Document:

Prepared by R.R. Donnelley Financial -- Interm Service Agreement

  
 Exhibit 10.19 
  
 INTERIM SERVICE AGREEMENT 
  
 Agreement dated as of the 10th day of October, 2001 (the
“Agreement”), among Staff Leasing, Inc. (d/b/a Gevity HR), a Florida corporation (the “Company”) and James F. Manning (the “Executive”). 
  
 WITNESSETH 
  
 WHEREAS, the Company has terminated the service of Chairman of the Board and Chief
Executive Officer, Michael K. Phippen, but has not yet hired a replacement; and 
  
 WHEREAS, the Company wishes to engage the
services of the Executive for the interim period provided in this Agreement and the Executive wishes to provide interim services to the Company for such period, on the terms and conditions set forth herein; 
  
 NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto
agree as follows: 
  
 1.    Services. The Company hereby agrees to engage the services of the Executive,
and Executive hereby agrees to serve as interim Chairman of the Board and Chief Executive Officer of the Company, subject to the terms and conditions of this Agreement, during the period commencing on October 10th, 2001 (“Commencement
Date”) and continuing for at least six (6) months (the “Initial Period”), subject to earlier termination as herein provided, with the option of renewal for up to a period of time totaling one (1) year from the Commencement Date
(“Renewal Period”) upon the request of the Company agreed to by the Executive. In order to exercise its renewal option, the Company must give the Executive notice thereof at least ten business days before the expiration of the Initial
Period (or before the expiration of any previous portion of the Renewal Period for which this Agreement was extended). Such notice shall specify the period through which the Company requests renewal. The Executive shall promptly advise the Company
whether he agrees to such renewal request. 
  
 2.    Duties and Responsibilities. 

 
 (a)    During the Initial Period and any Renewal Period, Executive shall devote his business time, attention and best
efforts to the business of the Company, and shall use Executive’s best efforts to perform faithfully and efficiently Executive’s duties and responsibilities as set forth below. Executive shall not, without the consent of the Company, be
actively engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage. 
  
 (b)    Executive hereby agrees to serve, upon the terms and conditions herein contained, as Chairman of the Board and Chief Executive Officer of the Company. Executive shall report directly to the
Board of Directors of the Company (the “Board”). Executive shall have those powers and perform such services and duties for the Company consistent with his positions as Chairman of the Board and Chief Executive Officer, which shall
include, without 
 limitation, the power of supervision and control over and responsibility for the general management and operation of the Company. 
  
 3.    Compensation. 
  
 (a)    Base Salary. During the Initial Period and any Renewal Period, Executive shall be paid a monthly salary, in cash, of $75,000. The salary shall be payable in accordance with the
Company’s regular payroll practices. 
  
 (b)    Reimbursement of Expenses. During the Initial
Period and any Renewal Period, the Company shall reimburse Executive in accordance with Company policies for all expenses reasonably and actually incurred by Executive in the performance of Executive’s duties hereunder. 

  
 (c)    Non-Entitlement of Benefits. Executive acknowledges that he
shall not be entitled to any benefits, nor shall Executive be granted any options to purchase common stock of the Company during the term of the Agreement. 
  
 4.    Termination of Service During the Initial Period. 
  
 (a)    Death or Disability. This Agreement shall terminate upon Executive’s death. The Company may terminate Executive’s service for Disability. For purposes of this Agreement, “Disability”
shall mean the failure of Executive due to mental or physical illness to substantially perform his duties on a full-time basis. 
  
 (b)    Cause. During the Initial Period or any Renewal Period, the Company may terminate Executive’s service for Cause. For purposes of this Agreement, “Cause” shall mean: 
  
 (i) the willful and continued failure by Executive to perform substantially Executive’s duties with the Company (other than any
such failure resulting from Executive’s incapacity due to physical or mental illness); or 
  
 (ii) gross
negligence or willful misconduct by Executive in the execution of Executive’s professional duties; or 
  
 (iii) conviction of Executive of, or a plea by Executive of nolo contendere to, a felony; or 
  
 (iv) a
material breach by Executive of this Agreement; or 
  
 (v) any misuse, misappropriation or embezzlement by
Executive of funds or property belonging to the Company or any of its affiliates; or 
  
 (vi) use of alcohol or
drugs which either interferes with the performance of Executive’s duties hereunder or compromises the integrity and reputation of the Company, its affiliates, their employees or its investments. 
  
 Upon a termination for Cause, the Executive shall be entitled to no further compensation under this Agreement. 
  
         (c)    Termination Upon Employment of Successor. If the Company employs a
person who shall be elected to either of the offices of Chairman of the Board or Chief Executive Officer during the Initial Period, the Company may, at its option, terminate the services of the Executive upon payment to him of the remaining
compensation due him for the balance of the Initial Period. 
  
 5.    Termination During the Renewal
Period. The services of the Executive may be terminated at any time, at the option of the Company, during the Renewal Period. Any termination of the Executive during the Renewal Period shall be effected by a written notice of termination, given
in accordance with this Agreement, which specifies the termination date and which must be received by the Executive at least ten (10) days prior to the intended termination date. Upon such termination, the Executive shall be paid any accrued but
unpaid compensation due hereunder through the end of the month in which the termination date occurs and any unpaid reimbursement of expenses due hereunder. 
  
