administrator (“TPA”) to
handle its claims, and Insurer hereby authorizes TPA to provide claims adjusting and
administrative services on its behalf with
respect to Policies subject to this Agreement.




NOW, THEREFORE, in consideration of the premises and of the mutual promises herein, Customer and
Hartford agree as follows: All factors, premium bases, Policy numbers, program descriptions,
deductible amounts, and loss limitations have been agreed to by the parties and are shown on the
following Pages. All of the provisions of the Policies, including endorsements forming a part
thereof, continue to apply, subject to the provisions in this Agreement, which affect the overall
cost of the Insurance Program and the Policies.





	I.	 	Representation and Warranties of Customer
	 
	 	 	It is an underwriting condition to Hartford issuing the Policies to Customer that Customer
complies with the following:






	 	A.	 	Customer shall provide to Hartford, fifteen (15) days prior to the inception date of
Coverage under the Policies, a current list of Clients and the payroll thereof by class and
state. The minimum requirement for reporting client data is an electronic spreadsheet in
Microsoft Excel or other spreadsheet utility that is compatible with Microsoft Excel.
Thereafter, Customer agrees to issue similar reports to Hartford on a quarterly basis.
Failure to make the above monthly reports for existing and new Clients of Customer will
constitute a material increase in the exposure under the Policies for Hartford and may
result in their cancellation. Customer agrees that Hartford may change amounts due under
this Agreement to reflect changes in exposure reflected in these monthly reports.
	 
	 	 	 	All payroll will include the full payroll of executive officers of Client companies, except
where their voluntary exclusion is permitted under state regulation or law.
	 
	 	B.	 	Customer shall provide to Hartford, within five (15) days of the effective date of any
new Client contract, the name, address, Federal Employer Identification Number (FEIN),
address of each additional Client location, number of employees by location and payroll by
class and state of such new Client, and, where required by state regulation, the experience
modification and rating bureau identification number of such new client. Customer shall
provide to Hartford, within five (5) days of the effective date of any termination of an
existing Client contract, the name, address, Federal Employer Identification Number (FEIN)
and payroll by class and state for such terminated client. Customer shall provide these
notifications in a reporting format as specified by Hartford. Failure to make the above
notification for new and terminated Clients of Customer will constitute a material increase
in the exposure under the Policies for Hartford and may result in their cancellation.
	 
	 	C.	 	Customer may not materially reduce its Risk Management resources or Risk Management
practices relating to the evaluation, underwriting and active management of both existing
and prospective Clients from the current status. It is agreed between the parties hereto
that such reduction or change will result in a significant increase in the risk of future
losses under the Policies and may entitle Hartford to terminate the Policies under
applicable state law. Likewise, the termination of Customer’s services to Client will
result in the termination of Customer’s services with respect to loss control and result in
a significant increase in the risk of future losses entitling Hartford to terminate the
Client’s Workers’ Compensation coverage under applicable state law.





 









 













	 	D.	 	Customer must maintain a financial condition satisfactory to Hartford and shall provide
Hartford with a financial statement every quarter after Policy inception. Such quarterly
reports will include a balance sheet, income statement, statement of cash flows, a statement
of any material changes in either corporate or capital structure, and, if applicable, a
statement detailing any violation of debt covenants. If Customer’s financial condition
should materially change from this standard, Hartford will give Customer the opportunity to
post Security in a form and amount as specified by Hartford. Customer will have thirty (30)
days to provide appropriate Security once notified by Hartford of the need to do so. The
maintenance of an appropriate financial condition and/or the provision of Security for the
Customer’s Obligations hereunder is an underwriting requirement for Policies.
	 
	 	E.	 	Customer Represents that it holds the necessary licenses as a Professional Employment
Organization for all states in which its Clients have operations and that there are no
regulatory or administrative actions pending against it, and that its officers have never
been indicted or convicted of any felonies for fraud, tax evasion, or misappropriation of
funds. Customer agrees to maintain all such licenses in good standing with the appropriate
authority and will notify Hartford immediately when such good standing has become impaired.
Failure to comply with this provision may entitle Hartford to terminate the Policies under
applicable state law.
	 
	 	F.	 	For Workers’ Compensation, Customer agrees that one (1) policy will be used, where
permitted, for the states where Customer has exposures. If additional policies must be
issued to comply with a specific state employee leasing regulation, such policies will be
considered part of this program, however, Customer shall be required to give Hartford the
necessary information to issue such Policies within five (5) days of coverage inception of
the specific Workers’ Compensation Policy. Hartford has the sole discretion in the manner
and method of issuing policies to cover Customer’s exposures.
	 
	 	 	 	Customer agrees that should it decide to terminate its contract with Client, that the date
of its termination of a Client shall be coordinated with Hartford’s ability to terminate
Client’s Workers’ Compensation coverage under applicable state law. In the event that
Hartford is required to continue Client’s Workers’ Compensation coverage due to statute,
regulation or other regulatory action beyond the date when Customer terminates its
contractual relationship with Client, Customer shall indemnify Hartford for any and all
claims, losses, premiums, taxes and other expenses incurred by Hartford and arising out of
the Workers’ Compensation coverage provided to Client by Hartford during the period of time
beginning with the termination of Customer’s contractual relationship with Client and ending
upon Hartford’s termination of the Client’s Workers’ Compensation coverage.
	 
	 	G.	 	Underwriting and Risk Assumption of the Customer






	 	1.	 	Acquisition of Prospective Clients
	 
	 	 	 	Customer agrees to abide by the underwriting restrictions and guidelines outlined in
Schedule C, attached. Customer will not add new Clients or accept new exposures in
violation of these
restrictions and guidelines without the express written authorization of Hartford.
Customer will not add new Clients or accept new exposures in states where it is not
licensed to operate. For Clients to be eligible for inclusion into the insurance
provided by the Policies, Client companies must have
valid written contracts with Customer that establish the essential relationship of
co-employment with the Client’s employees.
	 
	 	 	 	OTHER PROFESSIONAL EMPLOYMENT COMPANIES (PEOs) ARE NOT ELIGIBLE FOR COVERAGE UNDER THE
POLICIES WHETHER OR NOT THEY ARE CLIENTS, OWNED BY, MERGED WITH OR OTHERWISE AFFILIATED
WITH CUSTOMER UNLESS APPROVED IN WRITING BY HARTFORD. NO AGENT OF HARTFORD HAS THE
AUTHORITY TO BIND HARTFORD TO COVERAGE FOR SUCH ENTITIES.





 









 













	 	2.	 	Authority
	 
	 	 	 	Provided that Customer is not in default of its Obligations under this Agreement and
subject to requirements above, and any insurance agency licensing requirements which may
apply, Customer
has the authority to evaluate and approve for inclusion for coverage under the Policy
and the Agreement any prospective Client of Customer not otherwise restricted or
prohibited by the underwriting restrictions and guidelines contained in the Agreement or
the Schedules attached.
	 
	 	 	 	Underwriting restrictions and guidelines outlined in Schedule C may be amended at any
time at Hartford’s sole discretion. Any revised underwriting restrictions and guidelines
communicated in
any form to Customer are automatically incorporated into this Agreement.
	 
	 	 	 	For any class code contained in that does not have a Hartford designated hazard code,
Customer shall request a hazard code to be designated by Hartford.
	 
	 	 	 	ANY CLIENT COMPANIES OR OTHER PEOs ADDED BY MERGER, ACQUISITION OR OTHER CORPORATE
ACQUISITION DEVICE MUST HAVE PRIOR WRITTEN APPROVAL BY HARTFORD.
	 
	 	 	 	Customer agrees to hold Hartford harmless from any amounts paid under the Policies or
incurred under this Agreement arising out of Client companies or other PEOs added to the
Policies by certificate or other oral or written representation by Customer, its
employees, and agents, not
expressly authorized under this Agreement.
	 
	 	3.	 	Customer Policies
	 
	 	 	 	Upon the request of Customer’s Client Hartford may, at their sole option, agree to issue
evidence of Workers’ Compensation coverage in the form of Workers’ Compensation
Policies, however, Customer agrees to indemnify Hartford for any losses or expenses
incurred under such Policies.
	 
	 	4.	 	Customer Compliance
	 
	 	 	 	Customer agrees that upon reasonable notice and during ordinary business hours, Hartford
shall have the right to audit Customer’s records including the records of the Customer’s
Client companies, in their Home Office and other business locations pertaining to
Customer’s underwriting of their
Clients and their compliance with the provisions of this Agreement. Customer agrees to
furnish Hartford with all records pertaining to Customer’s clients that are covered
under this program of insurance.






Customer’s Compliance with the above for including its Clients into the coverage provided by
the Policies is an underwriting requirement of the Policies. Failure to comply with these
rules may result in the termination of the Policies under applicable state laws. In the
event of default under this section of this Agreement, Maximum Retrospective Premium is
immediately due and payable in full.



 









 













	II.	 	Rating Programs
	 
	 	 	Customer has agreed with Hartford that selected rating programs will apply to the Workers’
Compensation Policies as listed below.






	 	A.	 	Deductible Program And Policies
	 
	 	 	 	Customer has selected a deductible program for the following lines of insurance. The
definition and scope of the deductible reimbursement is described herein and in the Policy
deductible endorsement(s).





	 	 	 	 	 	 	 
	 
	 	 	 	Line of
	 	Deductible
	Policy Number *:
	 	Policy Period
	 	Coverage:
	 	Reimbursement
	 
	 	 	 	 	 	Limit/Amount:
	 
	 	 
	 	 
	 	 
	 	 	 	 	 	 	 







 




			
	*	 	Note: Either “WN” or “WE” may be used on any policy within this range of possible
policy numbers






	 	 	 	Subject to the terms of any applicable Large Risk Alternative Rating Option and Deductible
Rating Plans, the premium for insurance provided in excess of deductible amounts shall be
subject to a Minimum Premium indicated on Schedule A and be the sum of the premiums for the
Deductible Policies and their endorsements. The Minimum Premium may also be adjustable on
the basis indicated on Schedule A.
	 
	 	 	 	The Policies contain deductible provisions which require that the Customer reimburse
Hartford for deductible amounts. Claims under these Policies, which fall within the
deductible, will be handled either
by the Hartford or a TPA under a Claim Agreement.
	 
	 	B.	 	Guaranteed Cost Programs and Policies
	 
	 	 	 	Customer has selected a Guaranteed Cost program for the following lines of insurance. The
adjustment of the premium is defined herein and in the Policy.





	 	 	 	 	 
	 	 	 	 	Line of
	PolicyNumber:	 	PolicyPeriod	 	Coverage:
	16WE J76537

	 	3/01/2007-3/01/2008
	 	Workers’ Compensation
	16WE J76540
	 	 	 	 
	16WE J76540
	 	 	 	 
	16WE J76543
	 	 	 	 
	16WE J76543
	 	 	 	 
	16WE J76544
	 	 	 	 
	16WE J76545
	 	 	 	 
	16WE J76546
	 	 	 	 
	16WE J76546
	 	 	 	 
	16WE J76549
	 	 	 	 
	16WE J76550
	 	 	 	 
	16WE J76556
	 	 	 	 
	16WE J76558
	 	 	 	 
	16WE J76560
	 	 	 	 
	16WE J77774
	 	 	 	 
	16WE J77775
	 	 	 	 
	16WE J77776
	 	 	 	 







 









 












	 	 	 	 	 
	 	 	 	 	Line of
	PolicyNumber:	 	PolicyPeriod	 	Coverage:
	16WE J77780

	 	3/01/2007-3/01/2008
	 	Workers’ Compensation
	16WE J77781
	 	 	 	 
	16WE J77782
	 	 	 	 
	16WE J77783
	 	 	 	 
	16WE J80610
	 	 	 	 
	16WE J80701
	 	 	 	 
	16WE J80701
	 	 	 	 
	And any other policies as assigned

	 	xx/xx/2007-3/1/2008	 	 







	 	 	 	The premium for insurance provided on a guaranteed cost basis shall be the sum of the
premiums for the guaranteed cost Policies and their endorsements.
	 