 6.    Restrictive Covenants. 
  
         (a)    Confidential Information. In the course of involvement in the Company’s activities or otherwise, Executive has obtained and may obtain confidential
information concerning the Company’s businesses, operations, financial affairs, organizational and personnel matters, policies, procedures and other non-public matters, and those of third parties. Such information (“Confidential
Information”) may have been or be provided in written form or orally. All such Confidential Information has been and will be provided subject to Executive’s continuing obligation to use and protect the Confidential Information. In order to
induce, and in consideration of, the provision to Executive of Confidential Information, as a condition to its continued receipt by Executive, and
 
 

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without prejudice to or limitation on any other confidentiality obligations imposed by agreement or by law, Executive undertakes to use Confidential Information, whenever provided, in accordance
with any restrictions placed by the Company on its use or disclosure. Without limiting the foregoing, except as authorized by the Company or as required by law, Executive may disclose or allow disclosure of any Confidential Information, or of any
information derived therefrom, in whatever form, only to a person who is then a director, officer, employee attorney or agent of the Company and who, in Executive’s reasonable good faith judgment, has a need to know the Confidential Information
or information derived therefrom in furtherance of the business the Company. The foregoing obligations will survive, and remain binding and enforceable notwithstanding the expiration of the Initial Period or any Renewal Period, any termination of
Executive’s service or any settlement of the financial rights and obligations arising from Executive’s service. 
  
         (b)    Non-Solicitation of Employees. During the Initial Period and any Renewal Period, Executive agrees that Executive will not, in any manner, directly or
indirectly, solicit any person who is an employee of the Company and is employed either: (i) as a director or in a managerial or in any skilled or technical capacity; or (ii) who is in possession of Confidential Information and with whom the
Executive had business dealings in the course of Executive’s service, to apply for or accept service with any Competitive Enterprise. The term “Solicit” as used in this paragraph means any communication of any kind whatsoever,
regardless of by whom initiated, inviting, encouraging or requesting any employee of the Company to take or refrain from taking any action. 
  
         (c)    Non-Solicitation of Clients. During the Initial Period and any Renewal Period, Executive agrees that Executive will not, in any manner,
directly or indirectly: (i) solicit by mail, by telephone, by personal meeting or by any other means, either directly or indirectly, any client of the Company to whom Executive provided services, or for whom Executive transacted business, or whose
identity became known to Executive in connection with Executive’s service with the Company to transact business with a Competitive Enterprise or reduce or refrain from doing any business with the Company; or (ii) interfere with or damage (or
attempt to interfere with or damage) any relationship between the Company and any such client. The term “Solicit” as used in this paragraph means any communication of any kind whatsoever, regardless of by whom initiated, inviting,
encouraging or requesting any client or prospective client to take or refrain from taking any action. 
  
 7.    Injunctive Relief; Submission to Jurisdiction. 
  
         (a)    Executive acknowledges that a violation on Executive’s part of any of the covenants contained in Section 6 hereof would cause immeasurable and irreparable
damage to the Company in an amount that would be material but not readily ascertainable, and that any remedy at law would be inadequate. Accordingly, and notwithstanding the provisions of Section 7(b), Executive agrees that the Company shall be
entitled (without the necessity of showing economic loss or other actual damage) to injunctive relief in any court of competent jurisdiction for any actual or threatened violation of any such covenant in addition to any other remedies it may have.
Executive agrees that in the event that any arbitrator or court of competent jurisdiction shall finally hold that any provision of Section 6 shall hereof is void or constitutes an unreasonable restriction against Executive, the provisions of such
Section 6 shall not be rendered void but shall be deemed to be modified to the minimum extent necessary to remain in force and effect for the greatest period and to such extent as such arbitrator or court may determine constitutes a reasonable
restriction under the circumstances. 
  
         (b)    Subject to the
provisions of Section 7(a), Executive and the Company hereby irrevocably submit to the exclusive jurisdiction of the courts of Florida over any suit, action or proceeding arising out of or relating to this Agreement. Nothing herein shall preclude
the Company from bringing any action or proceeding in any other court for the purpose of enforcing the provisions of this paragraph. The agreement of the parties to this forum is independent of the law that may be applied in the action, and the
parties agree to this forum even if the forum may under applicable law choose to apply non-forum law. The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter have to personal
jurisdiction or to the laying of venue of any such suit, action or proceeding brought in such court. Subject to the provisions of Section
 
 

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7(a), the parties undertake not to commence any action arising out of or relating to this Agreement in a forum other than the forum described in this Section 7(b). The parties agree that, to the
fullest extent permitted by applicable law, a final and non-appealable judgment in any such suit, action, or proceeding brought in any such court shall be conclusive and binding upon the parties. 
  

8.    Representation; Work Product. 
  
         (a)    Executive represents, warrants and covenants that: 
  
       (i)    Executive has the full right, title and authority to enter into this Agreement and perform
Executive’s obligations hereunder; 
  
       (ii)    Executive has not granted, nor will grant, any right, do any act or enter into any agreement or understanding whatsoever which may or will prevent, impair or hinder the full
performance of Executive’s obligations hereunder; and 
  
       (iii)    Executive shall not do any act, fail to do any act or make any statement whatsoever which may or will impair, impugn, denigrate, disparage or negatively reflect upon the name,
reputation or business interests of the Company. 
  
         (b)    The
Company represents, warrants and covenants that it has the full right, title and authority to enter into this Agreement and perform its obligations hereunder. 
  
         (c)    Executive acknowledges and agrees that any and all plans, concepts, ideas, materials and similar work product made or developed by Executive
in connection with the rendering of Executive’s services while employed by the Company (collectively, the “Material”) shall be disclosed to the Company and all intellectual property rights in such designs or works shall rest
absolutely in the Company, which shall be entitled, as far as the law permits, to the exclusive use thereof and shall, at all times, be and remain solely and exclusively the property of such entity or entities for such entity’s or
entities’ exploitation in any manner or media as it may deem appropriate throughout the world and in perpetuity. Notwithstanding the above, Executive hereby assigns and shall at any time assign to the Company, all rights to the Material,
including without limitation, all copyrights and renewals and extensions thereof. The Company and such assignees shall have the right in its or their sole discretion to edit, delete from and/or rearrange the Material and any recordings thereof and
to exploit the Material at any time or times by any means the Company or such assignees may deem desirable. 
  
 9.    Successors. 
  
         (a)    This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws
of descent and distribution, and any assignment in violation of this Agreement shall be void. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives. 
  