	 	 	 	Claims under these Guaranteed Cost Policies either may be handled by a TPA under a Claim
Agreement or may be handled by the Hartford as part of the cost of the premium.
	 
	 	 	 	Claims on policies issued to Customers’ Clients for the purpose of evidencing Workers’
Compensation are subject to indemnification provisions outlined in this agreement, including
but not limited to Section I.G.3.
	 
	 	C.	 	Retrospectively Rated Program and Policies (Large Risk Alternative Rating
Option)
	 
	 	 	 	In accordance with the Large Risk Alternative Rating Option (“LRARO”), and subject to the
provisions of any applicable state retrospective rating endorsements, Customer has selected
a retrospective rating program for the following lines of insurance. The retrospective loss
limitations are defined below. The adjustment of the premium is defined in the Policy and
by this Agreement and is subject to a Minimum Retrospective Premium as indicated on Schedule
B. The Minimum Retrospective Premium may also be adjustable as indicated on Schedule B.
For lines of insurance subject to retrospective rating program in the state(s) of (list
states) refer to the Retrospective Premium Endorsement on the Policy for the explanation of
the rating program and how the retrospective premium will be determined.





	 	 	 	 	 	 	 	 	 
	 	 	 	 	Line of	 	 
	PolicyNumber *:	 	PolicyPeriod	 	Coverage:	 	Loss Limitation:
	16 WBR J7650099

	 	03/01/07-03/01/08
	 	Workers’
	 	$	1,000,000	 
	16 WBR J77700-99

	 	 	 	Compensation-	 	 	 	 
	16 WBR J79200-99

	 	 	 	Conventional Retro	 	 	 	 
	16 WBR J80200-99
	 	 	 	 	 	 	 	 
	16 WBR J80600-99
	 	 	 	 	 	 	 	 
	16 WBR J80700-99
	 	 	 	 	 	 	 	 
	16 WBR J80800-99
	 	 	 	 	 	 	 	 
	and any other policies 

as assigned
	 	 	 	 	 	 	 	 







	 	 	 	Loss Limitations Under the Retrospective Rating Plan
	 
	 	 	 	For Workers’ Compensation, losses arising out of a single accident shall be limited to the
loss limitation shown above. The loss limitation includes losses and allocated loss
adjustment expenses arising out of a single accident. For occupational disease claims, as
defined in the Policy, this limitation shall apply to each employee.






 









 













	 	 	 	Retrospective Rating Plan Formula
	 
	 	 	 	The retrospective rating formula, which is subject to Minimum and Maximum Retrospective
Premiums, is:
	 
	 	 	 	Net Retrospective Premium = [Basic Premium + Loss Limit Premium + (Incurred Losses X Loss
Development Factor X Loss Conversion Factor)] X Tax Multiplier
	 
	 	 	 	The Retrospective Rating Values are indicated on Schedule B.
	 
	 	 	 	Loss Development Factors
	 
	 	 	 	It is agreed that the following retrospective rating plan development factors apply:





Loss Development Factors for Retrospective Rating




	 	 	 
	 	 	Workers’ Compensation
	Factors applicable to losses valued within eighteen (18) months of Policy inception

	 	[___]
	Factors applicable to losses valued within thirty (30) months of Policy inception

	 	[___]
	Factors applicable to losses valued within forty-two (42) months of Policy inception

	 	[___]
	Factors applicable to losses valued within fifty-four (54) months of Policy inception

	 	[___]
	Factors applicable to losses valued within sixty-six (66) months of Policy inception.

	 	[___]
	Factors applicable to losses valued within seventy-eight (78) months of Policy inception.

	 	[___]
	Factors applicable to losses valued every twelve (12) months thereafter.

	 	[___]







	 	 	 	The first adjustment of Net Retrospective Premium will be made 18 months after Policy
inception. Subsequent scheduled adjustments will be made every Twelve (12) months
thereafter. Hartford reserves the right, at its sole discretion, to make more frequent
adjustments at any time but no more frequently than once a month.






	III.	 	Basket Maximum Provision for Loss (“Basket Maximum”)
	 
	 	 	The “Basket Maximum Provision for Loss” establishes the total amount that the Customer will pay
for losses under the rating programs or Deductible Reimbursements and does not include any
premiums, Miscellaneous Charges or indemnity amounts. All losses within deductible portions of
Policies, or included within the loss limitation of a retrospectively rated Policy will be
included in the Basket Maximum. Customer will not be billed for additional loss reimbursements
after the Basket Maximum is exhausted.
	 
	 	 	The initial Basket Maximum is indicated on Schedule A. This amount will be adjusted after
Policy Expiration based upon the exposure base indicated on Schedule A.
	 
	 	 	If Policies to which this provision applies are canceled or otherwise terminated prior to the
end of their Policy term, the minimum amount for the Basket Maximum will apply.
	 
	IV.	 	Dividends
	 
	 	 	Policies may be eligible for dividends pursuant to the Dividend Statement attached hereto as an
exhibit.
Each “Participating” Policy is entitled to share in the distribution of dividends to the extent
determined by the Board of Directors of the issuing Insurance Company. No one is authorized to
guarantee the payment of dividends in advance. Any applicable dividend statement is attached
hereto.






 









 













	 	 	Provisional Dividend: The Hartford’s practice is to recommend to the Board of Directors of each
Insurance Company approval of a provisional dividend based upon Incurred Losses valued as of
eighteen (18) months after Policy inception, with annual recalculations thereafter until the
final calculation.
	 
	 	 	Customer hereby agrees to reimburse the Insurance Company within thirty (30) days’ notice of
overpayment of a provisional dividend.
	 
	V.	 	Security






	 	A)	 	Type of Security:     Letter of Credit
	 
	 	 	 	Customer agrees: (i) to give Hartford a clean, irrevocable letter of Credit (“Credit”)
naming Hartford Fire Insurance Company or (at the direction of Hartford) one of its
designated affiliates or subsidiaries as beneficiary, and (ii) upon prior thirty (30) days’
written notice to Customer, in substitution of any existing Credits, to issue a revised
clean, irrevocable Letter of Credit (“Substitute Credit”) to Hartford Fire Insurance Company
or one of its affiliates or subsidiaries.
	 
	 	 	 	Said Credit must be issued or confirmed by a bank which is authorized to issue letters of
credit, approved by Hartford and either a member of the Federal Reserve System or a New York
State chartered bank (“Issuing Bank”). The Credit must conform to New York Insurance
Regulation 133. The initial term of any Credit shall be at least one year, and the Credit
must provide that it will be extended automatically without amendment for one year beyond
the Credit expiration date or any future expiration date unless, at least thirty (30) days
prior to any expiration date, Issuing Bank shall notify Hartford by registered mail that it
elects to consider the Credit as not renewed for any additional period. If any Credit is not
renewed, Customer agrees to furnish a new Credit at least thirty (30) days prior to the
expiration date of the existing Credit and any new or renewal Credits.
	 
	 	 	 	If said credit is issued by any institution now or expected to have a controlling ownership
relationship with Customer, and/or a relationship wherein such institution has a material
influence on the operations of the Customer’s business, then such LOC must be confirmed by a
bank which is authorized to issue letters of credit, approved by Hartford and either a
member of the Federal Reserve System or a New York State chartered bank (“Confirming Bank”).
	 
	 	B)	 	Initial New Security Amount:     $ none
	 
	 	 	 	The Wrapped-Up Security Requirement is initially satisfied by Security that Hartford
currently holds for any and all obligations of the Customer, whether arising from this
agreement or any other agreements between Customer and Hartford. Customer agrees that
nothing herein changes or limits Hartford’s rights under this agreement to require Security
or change the Security as outlined in this agreement.
	 
	 	 	 	Security designated as Paid Loss Retrospective Program is for the Premium Loan and is
subject to the Premium Loan Plan provisions of this Agreement.
	 
	 	C)	 	Security Minimum Amount:     $[___].
	 
	 	D)	 	Adjustment of Security
	 
	 	 	 	The first adjustment of Security is scheduled at twelve (12) months after Policy inception.
Subsequent scheduled adjustments will be made at eighteen (18) months and every Twelve (12)
months thereafter. Adjustments to security will be made after any coincidentally timed
adjustments to Prefund Balances (defined under the Claim Agreement) However, if at any time
during the Policy Period or thereafter, Hartford determines that Security is inadequate,
Hartford may, at its sole discretion, adjust Security, and





 









 













	 	 	 	such rights to adjust security supersede any scheduled adjustment to security. Any
reduction in Security will be at Hartford’s discretion and is subject to any outstanding
payment obligations, financial condition
of insureds, loss development or change in operations.
	 
	 	 	 	Calculation of Security amount:





Loss Development Factors for Security




	 	 	 
	 	 	Workers’ Compensation
	Factors applicable to losses valued within eighteen(18) months of Policy inception:

	 	[___]
	Factors applicable to losses valued within thirty (30) months of Policy inception:

	 	[___]
	Factors applicable to losses valued within forty two (42) months of Policy inception:

	 	[___]
	Factors applicable to losses valued within fifty four (54) months of Policy inception:

	 	[___]
	Factors applicable to losses valued within sixty six (66) months of Policy inception:

	 	[___]
	Factors applicable to losses valued within seventy eight (78) months of Policy inception

	 	[___]
	Factors applicable to losses valued every twelve (12) months thereafter.

	 	[___]







	 	 	 	If the proportion of total audited Unmodified Manual Premium contributed by any
individual state changes by more than 10% from the proportion estimated at program
inception, loss development factors may be adjusted to reflect the actual audited
distribution by state of Unmodified Manual Premium. If the Policy term is other than twelve
(12) months, Hartford reserves the right to revise these factors.
	 
	 	 	 	Losses shall be secured to ultimate (“Ultimate Security”) for all Policies under this
Agreement and all Agreements listed under Wrapped-Up Security. Hartford requires that
Customer provide collateral to secure its losses to their ultimate value. The total amount
of Security shall be determined as follows:






	 	 	 	Ultimate Losses are equal to Incurred Losses multiplied by the appropriate loss
development
factor indicated above.
	 
	 	 	 	The amount of Security required is equal to Ultimate Losses less deductible
reimbursements paid
by Customer and received by Hartford at the time of the Security Adjustment.






	 	 	 	All Security amounts will be rounded to the next multiple of $100,000 and shall be no less
than the Security Minimum Amount.
	 
	 	 	 	In the event of default by the Customer in its Obligations under this Agreement, the amount
of Security required is equal to the Basket Maximum Provision for Loss less Retrospective
and Deductible reimbursements paid by Customer and received by Hartford at the time of the
default. This paragraph applies to this Agreement and all Agreements listed under
Wrapped-Up Security. Any additional security required under this paragraph is due and
payable immediately on event of default.
	 
	 	E)	 	Wrapped-Up Security:
	 
	 	 	 	Maintaining Security under this Agreement shall satisfy the Security requirements for all of
the Policies under contracts identified under Wrapped-Up Security. By agreeing to
Wrapped-Up Security and in consideration of the combined Security requirements, Customer
authorizes Hartford to adjust its losses for all prior Policy years subject to Wrapped-Up
Security. Hartford will adjust all Policies according to the factors applicable to the
respective Policies’ effective periods. All Policies subject to the Wrapped-Up provisions
of this Agreement shall be adjusted at the same time as the Policies issued under this
Agreement. Contracts subject to a Wrapped-Up Security are indicated on Schedule A. If at
any time during the Policy Period or thereafter, Hartford determines that Security is
inadequate, Hartford may, at
its sole discretion, adjust Security, and such rights to adjust security supersede any
scheduled adjustment
to security.






 









 













	 	 	 	The Security is wrapped for all policy years and all rating programs. Wrapped-Up Security is $[___].
	 
	 	 	 	The Adjustment dates must be the same for all rating programs in order to have Wrapped-Up Security.
All policies will be adjusted in accordance with the factors applicable to the respective policy periods.






	VI.	 	Miscellaneous Charges
	 
	 	 	Miscellaneous Charges means taxes, any and all Assessments, surcharges and Residual Market Costs
for which Customer is liable to Hartford under the insurance program, whether they have been
included within the defined costs under this Agreement or not included because they cannot be
quantified accurately as of the Effective Date of this Agreement.






	 	A.	 	Customer is obligated to pay these amounts under its insurance program and to indemnify
Hartford as set forth in the Payment and Indemnification Sections of this Agreement.
	 
	 	B.	 	A chief component of these charges in addition to those mentioned in C below, are
Residual Market Costs (“Residual Market Costs,” “Residual Market Load” or “RML”),
established in the table attached as Schedule D, which are calculated as follows:






	 	1.	 	The Residual Market Cost is the sum of all the costs for each state. It is
calculated by multiplying each state’s operative premium by its operative factor.
	 
	 	2.	 	If an operative premium is stated to be:






	 	(a)	 	Standard,” it shall be the standard premium as calculated in
accordance with this Agreement.
	 
	 	(b)	 	“Retro,” it shall be the Net Retrospective Premium as calculated
periodically in accordance with this Agreement and any retrospective premium
endorsements attached to the Policies.
	 
	 	(c)	 	“Deductible,” it shall be the deductible premium as calculated in
accordance with this Agreement.
	 
	 	(d)	 	“Included,” it shall be not applicable. Residual Market Costs are
included in the premium and shall not be calculated by the terms of this
Agreement.






	 	3.	 	If an Operative Factor is stated to be:






	 	 	 	(a.) “Fixed,” it shall be charged according to the amount agreed upon by the parties,
	 
	 	 	 	(b.) “Not Applicable, no factor applies,
	 
	 	 	 	(c.) “Adjustable,” it shall be applied until adjusted as follows:






	 	 	 	The operative factor is subject to adjustment annually beginning with the second and ending
with the tenth annual computation of the retrospective premium. The National Council on
Compensation Insurance (“NCCI”) publishes a quarterly management summary for the workers
compensation reinsurance pools, entitled “Residual Markets Results Circular,” (“RMR
Circular”) which reflects the results of the immediately previous quarter. For example, the
January RMR Circular reflects results of the quarter ending in September of the previous
year. However, the assessment base for the calendar year will not be available until June
of the following year. Hartford will use the data in the RMR Circular published at
the






 









 













	 	 	 	end of the second quarter for all of the Policy years published in that Circular. Until the
results of a Policy year are published, there will be no adjustment of the estimated
Operative Factor shown in Schedule D.






	 	i.	 	Find the residual market operative factors in the RMR Circular on
the chart entitled “Residual Market Underwriting Results.” Locate the
appropriate factor in the column of that chart labeled “RM State Results.” The
chart will be designated by Policy year as of the effective date of the reported
results. The operative factor is any net operating loss or gain. If there is a
net operating gain, the factor is deemed to be zero. If the operative factor is
negative, this number will be used to calculate the Residual Market load based on
the operative premium base shown in Schedule D.
	 
	 	ii.	 	The operative factor calculated for the tenth annual computation
will be the operative factor used for all subsequent computations.






	 	C.	 	Customer is obligated to pay significant non-premium surcharges and terrorism related
surcharges required by some States. The identification of these surcharges is set forth in
the Schedule of Operations on the Policies.
	 
	 	D.	 	If at any time while this Agreement is in effect, or within five (5) years after its
termination, any claim arises for premium taxes or Assessments which are not otherwise
provided for or contemplated by this Agreement, Hartford shall notify Customer of such
claim and Customer agrees to defend, indemnify and hold harmless Hartford, its affiliates,
and subsidiaries from such taxes and Assessments.
	 
	 	 	 	The indemnities provided under this section shall specifically inure to the benefit of any
affiliate or subsidiary of Hartford that may also be subject to a claim for premium taxes or
Assessments arising out of the amounts paid pursuant to this Agreement.






	VII.	 	Payment of Premiums, Audits and Miscellaneous Charges
	 
	 	 	The Customer shall pay all Premiums under the following terms and subject to Minimum
Premiums. Adjustments in premium or deductible amounts may also result in adjustments in
Miscellaneous Charges, including RMLs, and will be included within Customer’s Obligations
hereunder.






	 	A.	 	Premium and Deposit Installments
	 
	 	 	 	The Customer will pay the sum of the total cash premium and Miscellaneous Charges in
accordance with the installment schedule shown in Schedule A. Installments are paid directly
to Hartford on the same day each month as the day of the month in which the Policy was
effective.
	 
	 	 	 	In the event of a default by Customer of its Obligations under this Agreement, Maximum
Retrospective Premium is due and payable immediately.
	 
	 	B.	 	Audit Adjustments on Premium
	 
	 	 	 	The premiums subject to audit are deposits, subject to Minimum Premiums and adjustment after
Policy expiration according to the Policy terms. This may result in either a return or
additional premium. Hartford will return premium in cash or issue a credit against
Customer’s Obligations or bill Customer
for additional premium, however, in the event of a material deterioration in Customer’s
financial
condition, Hartford reserves the right to retain any return premiums.
	 
	 	C.	 	Retrospective Premium Adjustments
	 
	 	 	 	Adjustments of Net Retrospective Premium will be made according to the provisions of Section
2.C. of
this Agreement and will continue until terminated by Hartford. These adjustments will
result in either a
return or additional premium. Hartford will return premium in cash or issue a credit
against Customer’s Obligations or bill Customer for additional premium. AH additional
premiums are deemed to be an Obligation under this Agreement. In the event of a material
deterioration in Customer’s financial condition, Hartford reserves the right to retain any
return premiums






 









 













	 	D.	 	Premium Loan Plans (Paid Loss Retro)
	 
	 	 	 	If the Policies are subject to a paid loss retrospective rating program, the parties shall
be bound by the
terms of this premium loan plan (the “Premium Loan Plan”), and the Customer shall be
obligated to pay
the Standard Premium by a combination of cash installments and a Premium Loan (“Premium
Loan” or “Loan”) payable to the order of Hartford, its successors or assigns, at its offices
in Hartford, Connecticut. Customer’s payment of losses and expenses according to the monthly
Billing Statement shall constitute payment against the Premium Loan. The amount of the
Premium Loan, identified in Schedule A, is
subject to adjustment at the time of retrospective adjustments taking into consideration
Incurred Losses and Paid Losses. With each adjustment Customer shall execute an amendment
to the Premium Loan establishing the new amount of its Obligation under the Loan.
	 
	 	 	 	At the sole discretion of Hartford, the program will convert to an incurred loss
retrospective rating program. Upon payment of the premium for the final adjustment, the
Loan will be satisfied, whereupon
all adjustment of Incurred Losses will be done periodically as part of the Net Retrospective
Premium.
	 
	 	 	 	The Loan shall be collateralized by Security, according to the terms of this Agreement.
Failure to maintain the Security at the required level set forth on Schedule A shall
constitute a default and, without foregoing any of its other rights upon default, Hartford
shall convert the Paid Loss Plan to an Incurred
Loss Plan.
	 
	 	 	 	The Customer shall have the right to prepay this Loan in whole or in part at any time.
	 
	 	E.	 	Payment






	 	1.	 	Hartford shall periodically issue Customer a Billing Statement for the
following to the extent that
they apply to Customer’s program:






	 	a.	 	Premiums,
	 
	 	b.	 	Miscellaneous Charges,
	 
	 	c.	 	Losses paid on behalf of Customer by Hartford under a retrospectively
rated program, if
	 
	 	 	 	applicable,
	 
	 	d.	 	Additional premium and Miscellaneous Charges resulting from audits and
adjustments,
	 
	 	e.	 	Late charges, if applicable, and,
	 
	 	f.	 	Amounts paid under a deductible plan for losses within a deductible
amount if serviced by the Hartford or amounts billed separately if serviced by a
TPA.






	 	2.	 	All amounts are due and payable as set forth in the Billing Statement. If
balances in full are not received by Hartford within thirty (30) days of the billing
date on a thirty day billing cycle or within
72 hours of the issuance of Hartford’s bill on wire transfer billing Agreement, Customer
will pay Hartford a late charge of one and one-half per cent (1.5%) of the outstanding
bill for each subsequent thirty (30) day period or any part thereof until all balances
due are received by Hartford. Customer shall not pay interest or late charges in excess
of the rate allowed by the laws of the state having jurisdiction.
	 
	 	3.	 	Customer hereby grants Hartford a continuing perfected first security interest
in the Security and in
all return premiums, return surcharge amounts, dividends, and other cash, accounts or
funds which
are now or in the future may come into Hartford’s possession; and Customer hereby directs
Hartford
to hold all sums as security for any Obligations to Hartford, its affiliates and
subsidiaries.
	 
	 	4.	 	Notwithstanding any designation by the Customer as to the allocation or
application of payments
made under this Agreement, all payments received by Hartford from Customer shall first be
allocated






 









 













	 	 	 	to any amounts past due with the earliest billed amounts paid first. Partial
payments will be first allocated to pre-funded or other deductible reimbursement
amounts.






	 	F.	 	Default






	 	1.	 	Customer’s failure to satisfy its Obligations as defined in this Agreement
shall constitute a cross default. Default under either this Agreement or under the
Claim Agreement constitutes default
under the other entitling Hartford to:






	 	a.	 	immediately terminate some or all of Customer’s rights to defer payment
of its Obligations hereunder and declare all Obligations immediately due and
payable. In the event of default, premium and/or deductible loss payments due under
either this Agreement or the Claim Agreement will be equal to Hartford’s estimate of
premium, losses and claim fees developed to their maximum value under the terms of
this program; plus all costs and expenses, including attorney fees for the
enforcement of any Obligations hereunder, including without limitation the fees and
expenses of collection of amounts due; and
	 
	 	b.	 	exercise the right upon such default by Customer to immediately terminate
the deductible provisions of the Policy and this Agreement and bill the Customer for
the otherwise applicable Standard Premium (without application of Deductible Credits
and less amounts previously paid) applicable to such Policy under the rating plans
applicable in the states where exposure exists
under the Policy.






	 	2.	 	Should Customer default in the Obligations under this Agreement, Customer
grants Hartford a perfected security interest in fees paid to Customer by Client
companies for coverage provided by
the Policy. Hartford shall also have the right to collect such fees directly from Client
companies of Customer to the extent of Obligations owing hereunder.
	 
	 	3.	 	Upon default under this Agreement, Hartford is entitled to the following
remedies.
	 
	 	 	 	At its option Hartford may draw all or part of the amount available under Security if
Customer is in default under this Agreement or otherwise as follows:






	 	a.	 	payments are not paid pursuant to their express provisions;
	 
	 	b.	 	Customer has not furnished new or replacement Security as
required;
	 
	 	c.	 	Customer has not furnished a required increase in Security; or
	 
	 	d.	 	Customer has defaulted on any other Obligation, whether under
this Agreement or under
the Claim Agreement, or any other agreement with the Hartford, its affiliates
or subsidiaries.






	 	 	 	In the event of such a draw, Hartford shall deposit the Security proceeds in excess of
Customer’s current Obligations in any bank to be held as Security for Customer’s
Obligations;
	 
	 	4.	 	Unless otherwise prohibited, Hartford may terminate Customer’s insurance
program or any Policy issued thereunder, and cancel or non-renew any certification or
financial responsibility filings made
on Customer’s behalf; and
	 
	 	5.	 	Hartford may pursue any and all legal and equitable rights and remedies
available under applicable law.






 









 










	VIII.	 	Confidentiality
	 
	 	 	Customer hereby undertakes and agrees to retain in confidence, and to require its employees,
consultants, professional representatives, affiliated companies, and agents to retain in
confidence, all Hartford financial and proprietary operational information including
insurance rate classifications, rating methodology, rates
and regulatory information relating to Hartford (the “Confidential Information”) transmitted
to it by Hartford or by its duly authorized agents or representatives and not to permit the
use or disclose any such Confidential Information obtained from or revealed by Hartford or
its duly authorized agents or representatives. Customer hereby agrees that it will not
divulge, disclose, or otherwise communicate such information to any person, firm, or
corporation (except where required by a governmental agency, a regulatory body or agency or
under subpoena) without the prior written approval of Hartford. Hartford also disclaims any
liability arising out of Customer’s use of the Confidential Information and makes no
warranties or representations as to its accuracy and timeliness.
	 