         (b)    This Agreement shall inure to the benefit of and be binding upon the Company,
its successors and assigns. 
  
         (c)    The Company shall
require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, or any business of the Company for which Executive’s services are
principally performed, to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. 
  
 10.    Benefits. Executive hereby agrees that in consideration for the payments to be received under this Agreement,
Executive waives any and all rights to any payments or benefits under any plans, programs, contracts or arrangements of the Company or its respective affiliates, except as herein provided. 
 

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 11.    Indemnification. The Company shall indemnify Executive to the
fullest extent provided for in its Articles of Incorporation and Bylaws and under the Florida Business Corporation Act. 
  
 12.    Withholding. All payments to be made to Executive hereunder will be subject to all applicable required withholding of federal, state, local and foreign income and service taxes. 
  
 13.    Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or sent by telephone facsimile transmission, personal or overnight couriers, or registered mail with confirmation or receipt, addressed as follows: if to Executive, at Executive’s last known address in the
records of the Company; if to the Company, at the Company’s principal executive offices. 
  
 14.    Waiver of Breach and Severability. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by
either party. In the event any provision of this Agreement is found to be invalid or unenforceable, it may be severed from the Agreement and the remaining provisions of the Agreement shall continue to be binding and effective. 

 
 15.    Entire Agreement; Amendment. 
  
         (a)    This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and
except as otherwise set forth herein, supersedes all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral, with respect to the subject matter hereof. 

 
         (b)    No provisions of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in writing signed by the parties hereto. 
  
 16.    Governing Law. THE INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO THE
PRINCIPLE OF CONFLICTS OF LAWS. 
  
 17.    Headings. The headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 
  
 
	 STAFF LEASING, INC.
  
 
	 By:                                      
       
 
	 Name:                                     
 
 
	 Title:                                     
  
  
 
	 EXECUTIVE:
  
 
	                                       
          
 
	 James F. Manning
 

 
  
 

 5Prepared by R.R. Donnelley Financial -- Finance Agreement

  
 Exhibit 10.20 
  
 FINANCE AGREEMENT 
  
 Paid Loss WC Deductible 
  
 This Finance Agreement (“Agreement”) is effective as of January 1, 2002 and is made by and between Staff Leasing, Inc. d/b/a Gevity HR (“Insured”) and
Continental Casualty Company (“Insurer”). 
  
 Whereas, Insurer has issued to Insured certain insurance policies (together with any endorsements,
individually and collectively referred to as the “Policies”) which are set forth in Schedule A, which is attached to and made a part of this Agreement; and 
  
 Whereas, Losses incurred under the Policies are subject to a workers’ compensation deductible insurance plan (“1-1-02 Insurance Plan”) as set forth in Schedule A; and 
  
 Whereas, Insured has agreed to pay Insurer premiums and reimburse Insurer for losses and paid Allocated Loss Adjustment Expenses as defined in the Policies (“ALAE”),
according to the terms and conditions of the Policies and Article 6 of this Agreement; and 
  
 Whereas, Insured agrees to fully perform and satisfy each and
every duty, obligation and liability that arises under the Policies, the 1-1-02 Insurance Plan and this Agreement (individually and collectively referred to as the “Insured’s Obligations”); 
  
 Now, Therefore, In consideration of the covenants and undertakings of the parties contained in this Agreement, and other good and valuable consideration, Insurer and Insured
agree as follows: 
  
 1.  Estimated Premium — Insured agrees to pay Insurer the estimated 1-1-02 Insurance Plan
premium of $7,856,223 (“Estimated Premium”). Insured will pay the Estimated Premium in twelve equal monthly installments (“Estimated Installment Premium”) in the amounts and times stated in the Installment Endorsement(s) to the
Policies. 
  
 The Estimated Installment Premium will include the retention, premium tax, excess loss premium (if any), residual market charge and deductible
policy premium identified in the Confirmation Letter dated December 18, 2001, and any subsequent amendments. Estimated regulatory assessments of $30,318 will be due at inception in addition to the Estimated Premium. 
  
 2.  Premium Audit — Premium audits will be performed to determine actual exposure incurred under the Policies. Such audits may result in
adjustments to the Estimated Premium. An interim audit may be conducted by Insurer as of October 31, 2002. Insurer will provide Insured notice of the results of any such audit. The amount billed or refunded as a result of such audits will be limited
to net deductible premiums and any regulatory assessments. 
  
 3.  Administration Fee — Insured agrees to pay Insurer
a fully earned, non-adjustable administration fee of $415,540 (“Administration Fee”) in installments in the amounts and times stated in Schedule A of this Agreement after which time the Administration Fee shall be considered past due and
interest will accrue to the benefit of the Insurer as described in the Payment Terms Article. The Administration Fee is fully earned when due and no part thereof shall be refunded. 
 

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 4.  Loss Reimbursement — The loss reimbursement obligations of Insured under the
Policies shall be governed by the following: 
  

	 	A.
	 
	As of the inception date of the Policies, Insured will maintain with Insurer a minimum and deposit loss fund in the amount of $5,500,000 (“WC Loss Fund” or “Loss
Fund”). Insurer has agreed to permit the Loss Fund currently held by Insurer in conjunction with the Insured’s Insurance Plan effective as of January 1, 2000 (“1-1-00 Insurance Plan”) and January 1, 2001 (1-1-01 Insurance Plan)
to be utilized in partially complying with the loss reimbursement obligations hereunder, thereby requiring Insured to add $1,400,000 to the Loss Fund securing the 1-1-02 Insurance Plan. Said additional $1,400,000 shall be added to the Loss Fund
(hereinafter referred to as the “Consolidated Loss Fund”) as of the inception date of the Policies and said Consolidated Loss Fund shall be maintained as security until all claims under the 1-1-00 Insurance Plan, the 1-1-01 Insurance Plan
and the 1-1-02 Insurance Plan (hereinafter collectively referred to as the “Insurance Plans”) covered by their Respective Finance Agreements have been closed. Insurer will bill Insured monthly for the prior calendar month’s losses
paid and ALAE paid pursuant to the Policies covered by the Consolidated Loss Fund, unpaid claims handling expenses earned (if any) by a claims administrator (collectively “Losses and Expenses”), and, if applicable, either bill Insured for
the Interest in Lieu of Charge (as defined in this Article) or remit payment to Insured of the Loss Fund Deposit Credit (as defined in this Article) applicable to the Consolidated Loss Fund. In the event of any default in payment by Insured, Insurer
has the option to draw upon the Consolidated Loss Fund or on any other Collateral securing Insured’s Obligations under this Agreement. 
 