	 	 	Customer acknowledges that the unauthorized disclosure of Confidential Information will cause
irreparable harm to Hartford. Accordingly, Customer agrees that Hartford shall be entitled to
equitable relief including injunction and specific performance (without posting a bond) in
addition to other remedies available at law or in equity for any threatened or actual breach
of this provision.
	 
	IX.	 	Mediation






	 	A.	 	Within one hundred and eighty (180) calendar days after payment is due hereunder,
Customer shall
notify Hartford that it disputes any amount payable under this Agreement and/or the
settlement, adjustment, defense or payment of any claim represented by such billed amount
(“Dispute Notice”). If Customer fails to so notify Hartford, then it shall have waived all
rights to dispute such payment and the settlement, defense, adjustment and payment of any
such claim (“Claim Handling”). Said waiver shall include the waiver of any potential causes
of action sounding in tort or contract for the alleged negligence or bad faith of Hartford
or its affiliates.
	 
	 	 	 	If Customer disputes a billing according to these terms:






	 	1.	 	Customer shall provide Hartford, or the other party, with a brief
statement of the dispute within thirty (30) days of Dispute Notice;
	 
	 	2.	 	Represented by individuals with decision-making authority, the parties
will promptly meet to attempt in good faith to negotiate a resolution;
	 
	 	3.	 	If the parties are unable to negotiate a resolution at said meeting,
the negotiation period shall end, and the parties shall submit the dispute to
mediation in accordance with the commercial
Mediation Rules of the American Arbitration Association and to bear the costs of the
mediation equally;
	 
	 	4.	 	The parties will appoint a mediator within thirty (30) days of the end
of the negotiation period, or else seek assistance from the American Arbitration
Association; and
	 
	 	5.	 	The parties agree to participate in good faith in the mediation and
negotiations.






 









 













	 	B.	 	If any other dispute arises between the parties with reference to the interpretation of this
Agreement or
any of their rights or duties arising under this Agreement, whether before or after its
termination, the
parties hereby agree to use the above procedure to settle such dispute.






	X.	 	Indemnification






	 	A.	 	Hartford agrees to defend, indemnify, and hold harmless Customer for any and all
actions, claims, suits, damages and punitive damages brought against Customer, whether
resolved by judgment or by
settlement, resulting from Hartford’s use of material specifically designated by Customer as
confidential
or proprietary.
	 
	 	B.	 	In addition to other Indemnification Obligations of Customer under this Agreement,
Customer agrees to defend, indemnify, and hold harmless Hartford for any and all actions,
claims, suits, damages and
punitive damages brought against Hartford, whether resolved by judgment or settlement,
resulting from:






	 	1.	 	Customer’s act or omission in the use of confidential or proprietary
information which Hartford provides to Customer, or
	 
	 	2.	 	The imposition of Miscellaneous Charges, including without limitation
Assessments, as provided in this Agreement,
	 
	 	3.	 	Customer certifying Policy coverage not expressly authorized under this
Agreement,
	 
	 	4.	 	Any amounts paid as loss or expense under Policies, certificates or other
representation of insurance coverage issued to Customer’s Clients by Customer, its
employees or agents, in violation of this Agreement.
	 
	 	5.	 	Except for fines and penalties imposed on Hartford for its own negligent acts
or statutory penalties imposed for late payment of claims, fines and penalties imposed
for late reporting of workers’ compensation insurance to state regulatory bodies and
related statutory filings caused by Customer’s failure to report new Clients in
accordance with the requirements of this Agreement.






	 	C.	 	The party seeking indemnification agrees to give the indemnifying party prompt notice
of actions, claims and suits brought or threatened against it. The indemnifying party
shall have the right to participate in or assume, at its expense, the defense of any such
claim or process or settlement thereof and the party
seeking indemnification shall cooperate in said defense. The party seeking indemnification
retains the
right to hire separate counsel to participate in its own defense.
	 
	 	D.	 	In no event shall either party be responsible for any indirect, incidental, special or
consequential
damages. Damages under this Agreement shall be limited to the amount of actual damages
sustained by Hartford or the Customer.






	XI.	 	Definitions






	 	A.	 	General Agreement Definitions
	 
	 	 	 	Agreement means this entire contract, and any exhibits attached hereto.
	 
	 	 	 	Allocated Claim Expenses means expenses not otherwise included as loss that can be
directly allocated
to the handling of a particular claim as the result of; 1) independent medical examinations
and medical reports/records; 2) court costs and fees for service of process; 3) attorneys
and hearing representatives; 4) court reporter services and transcripts; 5) stenographic
services and transcripts; 6) witness fees and expenses; 7) vendor interface charges; 8) bond
premiums; 9) printing costs related to trials and appeals;
10) testimony, opinions, appraisals, reports, surveys, and analyses of professionals and
experts; 11) trial






 









 













	 	 	 	and hearing attendance fees; 12) depositions, video statements, private investigators; 13) a
charge for savings realized by the Customer resulting from services associated with
utilization review, hospital bill audit, provider bill audit; 14) Preferred Provider
Organization utilization charges; 15) case management and vocational rehabilitation
management charges to the extent any portion of these costs are attributable
to Allocated Claim Expenses; 16) alternative dispute resolution fees; 17) protection and
pursuit of subrogation and recovery rights; 18) Special Investigative Unit; and 19) expenses
which are not defined
as loss and are directly related to and directly allocated to the handling of a particular
claim.
	 
	 	 	 	Assessment means any assessment, tax or other charge, whether payment is required by
law or required
as a condition of continued opportunity to service deductible claims or transact insurance
or self-
insurance in the applicable state. This includes but is not limited to Assessments for
participation in any “residual market plan,” guarantee fund, guarantee association or other
facility protecting claimants
against the uncollectibility of insurance or self-insurance proceeds, second injury fund or
state administrative bureau cost. As used herein, “residual market plan” means any plan,
program or facility (whether voluntary or required by law) by which Insurers or
self-insurers share in the risk of providing insurance for eligible employers or insureds.
	 
	 	 	 	Billing Statement means the periodic notice of amounts due to Hartford by Customer.
	 
	 	 	 	Claim Agreement means that contract entered into between Customer and SRS
establishing their respective rights and Obligations pursuant to the handling of claims.
	 
	 	 	 	Client(s) means an entity or entities which have contracted with Customer for the
provision of various employment related services.
	 
	 	 	 	Credit means a clean irrevocable letter of Credit naming Hartford Fire Insurance
Company or one of its designated affiliates or subsidiaries as beneficiary and issued in
accordance with this Agreement
	 
	 	 	 	Effective Dates means the beginning date for the term of this Agreement.
	 
	 	 	 	Incurred Losses means the total of Paid Losses, Unpaid Losses and may also- include
Allocated Claim Expenses for all Covered Claims. Incurred Losses includes expenses for case
management and
vocational rehabilitation management directly allocated to the handling of a particular
claim. Case management and vocational rehabilitation management expenses may be defined as
indemnity losses, medical losses or Allocated Claim Expenses by The National Council on
Compensation Insurance, any state independent rating bureau or any state department of
insurance. (This definition does not apply to losses under retrospective rating plans.
Losses under retrospective rating plans are defined separately)
	 
	 	 	 	Insurance Policies or Policy means the Policy or Policies to which this Agreement
applies.
	 
	 	 	 	Insurance Companies or Insurers means companies that have issued Policies.
	 
	 	 	 	Issuer (Issuing Bank) means the bank which issues the Credit or Substitute Credit.
	 
	 	 	 	Obligations means all debts, liabilities and obligations of the Customer to the
Hartford, its affiliates and subsidiaries of every kind and description, direct or indirect,
absolute or contingent, due or to become
due, now existing or hereafter arising, whether arising under this Agreement, the Claim
Agreement or under any other agreement, document or instrument, or by operation of law or
otherwise, and further including, without limitation, all interest, fees, charges and
expenses incurred by the Hartford, its
affiliates and subsidiaries.






 









 













	 	 	 	Paid Losses means total payments made on Covered Claims for losses and may also
include Allocated Claim Expenses. Paid Losses includes expenses for case management and
vocational rehabilitation management directly allocated to the handling of a particular
claim. Case management and vocational rehabilitation management expenses may be defined as
indemnity losses, medical losses or Allocated Claim Expenses by The National Council on
Compensation Insurance, any state independent rating
bureau or any state department of insurance.
	 
	 	 	 	Security means the Credit, Substitute Credit, Trust Fund, Surety Bond or other
collateral acceptable
to Hartford which Customer provides to or for the benefit of the Hartford to secure its
present and future Obligations to the Hartford, its affiliates and subsidiaries.
	 
	 	 	 	SRS (Specialty Risk Services, Inc.) means the third party administrator that has
contractually agreed to service claims for Customer.
	 
	 	 	 	Substitute Credit means a revised, clean irrevocable letter of credit issued in
substitution for a Credit.
	 
	 	 	 	Trust Fund means the fund account into which Customer places its funds to be held as
Security for Customer’s Obligations to Hartford.
	 
	 	 	 	Trust Participation Agreement means an Agreement between the Hartford, Customer and
trustee to
place money from the Customer in a fund.
	 
	 	 	 	Unmodified Manual Premium means the sum of the premiums under the Policies
calculated by
applying the applicable Hartford filed rates to audited payrolls and adding any charges for
Coverage B premium. Unmodified Manual Premium is prior to the application of any rate
modification program including but not limited to Experience Rating, deductible credits,
Schedule Rating, managed care
credits, safety credits or drug free workplace credits.
	 
	 	 	 	Unpaid Losses or Unpaid Loss Reserves means those reserves established by Hartford
or SRS for
Unpaid Losses and may also include unpaid Allocated Claim Expenses under the Policy. Unpaid
Losses includes expenses for case management and vocational rehabilitation management
directly
allocated to the handling of a particular claim. Case management and vocational
rehabilitation
management expenses may be defined as indemnity losses, medical losses or Allocated Claim
Expenses by The National Council on Compensation Insurance, any state independent rating
bureau or any state department of insurance.
	 
	 	 	 	Wrapped-Up Security means the consolidation of Security requirements for all of the
contracts listed
on Schedule A into a single requirement.
	 
	 	B.	 	The following definitions apply to Retrospective Rating Plans
	 
	 	 	 	Basic Premium means the cost for fixed expenses under the retrospective noted
Policies (“Basic Premium,” “Company Expense,” or “Company Expense Factor”) shall be
calculated as follows:






	 	 	 	(a.) Apply the basic premium rate to the basic premium rating base, or
	 
	 	 	 	(b.) Apply the applicable basic premium percentage to the standard premium.






	 	 	 	Customer agrees to pay an estimated basic premium which will be adjusted after Policy
expiration according to the rate and exposure base exposure base shown in Schedule B.






 









 













	 	 	 	In no event shall the Basic Premium be less than the minimum amount shown in Schedule B.
	 
	 	 	 	Calculation of Net Retrospective Premium: The “Net Retrospective Premium” for all
retrospective Policies for all states shall be determined as follows:
	 
	 	 	 	The sum of:






	 	1.	 	the Basic Premium, and
	 
	 	2.	 	the Loss Limit Premium, and
	 
	 	3.	 	the Converted Losses






	 	 	 	This sum shall then be multiplied by the state tax multiplier. This amount is subject to
the minimum retrospective premium and shall constitute the Net Retrospective Premium.
Miscellaneous Charges (including without limitation “Residual Market Costs”) are added to
the Net Retrospective Premium.
	 
	 	 	 	Converted Losses means the Retrospective Developed Losses multiplied by the
applicable Loss Conversion Factor (“LCF”).
	 
	 	 	 	Incurred Losses shall mean the sum of:






	 	 	 	(a.) all Paid Losses and estimated Unpaid Losses, subject to the loss limitations, and
	 
	 	 	 	(b.) all interest as defined in the Policies, and
	 
	 	 	 	(c.) all premium on bonds paid for by Hartford in accordance with the provisions of the
retrospective
Policies, and
	 
	 	 	 	(d.) Allocated Claim Expenses, as defined herein, and
	 
	 	 	 	(e.) all expenses of seeking recovery against a third party.






	 	 	 	Incurred Losses are limited by the loss limitations.
	 
	 	 	 	Incurred Losses include expenses for case management and vocational rehabilitation
management
directly allocated to the handling of a particular claim. Case management and vocational
rehabilitation management expenses may be defined as indemnity losses, medical losses or
Allocated Claim Expenses by The National Council on Compensation Insurance, any state
independent rating bureau or any state department of insurance.
	 
	 	 	 	Loss Limit Premium The charge for the Loss Limit Premium for Workers’ Compensation,
is the cost
for insurance and allocated loss expenses in excess of the loss limitation. For all other
lines of insurance,
it is only the cost for allocated loss expenses in excess of the loss limitation. The loss limit charge shall
be calculated as follows:






	 	 	 	(a.) Apply the Loss Limit Rate to the Loss Limit Rating Base, or
	 
	 	 	 	(b.) Apply the Loss Limit Percentage to the standard premium.






	 	 	 	Customer agrees to pay an estimated Loss Limit Premium which will be adjusted after Policy
expiration according to the rate and exposure base shown in Schedule B.
	 
	 	 	 	In no event shall the Loss Limit Premium be less than the minimum amount shown in Schedule
B.
	 
	 	 	 	Maximum Retrospective Premium The Maximum Retrospective Premium is equal to the Net
Retrospective Premium calculated using Converted Losses equal to the Basket Maximum
Provision for Loss times the applicable Loss Conversion Factor





 









 













	 	 	 	Minimum Retrospective Premium. The minimum retrospective premium shall be calculated as
follows:






	 	 	 	(a.) apply the applicable minimum premium rate to the rating base, or
	 
	 	 	 	(b.) apply the applicable minimum premium percentage to the standard premium, or
	 
	 	 	 	(c.) use of the formula [(Basic Premium + Loss Limit Premium) X Tax Multiplier].






	 	 	 	In no event shall the minimum retrospective premium be less than the amount shown on
Schedule B.
	 
	 	 	 	Retrospective Developed Losses means Incurred Losses within the loss limitation
multiplied by the applicable retrospective development factor.
	 
	 	 	 	Standard Premium means the premium subject to retrospective rating. It is the sum
of the premiums for the retrospective Policies and their endorsements except for
retrospective premium endorsements,
without the application of premium discount and this Agreement. The Standard Premium
excludes
Excess Premiums and Miscellaneous Charges.






 









 













	XII.	 	General Conditions






	 	A.	 	Except as otherwise provided, all notices shall be in writing and delivered by personal
service or by certified mail, postage prepaid and return receipt requested, to the party at
its address established herein.
	 
	 	B.	 	The rights, duties, and obligations of Customer shall not be assigned, delegated, or
otherwise transferred
in whole or in part without the prior express written consent of Hartford. Hartford may
assign some or all of its rights, duties, and obligations under this Agreement to any of its
“affiliated companies,” which
shall mean a company directly or indirectly controlled by Hartford Fire Insurance Company.
A company
is controlled by the direct or indirect ownership of more than fifty (50%) per cent of the
stock issued and entitled to vote for directors of the company or persons performing a
function similar to that of directors.
	 
	 	C.	 	Hartford may use data concerning Customer’s insurance program to file reports with
governmental or
other regulatory agencies and, without identifying insured or its claimants, to prepare and
disseminate analytical reports.
	 
	 	D.	 	This Agreement supersedes and cancels all prior agreements between the parties relating
to the subject matter hereof and shall not be amended or revised except by a written
supplement signed by all parties.
	 
	 	E.	 	All the rights and duties of the parties arising from or relating in any way to this
Agreement shall be governed, construed and enforced in accordance with the law of the State
of Connecticut, without regard
to principles or rules of conflict of laws. Any legal action brought concerning any issues
or disputes
arising out of this Agreement must be brought exclusively in an appropriate state or federal
court in Connecticut.
	 
	 	F.	 	A waiver of a breach or default under this Agreement shall not be a waiver of any other
previous or subsequent breach or default. The failure or delay by either party to enforce
any term or condition of this Agreement shall not constitute a waiver of such term or
condition unless such term or condition is expressly waived in writing.
	 
	 	G.	 	If any provision of this Agreement shall be held to be invalid, unenforceable or
illegal, the validity, enforceability, and legality of the remaining provisions shall not
in any way be affected or impaired.
	 
	 	H.	 	In any litigation or arbitration between the parties, the prevailing party shall be
entitled to reasonable attorney’s fees and all costs of proceeding incurred in enforcing
this Agreement.
	 
	 	I.	 	This Agreement may be executed in two or more counterparts, each of which shall be an
original, but all
of which shall constitute one Agreement.
	 
	 	J.	 	The headings of sections of this Agreement are inserted for convenience of reference
only and shall not constitute a part hereof. All words or terms used in this Agreement,
regardless of the number or gender
in which they are used, shall be deemed to include any other number and any other gender as
the context may require.






 









 












Schedule A





	a)	 	Estimated Premium Installments (not including Claims Service Fees which are
outlined in the separate Claim Service Agreement)





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Letter of Credit (see notes
	Due	 	Premium	 	Sur-	 	Loss Pre	 	Total	 	and restrictions) (includes
	Date	 	Deposit	 	Charges	 	Funding	 	Installments	 	amounts currently held)
	3/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]
	 	[___]
	4/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	5/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	6/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	7/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	8/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	9/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	10/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	11/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	12/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	1/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	2/1/06

	 	[___]
	 	[___]
	 	 	N/A	 	 	[___]	 	 
	 

	 	$[___]
	 	[___]
	 	$	0	 	 	$[___]
	 	$[___]*







	b)	 	Initial Security Amount: $ [___] Letter of Credit (included in amount currently
held)
	 
	c)	 	Premium Loan for Paid Loss Retrospective Rating Plan : Not Applicable
	 
	d)	 	Basket Maximum Provision for Loss: $ [___]
	 
	 	 	Adjustment basis: Rate of $[___]

Per each dollar of Unmodified Manual Premium, estimated at $[___] all states including

Monopolistic States, subject to a minimum of $[___].
	 
	e)	 	Policies subject to Wrapped-Up Security




This Agreement and the Large Risk Alternative Rating and Insurance Program Agreements and
Claim Agreements between Customer and The Hartford effective: March 1, 2000, March 1, 2001,
March 2, 2002, March 1, 2003, March 1, 2004, March 1, 2005, March 1, 2006, and any
amendments thereto.





 









 












Schedule B




Table of Retrospective Rating Values




	 	 	 	 	 	 	 	 	 	 	 
	RETRO	 	LINE OF	 	FACTOR OR	 	 	 	RATING	 	 
	FACTORS	 	BUSINESS	 	FORMULA	 	RATE	 	BASE	 	MINIMUM
	MINIMUM PREMIUM

	 	WC
	 	See(1) below
	 	Not Applicable
	 	Not Applicable
	 	None
	BASIC PREMIUM

	 	WC
	 	Not Applicable
	 	[___]
	 	See (2) below
	 	$[___]
	LOSS LIMIT 

PREMIUM

	 	WC
	 	Not Applicable
	 	[___]
	 	See (2) below
	 	$[___]
	LOSS 

CONVERSION 

FACTOR

	 	WC
	 	[___]
	 	Not Applicable
	 	Not Applicable
	 	None
	TAX MULTIPLIER

	 	WC
	 	[___]
	 	Not Applicable
	 	Not Applicable
	 	None





Adjustment Basis Legend





	 	(1)	 	[Basic Premium + Loss Limit Premium] x Tax multiplier
	 
	 	(2)	 	Per each dollar of Unmodified Manual Premium in Retro states estimated at $ [___]





 









 












Schedule C




Customer agrees not to accept any of the following in this program without the express
authorization of Hartford:





	1)	 	Contracts, where more than 5% of the total payroll are in codes listed in Hartford Hazard
Groups 8, 9 and 10 that are not otherwise prohibited.
	 
	2)	 	Contracts having any payroll in workers compensation classes listed on Prohibited Class list;
	 
	3)	 	New clients with an experience modification in excess of [___] [___] [change for
2007-08];
	 
	4)	 	New clients with estimated manual premiums (unmodified) over $ [___] .
	 
	5)	 	Contracts with an occupational disease exposure including but not limited to asbestos,
silica, hazardous chemicals or agents;
	 
	6)	 	Contracts with job duties requiring work to be performed over 16 feet from ground level
whether or not scaffolding or other life safety equipment is in use;
	 
	7)	 	Contracts where less than 100% of the workforce is leased





Customer agrees to the following operating guidelines;





	8)	 	You will supply a data file containing year-to-date payrolls by class, state and client
company every three months by the 10th of the following month.
	 
	9)	 	You will notify us of any new or terminated client within 15 days. New client information
will include, at a minimum, Client Name; address; FEIN; payroll by class and state, and any
other information that may be necessary to meet statutory and regulatory compliance. Client
data will be provided in an excel worksheet file or other agreeable electronic format
containing all client changes and policy numbers.
	 
	10)	 	You agree to abide by all rules relating to timely referral of any restricted classes of
business or other restriction outlined in this or any ether document specifying underwriting
restrictions.
	 
	11)	 	All acquisitions will be referred to Hartford. Hartford has the right to restructure/rewrite
the program, refuse such acquisition, and/or restrict inclusion of some classes of employment
from the program.
	 
	12)	 	Hartford reserves the right to update prohibited and referral classes and will notify
Customer of changes as soon as possible. Customer agrees to conform to any subsequently
amended prohibited and referral lists as soon as practical after they are received.
	 
	13)	 	All payrolls will include full payroll of executive officers of Customer’s clients, except
where their voluntary exclusion is permitted under state regulation or law.
	 
	14)	 	Customer agrees to indemnify Hartford, up to the deductible, for all losses under any minimum
premium policy issues by Hartford as an accommodation to customer. Customer will refer all
minimum premium policy requests to Hartford for underwriting and/or binding coverage, Hartford
retains the right of refusal on any new or renewal minimum premium policy request.
	 
	15)	 	Other PEO’s are never permitted as clients under this program, whether or not the exposure
represents all or only a portion of the client base of the other PEO. “Piggy Backing”, joint
ventures, or other techniques to facilitate the inclusion of the exposure of other PEO’s or
leasing companies is EXPRESSLY PROHIBITED.
	 
	16)	 	All clients who are engaged in the temporary employment business must be referred and
approved annually.






 









 












PROHIBITED AND RESTRICTED CLASSES




(applies to new exposure or existing exposures that have not been disclosed or authorized)





	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]






 









 












PROHIBITED AND RESTRICTED CLASSES (cont.)





	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___]
	 
	•	 	[___].




[NEW FOR 2006]





	•	 	[___].