  

	 	B.
	 
	On or prior to December 31, 2002, Insured will establish with Insurer a working loss fund (“Working Loss Fund”). Funding of the Working Loss Fund will be made in an
amount equal to the difference in the total of losses paid by Insurer (with respect to the Policies covered hereunder) as of November 30, 2001 in the amount of $18,515,000,which is the Insured’s estimated maximum Aggregate Retention as set
forth in Article 6 of this Agreement. Funds maintained in the Working Loss Fund will be utilized by Insurer to pay losses applicable to Insured’s maximum Aggregate Retention under the 1-1-00 Insurance Plan, the 1-1-01 Insurance Plan and the
1-1-02 Insurance Plan. 
 

  

	 	C.
	 
	With respect to the Consolidated Loss Fund, an “Interest in Lieu of Charge” will compensate Insurer for the loss of use of its funds for paying the Losses and
Expenses on behalf of Insured prior to being reimbursed on a monthly basis for same by Insured; and a “Loss Fund Deposit Credit” will compensate Insured for the loss of use of its funds comprising the Consolidated Loss Fund. 

  

	 	  
	 
	The Interest in Lieu of Charge will be two times the Losses and Expenses multiplied by one-twelfth (1/12) (or the applicable pro-rata amount thereof based upon the number of
months, or portion thereof, for which such charge is being calculated) of the ninety (90) day commercial paper dealer rate in effect on the first Friday(s) of the month(s) being billed for that calendar quarter as set forth in the Money Rates
section (or any successor section) of the Midwest Edition of The Wall Street Journal.  The Loss Fund Deposit Credit will be two times the Consolidated Loss Fund multiplied by one-twelfth (1/12) (or the applicable pro-rata amount thereof based
upon the number of months, or portion thereof, for which such charge is being calculated) of the ninety (90) day commercial paper dealer rate in effect on the first Friday(s) of the month(s) being billed as set forth in the Money Rates section (or
any successor section) of the Midwest Edition of The Wall Street Journal.  
 

  

	 	  
	 
	The difference in the Interest in Lieu of Charge and the Loss Fund Deposit Credit will either be billed to or payment remitted to Insured by Insurer. Insured will pay
Insurer any amounts billed to it under this Article within fifteen (15) days of the billing date (as defined in the Payment Terms Article of this Agreement). 
 

  
 5.  Paid Loss Adjustment — Insurer may prepare an adjustment for the Insurance Plans (“Deductible Adjustment”) six (6) months after the expiration or termination of the
applicable Policies and annually thereafter (“Evaluation Date”) until final settlement. Each Deductible Adjustment will equal the sum of: 
  
 

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	 	A.
	 
	Amounts past due under the Loss Reimbursement Article, Accrued Interest (as defined in the Payment Terms Article), and amounts due under the Additional Amounts Article of the
Finance Agreement applicable to each of the Insurance Plans; plus 
 

  

	 	B.
	 
	As of the Evaluation Date the sum of: Paid Losses, paid ALAE, claim handling expenses (if any) due under each of the Insurance Plans; minus 
 

 

	 	C.
	 
	Amounts paid to Insurer under this Agreement (exclusive of any of the Insurance Plans premiums applicable to the Policies, premium audit adjustments, Accrued Interest payments,
and amounts arising under the Additional Amounts Article of the Finance Agreement applicable to each of the Insurance Plans). 
 

  
 Upon
completion of each Deductible Adjustment Insurer will prepare and send an invoice to Insured, or remit a refund to Insured, as appropriate. 
  
 6.  Maximum Incurred Losses — The maximum Aggregate Retention (including all ALAE paid) Insured will be obligated to pay under the 1-1-02 Insurance Plan, excluding any amounts due Insurer under the Payment
Terms Article, Claims Administration Article, and the Additional Amounts Article of this Agreement, will be $18,515,000 (“Maximum Incurred Losses” or “Aggregate Limit”), which is an estimate; provided, however, the Maximum
Incurred Losses Insured will be obligated to pay (including ALAE) for any one accident or occurrence will be $10,000,000. Upon the completion of each Deductible Adjustment, the Maximum Incurred Losses shall be computed for such period based on the
rate of $161.00 per $1,000 of Manual Workers’ Compensation Premium, with premium subject to a minimum Aggregate Retention of $14,812,000. The Maximum Incurred Losses calculated as a result of any interim audit shall be increased pro rata to 365
days. 
  
 7.  Collateral/Experience Account — Both parties agree that collateral (“Collateral”) is required to
protect the interests of Insurer under the 1-1-00 Insurance Plan and the 1-1-01 insurance plan, in addition to the Collateral securing the 1/1/02 Insurance Plan, and that such Collateral may be utilized to pay Insured’s Obligations under said
Insurance Plans as follows: 
  

	A.
	 
	The Insured’s Obligations will be secured as follows: 
 

  

	 	1.)
	 
	Insured will deliver or cause to be delivered to Insurer as of the inception date of the 1-1-02 Insurance Plan Policies a clean, unconditional and irrevocable letter of credit
(“LOC”) issued by a financial institution acceptable to and in a form acceptable to Insurer. The amount of the LOC shall be $61,230,384. Alternatively, Insured will deposit or cause to be deposited cash or certain classes of securities
(“Eligible Investments”) in the amount of $61,230,384 in the Consolidated Collateral Trust Account for the 1-1-02 Insurance Plan sub-account as required herein to comply with Insurer’s Collateral requirements for the 1-1-02
Insurance Plan as follows: 
 

  

	 	  
	 
	(i) A Collateral Trust Account with a financial institution acceptable to Insurer shall be established directly by Insured in the amount of $24,895,384 for the benefit of
Insurer with respect to the 1-1-00, 1-1-01 and 1-1-02 Insurance Plan Collateral requirements (such Collateral Trust Account shall hereinafter be referred to as the “Direct Collateral Trust Account”). Funding of the Direct Collateral Trust
Account shall be made in four equal quarterly installments of $6,223,846 (payable on January 1, 2002, April 1, 2002, July 1, 2002 and October 1, 2002) and the Collateral Trust Agreement creating the Direct Collateral Trust Account shall reflect that
such Collateral Trust Account is established and maintained for the sole benefit of Insurer to secure the Insured’s Obligations under the Insurance Plans. The Direct Collateral Trust Account required hereunder shall be established and
maintained as set forth in Appendix A, which is attached to this Agreement and incorporated by reference herein. For purposes of monitoring Collateral requirements, the Trust Assets comprising the Direct Collateral Trust Account will be treated as
partial collateral securing Insured’s Obligations under the Insurance Plans. 
 

 

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	(ii) Insurer has agreed to permit the assets comprising the existing Consolidated Collateral Trust Account established by North Rock Insurance Company Limited as partial
Collateral under the 1-1-00 Insurance Plan and the 1-1-01 Insurance Plan to also be utilized in complying with the 1-1-02 Insurance Plan Collateral requirements in excess of the Collateral required to be maintained in the Direct Collateral Trust
Account. Accordingly, Insured will deposit or cause to be deposited cash or certain classes of securities (“Eligible Investments”—as defined in the Collateral Trust Agreement) in the amount of $36,335,000 in the existing Consolidated
Collateral Trust Account established in conjunction with Insured’s 1-1-00, 1-1-01 and 1-1-02 Insurance Plans. Funding of additional assets in the amount of $36,335,000 to the 1-1-02 Insurance Plan sub-account of the Consolidated Collateral
Trust Account shall be made with an initial additional deposit of $3,027,924 on January 1, 2002, followed by eleven (11) additional monthly payments of $3,027,916, payable on the first day of each month. The Collateral Trust Agreement creating the
original Collateral Trust Account in conjunction with the 1-1-00 Insurance Plans shall be amended to reflect that the Collateral Trust Account shall hereinafter be referred to as the Consolidated Collateral Trust Account, that it was established and
maintained for the sole benefit of Insurer to secure the Insured’s Obligations under the 1-1-00 Insurance Plan, the 1-1-01 Insurance Plan and the 1-1-02 Insurance Plan The Consolidated Collateral Trust Account required hereunder shall be
maintained as set forth in Appendix A, which is attached to this Agreement and incorporated by reference herein. 
 

  

	 	2.)
	 
	Insured will establish and maintain with Insurer the Working Loss Fund and the Consolidated Loss Fund as required by the Loss Reimbursement Article of this Agreement.

 

  

	B.
	 
	Insurer will establish an Experience Account as specified in Appendix B, which is attached to and incorporated by reference herein to this Agreement, as a means of monitoring
the adequacy of the Collateral required by Insurer to secure the Insured’s Obligations under Paragraph A. of this Article 7. of the Agreement. The Experience Account established hereunder and under the Agreement covering the Insurance Plans
shall reflect that: 
 

  

	 	(i)
	 
	the Direct Collateral Trust Account assets shall be allocated to and identified by the Insurance Plan for which it was established; and 
 

 

	 	(ii)
	 
	the Consolidated Collateral Trust Account assets shall be allocated to and identified by each of the sub-accounts applicable to the 1-1-00 Insurance Plan, the 1-1-01 Insurance
Plan and the 1-1-02 Insurance Plan. 
 

  
 8.  Material Change In Ownership — Insurer will have the right to
require Insured to increase the amount of assets in the Direct Collateral Trust Account and/or the sub-accounts comprising the Consolidated Collateral Trust Account required as Collateral under the applicable Insurance Plans by an amount not to
exceed the amount of the Maximum Incurred Losses (as defined in the Finance Agreement applicable to each of the Insurance Plans) if there is a Material Change In Ownership of Insured. Insured will increase the applicable Direct Collateral Trust
Account and/or the sub-accounts comprising the Consolidated Collateral Trust Account or the bonds to the required amount within ten (10) days of notification thereof. For purposes of this Agreement, a “Material Change in Ownership” occurs
when: (i) an investor or a group of affiliated investors acquires more than 30% of the voting shares of Insured, or (ii) Insured’s board of directors authorizes: a merger, consolidation, reorganization, or liquidation of Insured, the sale of
substantially all of Insured’s assets, or a distribution of assets to shareholders in excess of 25% of Insured’s assets. 
  
 9.  Events of Default — Any of the following will be an Event of Default under this Agreement: 
  

	A.
	 
	Insured does not pay any amount due Insurer when due under the terms of the Policies under the Insurance Plans, the Insurance Plans and/or the Finance Agreements applicable to
the Insurance Plans; or 
 

  

	B.
	 
	Insured does not establish, deliver or adjust the Direct Collateral Trust Account and/or the sub-accounts comprising the Consolidated Collateral Trust Account or bonds as
required in the Finance Agreements applicable to the Insurance Plans; or 
 

 

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	C.
	 
	Insurer receives written notice from (i) the Issuing Institution, that the bond will not be renewed, or (ii) the Trustee, that the Collateral Trust Agreement applicable to
either the Direct Collateral Trust Account and/or the Consolidated Collateral Trust Account will be terminated, and Insurer is not in possession of a satisfactory successor Trustee or replacement bond thirty (30) days prior to termination of the
Direct Collateral Trust Account and/or the Consolidated Collateral Trust Account or expiration of the bond; or 
 

  

	D.
	 