[NEW FOR 2007]





	•	 	[___]:






	 	•	 	[___]
	 
	 	•	 	[___]
	 
	 	•	 	[___]
	 
	 	•	 	[___]






	•	 	[___]:






	 	•	 	[___]
	 
	 	•	 	[___]
	 
	 	•	 	[___]
	 
	 	•	 	[___]
	 
	 	•	 	[___]





 









 












Schedule D

Residual Market Costs




	 	 	 	 	 
	State	 	Operative Premium	 	Operative Factor
	Alabama

	 	Retro Premium
	 	[___]
	Alaska

	 	Retro Premium
	 	[___]
	Arizona

	 	Retro Premium
	 	[___]
	Arkansas

	 	Retro Premium
	 	[___]
	California

	 	Retro Premium
	 	[___]
	Colorado

	 	Retro Premium
	 	[___]
	Connecticut

	 	Retro Premium
	 	[___]
	Delaware

	 	Retro Premium
	 	[___]
	District of Columbia

	 	Retro Premium
	 	[___]
	Florida

	 	Retro Premium
	 	[___]
	Georgia

	 	Retro Premium
	 	[___]
	Hawaii

	 	Retro Premium
	 	[___]
	Idaho

	 	Retro Premium
	 	[___]
	Illinois

	 	Retro Premium
	 	[___]
	Indiana

	 	Retro Premium
	 	[___]
	Iowa

	 	Retro Premium
	 	[___]
	Kansas

	 	Retro Premium
	 	[___]
	Kentucky

	 	Retro Premium
	 	[___]
	Louisiana

	 	Retro Premium
	 	[___]
	Maine

	 	Retro Premium
	 	[___]
	Maryland

	 	Retro Premium
	 	[___]
	Massachusetts

	 	Standard Premium
	 	[___]
	Michigan

	 	Retro Premium
	 	[___]
	Minnesota

	 	Retro Premium
	 	[___]
	Mississippi

	 	Retro Premium
	 	[___]
	Missouri

	 	Retro Premium
	 	[___]
	Montana

	 	Retro Premium
	 	[___]
	Nebraska

	 	Retro Premium
	 	[___]
	Nevada

	 	Retro Premium
	 	[___]
	New Hampshire

	 	Retro Premium
	 	[___]
	New Jersey

	 	Retro Premium
	 	[___]
	New Mexico

	 	Retro Premium
	 	[___]
	New York

	 	Retro Premium
	 	[___]
	North Carolina

	 	Retro Premium
	 	[___]
	North Dakota

	 	Retro Premium
	 	[___]
	Ohio

	 	Retro Premium
	 	[___]
	Oklahoma

	 	Retro Premium
	 	[___]
	Oregon

	 	Retro Premium
	 	[___]
	Pennsylvania

	 	Retro Premium
	 	[___]
	Rhode Island

	 	Retro Premium
	 	[___]
	South Carolina

	 	Retro Premium
	 	[___]
	South Dakota

	 	Retro Premium
	 	[___]
	Tennessee

	 	Retro Premium
	 	[___]
	Texas

	 	Retro Premium
	 	[___]
	Utah

	 	Retro Premium
	 	[___]






 









 












Schedule D

Residual Market Costs




	 	 	 	 	 
	State	 	Operative Premium	 	Operative Factor
	Vermont

	 	Retro Premium
	 	[___]
	Virginia

	 	Retro Premium
	 	[___]
	Washington

	 	Retro Premium
	 	[___]
	West Virginia

	 	Retro Premium
	 	[___]
	Wisconsin

	 	Retro Premium
	 	[___]
	Wyoming

	 	Retro Premium
	 	[___]







 









 










IN WITNESS WHEREOF, the parties hereto have read and agreed to this Agreement and have
directed its execution in duplicate by their respective authorized officers.




	 	 	 	 	 
	 	 	Hartford Fire Insurance Company (“Hartford”)
	 
	 	 	 	 
	 

	 	By
	 	/s/ Kevin M. Finn
	 

	 	 	 	 
	 	 	(Signature) Its Duly Authorized Officer
	 
	 	 	 	 
	 	 	Kevin M. Finn
	 	 	 
	 	 	(Printed/Typed Name)
	 	 	Vice President
	 
	 	 	 	 
	 	 	Authorized by the Office of the Senior Vice-President )






	 	 	 	 	 
	State of Connecticut

	 	 	 	)
	 

	 	)     ss.	 	 
	County of Hartford

	 	 	 	)






     On this 13th day of April, 2007, before me, Linda A. Michaud, the undersigned
officer, personally appeared Kevin M. Finn, who acknowledged him/herself to be Vice President of
Hartford Fire Insurance Company, a corporation, and that he/she, being so authorized by the Office
of the Senior Vice-President, executed the foregoing instrument for the purposes therein contained,
by signing the name of the corporation to said instrument, on behalf of the corporation, by such
authority.



	 	 	 	 	 	 	 
	 

	 	OR
	 	Linda A. Mechaud	 	 
	 

	 	 	 	 	 	 
	Corporate Secretary

	 	 	 	     Notary Public	 	 
	(Corporate Seal)

	 	 	 	     My commission expires on: 8/31/2010
	 	(SEAL)






	 	 	 	 	 
	 	 	Strategic
Outsourcing, Inc.
	 	 	(“Customer”)
	 
	 	 	 	 
	 

	 	By
	 	/s/ Carl Guidice
	 

	 	 	 	 
	 	 	(Signature) Its Duly Authorized Officer
	 
	 	 	 	 
	 	 	Carl Guidice
	 	 	 
	 	 	(Printed/Typed Name)
	 

	 	Title:
	 	CEO
	 

	 	 	 	 





	 	 	 	 	 
	State of North Carolina

	 	 	 	) Charlotte
	 

	 	)     ss.	 	 
	County of

	 	 	 	)






     On this 25th day of April, 2007, before me, Kimberly Kelly the undersigned officer, personally
appeared Carl W. Guidice who acknowledged him/herself to be the CEO a Strategic Outsourcing, a
corporation, and that he/she, as such officer, being so authorized, executed the foregoing
instrument for the purposes therein contained, by signing the name of the corporation to said
instrument, on behalf of the corporation, by such authority of his/her office.



	 	 	 	 	 	 	 
	 

	 	OR
	 	/s/ Kimberly Kelly	 	 
	 

	 	 	 	 	 	 
	Corporate Secretary               Notary Public
	 	 	 	 	 	 
	(Corporate Seal)

	 	 	 	My commission expires on: 9/17/2011
	 	(SEAL)







 









 












DIVIDEND STATEMENT



IT IS UNLAWFUL FOR AN INSURER TO PROMISE THE FUTURE PAYMENT OF
DIVIDEND UNDER AN UNEXPIRED WORKERS’ COMPENSATION POLICY OR TO MISREPRESENT THE
CONDITIONS FOR THE DIVIDEND PAYMENT. DIVIDENDS ARE PAYABLE ONLY PURSUANT TO THE
CONDITIONS DETERMINED BY THE BOARD OF DIRECTORS OR OTHER GOVERNING BOARD OF THE COMPANY
FOLLOWING
POLICY EXPIRATION.



IT IS A MISDEMEANOR FOR ANY INSURER, ITS OFFICER OR AGENT, INSURANCE BROKER OR SOLICITOR
TO PROMISE THE PAYMENT OF FUTURE WORKERS COMPENSATION DIVIDENDS.



Hartford proposes to include all of Customer’s current workers compensation Policies in
its Countrywide Participation Retention Program 7R (“Countrywide Program”). As a
condition of
its Countrywide Program, Hartford Shall Consider Customer’s experience under all
Policies
identified as Participating Polices on the Cover Page.



Historically, Hartford has a consistent record of paying dividends on workers
compensation
polices when earned. Dividends under its Countrywide Program are earned on the basis of
the Standard Premium excluding all surcharges, and Incurred Losses. These losses are
initially
valued as of six (6) months following expiration of the Polices and annually thereafter.
Dividends will only be distributed to customers who agree to promptly reimburse Hartford
for the difference between the Provisional Dividend and the Finally Determined Dividend.



Net Policy Premium is the premium earned under the Polices after the application of
minimum premiums, premium discounts, retrospective rating adjustments, and all
surcharges.



Net Cost is the Sum of the following:



(i) Company Expenses plus a charge for the loss limitation, (ii) Incurred Losses
(iii) claim
expenses, which are calculated by multiplying the Incurred Losses by the Loss Conversion
Factor and (iv) the product of the tax multiplier for premium taxes and other
Assessments times
the total of the sums represented by items i through iii.



Net Cost will include all Residual Market Costs which are defined in this Agreement.



Hartford will subtract the Net Cost from the Net Policy Premium in order to determine
the
dividend amount.



The amount of dividend for all one year programs shall be computed and paid in
accordance with
the following:



Upon Customer’s agreement to reimburse Hartford for the difference between the
provisional
and finally Determined Dividends, Hartford will pay to Customer ONE HUNDRED PERCENT
(100%) of the Provisional Dividend less any previously paid.




Definitions Related to Dividend Statement





 









 













	1.	 	Provisional Dividend means the dividend indicated under this program prior
to calculation
of the Finally Determined Dividend. Losses will be valued as of six (6) months after
expiration of the most recent Policy and annually thereafter.
	 
	2	 	Finally Determined Dividend means the dividend indicated under this program after all
claims are closed but no earlier than fifty-four (54) months following expiration of
the last
Policy.




PAST DIVIDEND DECLARATIONS UNDER THESE PROGRAMS ARE NO GUARANTEE
OF FUTURE DIVIDEND PERFORMANCE.



Policy Numbers *:




And any other policies that are assigned under this agreement






 




			
	*	 	Either policy symbol WBR, WE or WN may be used when assigned




Policy Period:



The Policies listed above are entitled to participate in the distribution of dividends
to the extent determined by the Board of Directors of the Company within The Hartford
Insurance Group
issuing the Policy.



Ultimately only one dividend is payable on each Policy. Hartford’s practice is
to recommend to
the Board of The Hartford Insurance Group approval of a Provisional Dividend based on
Incurred Losses valued as of eighteen months after policy inception, with annual
recalculations
as losses mature until the final determination is made. The amount of the Finally
Determined Dividend for the Policies will be determined when all claims are closed or
the ultimate value of
the Incurred Losses as estimated by Hartford has become fixed.



Normally only a portion of any Provisional Dividend approved by the Boards is payable on
interim calculations. Customer requests Hartford to pay 100% of the current Provisional
Dividend approved on the Policies listed above with the understanding that the
provisional
dividend will be recalculated annually until the final determination is made. The
Finally
Determined Dividend will be determined by the Board of Directors of the issuing company
of
The Hartford Insurance Group when all claims are closed or the ultimate value of the
Incurred
Losses as estimated by The Hartford has become fixed.



Customer agrees that any revision of a Provisional Dividend for the Policies is based on
Incurred Losses as estimated by Hartford. Customer has an obligation to reimburse
Hartford
within thirty days upon notification of the amount due for the difference between all
prior
Provisional Dividend payments and the Finally Determined Dividend.





 









 












THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.




RETROSPECTIVE PREMIUM

ENDORSEMENT — ONE YEAR PLAN




	 	 	 
	Policy Number:

	 	16 WBR J76500
	 
	 	 
	Effective Date:

	 	03/01/2007
	 
	 	 
	Named Insured
and Address:

	 	Strategic Outsourcing, Inc.
5260 Parkway Plaza Blvd.
Suite 140, P.O. Box 241448
Charlotte, NC 28217





Endorsement Number:



Effective hour is the same as stated on the Information Page of the policy.



This endorsement is added to Part Five (Premium) because you chose to have the cost of the
insurance rated retrospectively. This endorsement explains the rating plan and how the
retrospective premium will be determined.



This endorsement applies in the states listed in the Schedule. It determines the retrospective
premium for the insurance provided during the rating plan period by this policy and any policy
listed in the schedule. The rating plan period is the one-year period beginning with the effective
date of this endorsement.



The amount of retrospective premium depends on five standard elements and two elective elements.





	A.	 	Retrospective Premium Standard Elements
	 
	 	 	The five standard elements are explained here.






	 	1.	 	Standard premium is the premium we would charge during the rating plan period if you
had not chosen retrospective premium rating, but with two exceptions. Standard premium
does not include the expense constant charge or the premium discount credit.
	 