	The financial condition of the Issuing Institution of any LOC or the surety bond becomes such that, in Insurer’s sole opinion, the Issuing Institution may be unable to pay
any draw upon the LOC or bond; or 
 

  

	E.
	 
	Insured ceases doing business as a going concern, makes an assignment for the benefit of creditors, generally does not pay its debts as they become due or admits in writing its
inability to pay its debts as they become due, files a petition commencing a voluntary case under any chapter of the Bankruptcy Code, 11 U.S.C. Sec. 101 et seq. (“Bankruptcy Code”), is adjudicated an insolvent, files a petition
seeking for itself a reorganization, arrangement, composition, readjustment, rehabilitation, liquidation, dissolution or similar arrangement under the Bankruptcy Code or any other present or future statute, law, rule or regulation, whether domestic
or foreign; or a case, proceeding or other action either results in such entry, adjudication, relief or issuance or entry of any other order of judgment having a similar effect, or remains undismissed for thirty (30) days; or 

  

	F.
	 
	Insured cancels any of the Policies; or 
 

  

	G.
	 
	Insured fails to execute any further documentation relative to the Insurance Plan as Insurer, in its reasonable business judgment, may require within thirty (30) days after
Insurer delivers such documentation to Insured. 
 

  
 Any termination or cancellation of the Finance Agreements applicable to the Insurance
Plans by Insurer will not release Insured from any of Insured’s Obligations. Insurer’s right to apply any Remedies set forth below, should an Event of Default occur, will not be affected by any such termination or cancellation, including
without limitation the right to draw upon the Collateral in any amount, as long as Insured remains liable for any Insured’s Obligations under the Insurance Plans. 
  
 10.  Remedies — If any Event of Default occurs, Insurer may exercise any or all of the remedies set forth below: 
  

	A.
	 
	Insurer may terminate the Policies under the Insurance Plans after giving written notice of termination to Insured as set forth in the Policies (or any greater period of
written notice as may be required by applicable law). If the event specified in paragraph E of the Event of Default Article occurs, Insurer may terminate such Policies immediately without the requirement of any action by Insurer or notice given to
Insured (unless prior notice is required by applicable law). Upon termination of any of the Policies, all installments of premium and other sums that may become payable by Insured under the Policies, the Insurance Plans or the Finance Agreements
applicable to the Insurance Plans will become immediately due and payable, and Insurer will have no further liability under the Policies. 
 

  

	B.
	 
	Insurer may: (i) perform an Adjustment using Incurred Losses with the entire balance so computed becoming immediately due and payable; and/or (ii) perform a final Adjustment
using the Ultimate Loss Amount as set forth in the Remedies Article of the Finance Agreements applicable to the Insurance Plans with the entire balance so computed becoming immediately due and payable; and/or (iii) draw upon any of the Collateral
applicable to the Insurance Plans in the full or any lesser amount. 
 

  

	C.
	 
	Insurer may offset any account surplus, credit obligation, refund, dividend or any other amount that is due or may become due Insured under the Policies, the Insurance Plans or
the Finance Agreements applicable to the Insurance Plans and apply such amount against any amount that is due or may become due Insurer from Insured under the Policies, the Insurance Plan to which such Policies apply or this Agreement. 

  

	D.
	 
	If the event specified in paragraph E of the Event of Default Article occurs, Insurer may claim and recover, in addition to all other sums which may become payable by Insured
to Insurer, the full amount of the Ultimate Loss Amount as set forth in the Remedies Article of the Finance Agreements applicable to the
 
 

 

 5 

	 	
Insurance Plans for all projected amounts which may become due and payable under the Policies, the Insurance Plans or the Finance Agreements applicable to the Insurance Plans. 

  

	E.
	 
	In the event that Insurer draws upon any of the Collateral securing the Insurance Plans, any proceeds received by Insurer shall be applied first, to the payment or
reimbursement of the costs, expenses and fees for collection provided for in the Payment Terms of the Finance Agreements applicable to the Insurance Plans; second, to the payment of interest provided for in the Payment Terms Article of the Finance
Agreements applicable to the Insurance Plans; third, to the payment of any past due Estimated Installment Premium; fourth, to the payment of any other premium or other amount currently due under the Finance Agreements applicable to the Insurance
Plans; fifth, to the payment of future amounts due with respect to the Ultimate Loss Amount as defined in the Finance Agreements applicable to the Insurance Plans; sixth, any amounts remaining will be paid to Insured after all amounts owing pursuant
to Insured’s Obligations have been finally and fully calculated, paid and discharged. 
 

  

	F.
	 
	Insurer may apply the proceeds of any draw(s) upon the Collateral to any outstanding amounts owed to Insurer at any time. 
 

  
 The “Ultimate Loss Amount” applicable to each of the Insurance Plans will be determined by Insurer in its sole discretion through the use of generally accepted
actuarial methods which will take into consideration, without limitation, Insured’s expected loss ratio at the time of quotation, loss development factors generally used by Insurer, and loss development factors based on Insured’s
individual loss history. Insurer’s determination of the Ultimate Loss Amount shall be conclusive and binding upon Insured. 
  
 11.  Payment Terms — Unless otherwise expressly provided, Insured will pay any invoice submitted by Insurer within thirty (30) days of the billing date after which time such amount will be considered past
due. Insurer will have the option to accrue interest on any undisputed outstanding amounts past due under this Agreement at a rate that is equal to the ninety (90) day commercial paper dealer rate in effect on the first Friday of each month as set
forth in the Money Rates section (or any successor section) of the Midwest Edition of The Wall Street Journal plus five per cent (5%) per annum. Interest will compound daily until full payment is received (“Accrued Interest”). All
Accrued Interest will be billed as soon as practicable and will be payable within fifteen (15) days of the billing date. In the event Insurer undertakes any efforts to collect any amounts due from Insured under the Finance Agreements applicable to
the Insurance Plans, Insured will indemnify Insurer for the reasonable costs, expenses and fees of such collection efforts, including attorneys’ fees, if any. Any amounts due under the Payment Terms Article of the Finance Agreements applicable
to the Insurance Plans will be in addition to the Maximum Incurred Losses. 
  
 12.  Claims Administration — Insured will
select a third party administrator or claim service provider (“Claim Service Provider”) to service claims that arise under the Policies (“Claims”). Insurer reserves the right to periodically review and approve any Claim Service
Provider selected by Insured. Such approval will not be unreasonably withheld. If Insured does not select a Claim Service Provider or Insurer does not approve of Insured’s selection, Insurer may select a Claims Service Provider to service the
Claims. Insured will promptly reimburse Insurer for all amounts paid by Insurer to the Claims Service Provider. 
  
 13.  Additional
Amounts — Insured will reimburse Insurer for all taxes, fees or assessments (including any interest and penalties levied) related to the Policies, the Insurance Plans to which such Policies apply or the Finance Agreements
applicable to the Insurance Plans whenever imposed or assessed upon Insurer or any of its affiliates and/or subsidiaries by any governmental body, any insurance guarantee fund association or any residual market facility. Any amounts due under this
Article will be in addition to the Maximum Incurred Losses. 
  
 14.  Term Of Agreement — This Agreement will remain
in full force and effect until terminated. The parties may modify certain terms and conditions of this Agreement, as determined solely by Insurer, by written addendum upon each successive anniversary date (“Annual Addendum”). 

 6 

  
 15.  Termination — This Agreement may be immediately terminated by either party
upon notice in the event of fraud, abandonment, gross or willful misconduct, insolvency, or lack of legal capacity to act by the other party. If this Agreement is terminated, Insured will not be released from any Insured’s Obligations under the
Finance Agreements applicable to the Insurance Plans, including without limitation, the obligation to maintain the Collateral; and Insurer will continue to have the option to enforce any of the Remedies available to it under the Finance Agreements
applicable to the Insurance Plans. 
  
 16.  Assignment — This Agreement will be binding upon and inure to the benefit
of the parties and their successors and assigns. Neither party may assign this Agreement without the prior written consent of the other party, such consent not to be unreasonably withheld. 
  

17.  No Remedy Exclusive — No remedy conferred upon or reserved to any party is intended to be exclusive of any other available remedy, but each and every remedy will
be cumulative and will be in addition to every other remedy given under the Finance Agreements applicable to the Insurance Plans, or now or hereafter existing at law or in equity. 
  
 18.  Notices — Unless otherwise expressly provided, all notices required under this Agreement will be confirmed in writing to the other party and sent by United States mail to
the other party addressed as follows: 
  
 
	 If to Insurer:
 	 	 If to Insured:
 
	 
	 Continental Casualty Company
 	 	 Staff Leasing, Inc. d/b/a Gevity HR
 
	 CNA Plaza
 	 	 600 301 Boulevard West, Suite 202
 
	 Chicago, IL 60685
 	 	 Bradenton, FL 34205
 
	 Attn.:  Director, Contract Administration-30S
 	 	 Attn.:  Mr. Wade Latham, Vice President
 
	 CNA Risk Management

 	 	 Risk Management

 
	 Fax No.: 312/817-3348
 	 	 Fax No.: 941/741-4333
 

 
  
 20.  Waiver — The failure of any party to insist upon strict performance of
any duty or responsibility of any other party under this Agreement will not be deemed a waiver of such duty or responsibility or create an estoppel against any party to this Agreement. 
  
 21.  Survival — The rights, remedies and covenants of Insurer and Insured under this Agreement, including without limitation those set forth in the Collateral, Events of Default and
Remedies Articles of the Finance Agreements applicable to the Insurance Plans, will survive any termination of the Policies, the Insurance Plans, or the Finance Agreements applicable to the Insurance Plans. 
  
 22.  Entire Understanding — This Agreement sets forth the entire Agreement and understanding between the parties with respect to the subject matter
of this Agreement. All parties have participated in the drafting of this Agreement. No term or provision set forth herein which may be considered ambiguous will be presumptively interpreted against any party as the drafter of this Agreement. Unless
otherwise expressly set forth in this Agreement, this Agreement may only be amended in writing signed by officers of both parties. 
  
 23.  Severability — If any provision of this Agreement is adjudged by any court of law to be void or unenforceable in whole or in part, such adjudication will not be deemed to affect the validity of the
remainder of this Agreement. Each provision of this Agreement is declared to be severable from every other provision and constitutes a separate and distinct covenant. 
  
 24.  Governing Law — This Agreement will be construed and governed by the laws of the State of Illinois. 
 

 7 

  
 IN WITNESS WHEREOF, Insurer and Insured have caused this Agreement to be executed by the
persons duly authorized to act in their respective names in multiple originals effective as of the date and year first above stated. 
  