	 	2.	 	Basic premium is less than standard premium. It is standard premium multiplied by a
percentage called the basic premium factor. The
basic premium factor varies depending on the total amount of standard premium. The Schedule
shows a range of basic premium
factors for differing amounts of estimated Standard premium. The actual basic premium factor
will be determined after the standard premium is determined. If earned standard premium is
not within the range of the estimated standard premiums shown in the Schedule, the basic
premium will be recalculated.
	 
	 	3.	 	Incurred losses are all amounts we pay or estimate we will pay for losses, interest on
judgments, expenses to recover against third parties, and employers liability loss
adjustment expenses.
	 
	 	4.	 	A converted loss is an incurred loss multiplied by a percentage called the loss
conversion factor. The loss conversion factor is shown in the Schedule.
	 
	 	5.	 	Taxes are a part of the premium we collect. Taxes are determined as a percentage of
basic premium and converted losses. The percentage is called the tax multiplier. It
varies by state and by Federal and non-Federal classifications. The tax multipliers are
shown in the Schedule.






	B.	 	Retrospective Premium Elective Elements
	 
	 	 	Two other elements are included in retrospective premium if you elected to include them. They
are the excess loss premium for the loss limitation and the retrospective development premium.
They are explained here.





Form WC 00 05 03A     Printed in the U.S.A.




Page 1 of 4









 








	 	1.	 	The election of a loss limitation means that the amount of incurred loss to be included
in the retrospective premium is limited to an amount called the loss limitation. The loss
limitation applies separately to each person who sustains bodily injury by disease and
separately to all bodily injury arising out of any one accident.
	 
	 	 	 	The charge for this loss limitation is called the excess loss premium. Excess loss premium
is a percentage of standard premium multiplied by the loss conversion factor. The
percentage is called the excess loss premium factor. Taxes are added to excess loss premium
just as they are for other elements of retrospective premium.
	 
	 	 	 	Excess loss premium factors vary by state, by classification, and by the amount of the loss
limitation. If you chose this elective element, the loss conversion factor, the loss
limitation, the excess loss premium factors, and the states where they apply are shown in
the Schedule.
	 
	 	2.	 	The retrospective development element is used to help stabilize premium adjustments.
The premium for this element is charged with the first three calculations of retrospective
premium, and is called the retrospective development premium. It is a percentage of
standard premium multiplied by the loss conversion factor. The percentage of standard
premium is called the retrospective development factor. Taxes are added to retrospective
development premium just as they are for other elements of retrospective premium.
	 
	 	 	 	Retrospective development factors vary by state, by electing a loss limitation, and by
first, second, and third calculations of retrospective premium. If you chose this elective
element the retrospective development factors are shown in the Schedule.






	C.	 	Retrospective Premium Formula
	 
	 	 	Insurance policies listed in the Schedule will be combined with this policy to calculate the
retrospective premium. If the policies provide insurance for more than one insured, the
retrospective premium will be determined for all insureds combined, not separately for each
insured.






	 	1.	 	Retrospective premium is the sum of basic premium, converted losses, and taxes, plus the
excess loss premium and retrospective development premium elective elements if you chose
them.
	 
	 	2.	 	The retrospective premium will not be less than the minimum nor more than the maximum
retrospective premium. The minimum and maximum retrospective premiums are determined by
applying the minimum and maximum factors shown in the Schedule to the standard premium.
	 
	 	3.	 	If this endorsement applies to more than one policy or state, the standard premium will
be the sum of the standard premiums for each policy and state.






	D.	 	Premium Calculations and Payments






	 	1.	 	We will calculate the retrospective premium using all loss information we have as of a
date six months after the rating plan period ends and annually thereafter. We will have
the calculation verified by the appropriate rate service organization at your request.
	 
	 	 	 	We may make a special valuation of the retrospective premium as of any date that you are
declared bankrupt or insolvent, make an assignment for the benefit of creditors, are
involved in reorganization, receivership, or liquidation, or dispose of all your interest in
work covered by the insurance. You will pay the amount due us if the retrospective premium
is more than the total standard premium as of the special valuation date.
	 
	 	2.	 	After a calculation of retrospective premium, you and we may agree that it is the final
calculation. No other calculation will be made unless there is clerical error in the final
calculation.
	 
	 	3.	 	After each calculation of retrospective premium, you will pay promptly the amount due
us, or we will refund the amount due you. Each insured is responsible for the payment of
all standard premium and retrospective premium calculated under this endorsement.





Form WC 00 05 03A     Printed in the U.S.A.




Page 2 of 4









 








	E.	 	Work in Other States
	 
	 	 	If any of the policies provide insurance in a state not listed in the Table of States, and if
you begin work in the state during the rating plan period, this endorsement will apply to that
insurance if this rating plan applies in that state on an interstate basis. The retrospective
premium standard elements, and the elective elements you chose, will be determined by our
manuals for that state, and added to the Schedule by endorsement.
	 
	F.	 	Cancellation






	 	1.	 	If any insurance subject to this endorsement is canceled, the effective date of
cancellation will become the end of the rating plan period for all insurance subject to
this endorsement unless we agree with you, by endorsement, to continue the rating plan
period.
	 
	 	2.	 	If we cancel for nonpayment of premium, the maximum retrospective premium will be based
on the standard premium for the rating plan period, increased pro rata to 365 days.
	 
	 	3.	 	If you cancel, the standard premium for the rating plan period will be increased by our
short rate table and procedure. This short rate premium will be the minimum retrospective
premium and will be used to determine the basic premium.
	 
	 	 	 	The short rate premium will be used to determine the excess loss premium and retrospective
development premium if you chose these elective elements.
	 
	 	 	 	The maximum retrospective premium will be based on the standard premium for the rating plan
period, increased pro rata to 365 days.
	 
	 	4.	 	Section F.3. will not apply if you cancel because:






	 	a.	 	all work covered by the insurance is completed.
	 
	 	b.	 	all interest in the business covered by the insurance is sold; or,
	 
	 	c.	 	you retire from all business covered by the insurance.





Form WC 00 05 03A     Printed in the U.S.A.




Page 3 of 4









 







SCHEDULE





	1.	 	Other policies subject o this Retrospective Premium Endorsement
	 
	2.	 	Loss Limitation     1,000,000
	 
	3.	 	Loss Conversion Factor     [___]
	 
	 	 	Minimum Retrospective Premium Factor     (B+ELOP)TM
	 
	 	 	Maximum Retrospective Premium Factor     [___]
	 
	4.	 	The basic premium factors shown here are based on estimates of standard premium. If the
actual standard premium is within the range of estimated standard premiums shown here, the
basic premium factor will be obtained by linear interpolation to the nearest one-tenth of 1%.
If the actual standard premium is not within the range of estimated standard premiums, the
basic premium factor will be recalculated.





	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	50%	 	100%	 	150%	 	 
	 

	 	 	 	 
	 	 
	 	 	 	 
	Estimated standard premium:

	 	 	 	[___]
	 	[___]
	 	[___]	 	 
	Basic premium factor:

	 	 	 	[___]
	 	[___]
	 	[___]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 






	5.	 	The tax multipliers, excess loss premium factors, and retrospective development factors, and
the states where they apply, are shown in the Table of States.





TABLE OF STATES




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Excess Loss Premium Factors	 	Tax Multiplier	 	Retrospective
	 	 	State	 	Federal	 	State	 	Federal	 	Development
	 	 	(Other than	 	(“F” Classes	 	(Other than	 	(“F” Classes	 	Factors
	State	 	“F” Classes)	 	Only)	 	“F” Classes)	 	Only)	 	1st	 	2nd	 	3rd
	FL

	 	[___]
	 	 
	 	[___]
	 	 
	 	 
	 	 
	 	 
	OR

	 	[___]
	 	 	 	[___]	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 





	 	 	 
	Countersigned by:

	 	 
	 

	 	 
	 

	 	Authorized Representative




This endorsement acknowledged and accepted by the Insured:




	 	 	 	 	 
	/s/ Carl Guidice

	 	CEO
	 	3/20/07
	 
	(Signature of Authorized Officer)

	 	(Title)
	 	(Date)






Form WC 00 05 03A     Printed in the U.S.A.




Page 4 of 4









 











THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.




NEW JERSEY RETROSPECTIVE PREMIUM ENDORSEMENT

LARGE RISK ALTERNATIVE RATING OPTION

ONE YEAR RATING PERIOD




	 	 	 
	Policy Number:

	 	16 WBR J76500
	 
	 	 
	Effective Date:

	 	03/01/2007
	 
	 	 
	Named Insured
and Address:

	 	Strategic Outsourcing, Inc.
5260 Parkway Plaza Blvd.
Suite 140, P.O. Box 241448
Charlotte, NC 28217





Endorsement Number:



Effective hour is the same as stated on the Information Page of the policy.



This endorsement is added to Part Five (Premium) because you chose to have the
cost of the insurance rated retrospectively. This endorsement describes the rating option for the
insurance provided during the rating period by this policy and any other policy listed
in the Schedule. The rating period is the one-year period beginning with the effective date of the
policy to which this endorsement is attached.





	A.	 	Retrospective Premium Elements
	 
	 	 	The amount of retrospective premium depends on one or more of the six premium elements, as
agreed upon by the insured and the carrier.






	 	1.	 	Standard premium
	 
	 	2.	 	Basic premium
	 
	 	3.	 	Incurred losses
	 
	 	4.	 	Converted losses
	 
	 	5.	 	Taxes
	 
	 	6.	 	Excess loss premium, if loss limitation was elected






	B.	 	Retrospective Premium Formula
	 
	 	 	Insurance policies listed in the Schedule will be combined with this policy to calculate the
retrospective premium.






	 	1.	 	Retrospective premium is the sum of basic premium, converted loses and taxes, plus the
excess loss premium elective element if you
chose it, or the retrospective premium is as described in the Addendum referred to in item
7 of the Schedule.
	 
	 	2.	 	The retrospective premium will not be less than the minimum nor more than the
maximum retrospective premium. The minimum and maximum retrospective premiums are
determined by the minimum
and maximum factors shown in the Schedule, or by the information in the Addendum
referred to in item 7 of the Schedule.
	 
	 	3.	 	If this endorsement applies to more than one policy, all such policies will be used to
determine the minimum and maximum retrospective premiums.






	C.	 	Premium Calculations and Payments






	 	1.	 	We will calculate the retrospective premium using all loss information we have as of a
date six months after the rating period ends and annually thereafter. We will have the
calculation reviewed by the Compensation Rating and Inspection Bureau at your request.
	 
	 	 	 	We may make a special valuation of the retrospective premium as of any date that you are
declared bankrupt or insolvent, make an assignment for the benefit of creditors, are
involved in reorganization, receivership, or





Form WC 29 05 13B     Printed in the U.S.A.




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	C.	 	Premium Calculations and Payments (CONT’D)






	 	 	 	liquidation, or dispose of all your interest in work covered by the insurance. You will pay
the amount due us if the retrospective premium is more than the total standard premium as of
the special valuation date.
	 
	 	2.	 	After a calculation of retrospective premium, you and we may agree that it is the final
calculation. No other calculation will be made except where:






	 	a.	 	Loss values are included or excluded through mistake other than error of
judgment.
	 
	 	b.	 	The claimant has recovered in an action against a third party.
	 
	 	c.	 	The claim has been officially dismissed by judicial or appropriate departmental
ruling as non-compensable, or for lack of prosecution where the statute of
limitations has expired.
	 
	 	d.	 	The statute of imitations has expired and the claim has been closed with no
payment other than medical.
	 
	 	e.	 	The settlement has been approved in accordance with R.S.N.J. 34:15-20 of the
New Jersey Workers’ Compensation Law where the issue involves question of jurisdiction,
liability, causal relationship or dependency of the petitioner.
	 
	 	f.	 	The claim valued on a life pension basis has been settled on a basis other than
a life pension.
	 
	 	g.	 	The standard premium has been revised.






	 	3.	 	After each calculation of retrospective premium, you will pay promptly the amount due
us, or we will refund the amount due you. Each insured is responsible for the payment of
all retrospective premium calculated under this endorsement. The surcharges for the Second
Injury Fund and Uninsured Employers Fund and the premium charge for the expense constant
are not part of retrospective premium but are included in the total cost of the coverage
provided by the policy to which this endorsement is attached.






	D.	 	Cancellation






	 	1.	 	If any insurance subject to this endorsement is canceled, the effective date of
cancellation will become the end of the rating period for all insurance subject to this
endorsement.
	 
	 	2.	 	If we cancel, the retrospective premium will be determined according to the other
provisions of this endorsement, except that if we cancel because of nonpayment of premium,
the maximum retrospective
premium will be based on the standard premium for the rating period, increased pro rata to
365 days.
	 
	 	3.	 	If you cancel, the standard premium for the rating period will be increased by our
short
rate table and procedure. This short rate premium will be the minimum retrospective premium
and will be used to determine the basic premium.
The short rate premium will be used to determine the excess loss premium if you chose this
elective element.
The maximum retrospective premium will be based on the standard premium for the rating
period, increased pro rata to 365 days.
	 
	 	4.	 	Section D.3. will not apply if you cancel because:






	 	a.	 	You have retired from or completed all the work covered by the policy, or your
business has ceased to exist.
	 
	 	b.	 	All your business entities covered by the policy moved out of New Jersey or
have been sold.
	 
	 	c.	 	You agreed with us that we would replace the canceled policy without lapse with
a new policy subject to retrospective rating.





Form WC 29 05 13B     Printed in the U.S.A.




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SCHEDULE



As Agreed Upon by the Insured And
the Carrier, the Retrospective Premium
Elements are included below or in the
Addendum referred to in Item 7 of this
Schedule.





	1.	 	Tax Multiplier     [___]
	 
	2.	 	Loss Conversion Factor     [___]
	 
	3.	 	Hazard Group     [___]
	 
	4.	 	Loss Limitation:     $1M
	 
	 	 	Excess Loss Factor     [___]
	 
	5.	 	Other policies subject to this endorsement                                                                 
	 
	6.	 	The basic premium factors shown below are based on estimates of standard premium. If the actual standard
premium is within the range of estimated standard premiums, the basic premium factor will be obtained by
linear interpolation. If the actual standard premium is not within the range of estimated premiums, the
basic premium factor will be recalculated.
	 
	7.	 	For information supplementary to the Schedule, see the Addendum (Form # ___) attached to the
Notice of Election of Retrospective Rating for the insured.





	 	 	 	 	 	 	 
	 	 	50%	 	100%	 	150%
	Estimated Standard Premium
	 	$  [___]
	 	$  [___]
	 	$  [___]
	Minimum Premium Factor
	 	    (B+ELP)TM	 	    (B+ELP)TM	 	    (B+ELP)TM
	Maximum Premium Factor
	 	    [___]	 	    [___]	 	    [___]
	Basic premium Factor
	 	    [___]	 	    [___]	 	    [___]





This endorsement acknowledged and accepted by the Insured:




	 	 	 	 	 
	/s/ Carl Guidice

	 	CEO
	 	3/20/07
	 
	(Signature of Authorized Officer)

	 	(Title)
	 	(Date)






	 	 	 
	Countersigned by:

	 	 
	 

	 	 
	 

	 	Authorized Representative





Form WC 29 05 13B     Printed in the U.S.A.




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THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.




TEXAS RETROSPECTIVE PREMIUM ENDORSEMENT

LARGE RISK ALTERNATIVE RATING OPTION




	 	 	 
	Policy Number:

	 	16 WBR J79226
	 
	 	 
	Effective Date:

	 	03/01/2007
	 
	 	 
	Named Insured
and Address:

	 	Strategic Outsourcing, Inc.
5260 Parkway Plaza Blvd.
Suite 140, P.O. Box 241448
Charlotte, NC 28217





Endorsement Number:



Effective hour is the same as stated on the Information Page of the policy.



This endorsement changes the policy effective on the inception date of the policy unless
another date is indicated below.



This endorsement is added to Part Five (Premium) because you chose to have the cost of the
insurance rated retrospectively by the Large Risk Alternative Rating Option. This endorsement
explains the rating plan and how the retrospective premium will be determined.



This endorsement applies only to Texas workers compensation and employers liability insurance. It
determines the retrospective premium for the insurance provided during the rating plan period by
this policy and any policy listed in the Schedule. The
rating plan period is either the one-year period or three-year period beginning with the effective
date of this endorsement.



The amount of retrospective premium depends on five standard elements and one elective element.





	A.	 	Retrospective Premium Standard Elements






	 	1.	 	Standard premium is the premium we would charge during the rating plan period if you
had not chosen retrospective premium
rating, but with two exceptions. Standard premium does not include the expense constant
charge or the premium discount credit.
	 
	 	2.	 	Basic premium is less than standard
premium. It is standard premium multiplied by a percentage called the basic premium
factor. The basic premium factor varies depending on the total amount of standard
premium. The Schedule shows a range of basic premium factors for differing amounts of
estimated standard premium. The actual
basic premium factor will be determined
after the standard premium is determined. If earned standard premium is not within the
range of the estimated standard premiums shown in the Schedule, we will recalculate
the basic premium factor, but in no event will the recalculated factor be less than the
factor shown at the 50% level or greater
than the factor shown at the 150% level.
	 
	 	3.	 	Incurred losses are all amounts we pay or estimate we will pay for losses, interest on
judgments, expenses to recover against
third parties, and employers liability loss adjustment expenses.
	 
	 	4.	 	A converted loss is an incurred loss
multiplied by a percentage called the loss conversion factor. The loss conversion
factor is shown in the Schedule.
	 
	 	5.	 	Taxes are a part of the premium we collect. Taxes are determined as a percentage of
basic premium and converted losses. The percentage is called the tax multiplier. The
tax multiplier is shown in the Schedule.






	B.	 	Retrospective Premium Elective Element
	 
	 	 	One other element is included in retrospective premium if you elected to include it. It is the
excess loss premium for the loss limitation. It is explained here.





Form WC 42 05 16     Printed in the U.S.A.




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	 	 	 	The election of a loss limitation means that the amount of incurred loss to be included in
the retrospective premium is limited to an amount called the loss limitation. The loss
limitation applies separately to each person who sustains bodily injury by disease and
separately to all bodily injury arising out of any one accident.
	 
	 	 	 	The charge for this loss limitation is called excess loss premium. Excess loss premium is a
percentage of standard premium multiplied by the loss conversion factor. The percentage is
called the excess loss premium factor. Taxes are added to excess loss premium just as they
are for other elements of retrospective premium.
	 
	 	 	 	If you chose this elective element, the loss limitation and the excess loss premium factor
are shown in the Schedule.






	C.	 	Retrospective Premium Formula
	 
	 	 	Insurance policies listed in the Schedule, this policy, and the renewals of each during the
rating plan period will be combined to calculate the retrospective premium. If the policies
provide insurance for more than one insured, the retrospective premium will be determined for
all insureds combined, not separately for each insured.






	 	1.	 	Retrospective premium is the sum of basic premium, converted losses, and taxes, plus
the excess loss premium elective element if you chose it.
	 
	 	2.	 	The retrospective premium will not be less than the minimum nor more than the
maximum retrospective premium. The minimum and maximum retrospective premiums are
determined by applying the minimum and maximum factors shown in the Schedule to the standard
premium.
	 
	 	3.	 	If this endorsement applies to more than one policy, the standard premium will be the
sum of the standard premiums for each policy.






	D.	 	Premium Calculations and Payments






	 	1.	 	We will calculate the retrospective premium using all loss information we have as of a
date six months after the rating plan period ends and annually thereafter. We will have
the calculation verified by the Texas Department of Insurance at your request.
	 
	 	 	 	We may make a special valuation of the retrospective premium as of any date that
you are declared bankrupt or insolvent,
make an assignment for the benefit of creditors, are involved in reorganization,
receivership, or liquidation, or dispose of all your interest in work covered by the
insurance. You will pay the amount due us if
the retrospective premium is more than the total standard premium as of the special
valuation date.
	 
	 	 	 	We will make interim calculations of retrospective premium for the first year and
the first two years of a three-year rating plan period unless we and you agree not to make
interim calculations. We will use all loss information we have as of a date six months
after the end of each of these periods.
	 
	 	2.	 	After a calculation of retrospective
premium, other than interim calculations, you and we may agree that it is the final
calculation. No other calculation will be
made unless there is clerical error in the
final calculation.
	 
	 	3.	 	After each calculation of retrospective premium, you will promptly pay the amount due
us, or we will refund the amount due
you. Each insured is responsible for the payment of all standard premium and retrospective
premium calculated under this endorsement.






	E.	 	Work in Other States
	 
	 	 	If this policy, or any policy listed in the
Schedule, or any policy issued during the rating plan period and not listed in the Schedule,
provides insurance in another state, this endorsement will not apply in that state.
	 
	F.	 	Cancellation






	 	1.	 	If any insurance subject to this endorsement
is canceled or not renewed (three-year plan), the effective date of cancellation or
nonrenewal will become the end of the
rating plan period for all insurance subject to this endorsement unless we agree with you,
by endorsement, to continue the rating plan period.
	 
	 	2.	 	If we cancel for nonpayment of premium, the maximum retrospective premium will be
based on the standard premium for the
rating plan period, increased pro rata to
either 365 days for a one-year plan or 1095 days for a three-year plan.

	 
	 	3.	 	If you cancel or do not renew, the standard premium for the
rating plan period will be increased by our short rate table and procedure. This short rate premium will be







Page 2 of 3









 








	 	 	 	the minimum retrospective premium and
will be used to determine the basic
premium, and excess loss premium if you chose this elective element.
	 
	 	 	 	The maximum retrospective premium will be based on the standard premium for the
rating plan period, increased pro rata to
either 365 days for a one-year plan or 1095 days for a three-year plan.
	 
	 	4.	 	Section F.3. will not apply if you cancel because:






	 	a.	 	all work covered by the insurance is completed;
	 
	 	b.	 	all interest in the business covered by
the insurance is sold; or
	 
	 	c.	 	you retire from all business covered by
the insurance.





SCHEDULE





	1.	 	Term of Plan:          þ     One Year          o     Three Year
	 
	2.	 	Other policies subject to this Retrospective Premium Endorsement                                                                 
	 
	3.	 	Loss Limitation:     $1,000,000
	 
	4.	 	Excess Loss Premium Factor     [___]
	 
	5.	 	Loss Conversion Factor     [___]
	 
	6.	 	Tax Multiplier     [___]
	 
	7.	 	Maximum Premium Factor     [___]
	 
	 	 	Minimum Premium Factor     (B+ELP)TM
	 
	8.	 	The basic premium factors shown here are based on estimates of standard premium. If the actual standard
premium is within the range of estimated standard premiums shown here, the basic premium factor will be
obtained by linear interpolation to the nearest one-tenth of 1%. If the actual standard premium is not within
the range of estimated standard premiums, the basic premium factor will be recalculated.





	 	 	 	 	 	 	 
	 	 	50%	 	100%	 	150%
	 
	 	 	 	 	 	 
	Estimated Standard Premium

	 	[___]
	 	[___]
	 	[___]
	 
	 	 	 	 	 	 
	Basic Premium Factor

	 	[___]
	 	[___]
	 	[___]






	 	 	 
	Countersigned by:

	 	 
	 

	 	 
	 

	 	Authorized Agent




This endorsement acknowledged and accepted by the Insured:




	 	 	 	 	 
	/s/ Carl Guidice

	 	CEO
	 	3/20/07
	 
	(Signature of Authorized Officer)

	 	(Title)
	 	(Date)






Form WC 42 05 16     Printed in the U.S.A.





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