 
	 INSURED
 	 	  	 	 INSURER
 
	 
	 STAFF LEASING, INC. D/B/A GEVITY HR 
 
	 	  	 	 CONTINENTAL CASUALTY COMPANY
 

	 (Legal Name of Insured)
 	 	  	 	 (Legal Name of Insurer)
 
	 
	 By:
 	 	  
 
	 	  	 	 By:
 	 	  
 

	  	 	 (Signature of Officer)
 	 	  	 	  	 	 (Signature of Officer)
 
	  	 	  	 	  	 	  	 	  
	 
	 Name:
 	 	  
 
	 	  	 	 Name:
 	 	  
 

	  	 	 (Name of Officer)
 	 	  	 	  	 	 (Name of Officer)
 
	 
	 Title:
 	 	  
 
	 	  	 	 Title:
 	 	 Vice-President
 
	 
	 Date:
 	 	  
 
	 	  	 	 Date:
 	 	  
 

	 
	  	 	  	 	  	 	 Attest:
 	 	  
 

	 
	  	 	  	 	  	 	 Title:
 	 	 Asst Secretary
 
	 
	 By:
 	 	  
 
	 	  	 	  	 	  
	  	 	 (Signature of Officer)
 	 	  	 	  	 	  
	 
	 Name:
 	 	  
 
	 	  	 	  	 	  
	  	 	 (Name of Officer)
 	 	  	 	  	 	  
	 
	 Title:
 	 	  
 
	 	  	 	  	 	  
	 
	 Date:
 	 	  
 
	 	  	 	  	 	  

 
 

 8 

  
 SCHEDULE A 
  
 PART I.  DESCRIPTION OF POLICIES 
  
 
	 Policy Limits:
 	 	 (a)  Workers’ Compensation: $10,000,000 Each Accident
 
	  	 	 (b)  Employer’s Liability:
 
	  	 	      Bodily Injury by Accident $10,000,000 Each Accident
 
	  	 	      Bodily Injury by Disease $10,000,000 Policy Limit
 
	  	 	      Bodily Injury by Disease $10,000,000 Each Employee
 

 
  
 Workers’ Compensation Deductible Plan: 
  

	 POLICY NUMBER
 
	  	 EFFECTIVE DATE
 
	 	 UNDERWRITING COMPANY
 

	 WC 189165165
 	  	 January 1, 2002
 	 	 Continental Casualty Company
 
	 WC 247848874
 	  	 January 1, 2002
 	 	 Continental Casualty Company
 
	 WC 189165182
 	  	 January 1, 2002
 	 	 Continental Casualty Company
 
	 WC 247848888
 	  	 January 1, 2002
 	 	 Continental Casualty Company
 
	 Various AZ. & CA.
     MCP Policies
 	  	 January 1, 2002
 	 	 Continental Casualty Company
 

 
  
 PART II.  ADMINISTRATION FEE INSTALLMENT SCHEDULE 
  
 
	 Installment Due Date
 
	 	 Installment Amount
 

	   1-1-2001
 	 	 $  34,632
 
	   2-1-2001
 	 	 $  34,628
 
	   3-1-2001
 	 	 $  34,628
 
	   4-1-2001
 	 	 $  34,628
 
	   5-1-2001
 	 	 $  34,628
 
	   6-1-2001
 	 	 $  34,628
 
	   7-1-2001
 	 	 $  34,628
 
	   8-1-2001
 	 	 $  34,628
 
	   9-1-2001
 	 	 $  34,628
 
	 10-1-2001
 	 	 $  34,628
 
	 11-1-2001
 	 	 $  34,628
 
	 12-1-2001
 	 	 $  34,628
 
	          Total
 	 	 $415,540
 

 
 

 9 

  
 APPENDIX A 
  
 COLLATERAL TRUST ACCOUNT REQUIREMENTS 
  
 1.  The Direct Collateral Trust Account required to be
established and maintained pursuant to Article 7.A.1(i) of this Agreement will be funded with Trust Assets that will amount to at least $24,895,384 (subject to audit) during the term of this Agreement and shall consist only of the following those
classes of Eligible Securities as set forth in the Collateral Trust Agreement establishing the Direct Collateral Trust Account. 
  
 2.  The 1-1-02
Insurance Plan sub-account of the Consolidated Collateral Trust Account required to be maintained pursuant to Article 7.A. of this Agreement will be funded with Trust Assets that will amount to at least $36,335,000 (subject to audit) during the term
of this Agreement and shall consist only of the following three classes of Eligible Securities: (i) “Cash and Equivalents “; (ii) “Fixed Income”; and (iii) “Equities”, all as further defined in the Collateral Trust
Agreement applicable to the Consolidated Collateral Trust Account. 
  
 3.  Upon execution of this Agreement, the funding of the Direct Collateral
Trust Account and the funding of the 1-1-02 Insurance Plan sub-account of the Consolidated Collateral Trust Account will consist of initial deposits (on or before the first business day of January, 2002) to each such Collateral Trust Account (or
sub-account thereof) of cash and/or Eligible Investments in an amount equal to: (i) $6,223,846 with respect to the Direct Collateral Trust Account, followed by three quarterly payments in the same amount as set forth in Article 7.A.1. of the
Agreement; and (ii) $3,027,924 with respect to the 1-1-02 Insurance Plan sub-account of the Consolidated Collateral Trust Account, followed by eleven monthly payments in the amount of $3,027,916, payable on or before the first business day of each
month such funding amount is due. 
  
 No one class of Trust Assets required hereunder may comprise more than 50% of the total value of the Trust Assets of
any applicable Collateral Trust Account (or sub-account thereof) for a period in excess of 30 days without the written consent of Insurer. 
  
 4.  The investment return on the Equities class of Trust Assets deposited in the Consolidated Collateral Trust Account shall be valued by Insurer (or the Investment Manager of the Trust Assets) on a quarterly calendar basis
utilizing the market price of the Equities as of the close of the New York Stock Exchange or other recognized United States Exchange (as listed in the Wall Street Journal) on the first Friday of each calendar quarter. In the event Insurer is
not collateralized to ultimate premium due under the Insurance Programs secured by the applicable sub-account of the Consolidated Collateral Trust Account, and, Insurer determines, at any time in its sole discretion, that the market value of the
Equities in either sub-account of the Consolidated Collateral Trust Account has decreased by: 
  
 (i) with respect to the 1-1-00
Insurance Plan sub-account of the Consolidated Collateral Trust Account, the greater of $3,000,000, or twenty percent (20%) or more from a market valuation of $16,300,000, and 
  
 (ii) with respect to the 1-1-01 Insurance Plan sub-account of the Consolidated Collateral Trust Account, the greater of $3,200,000, or twenty percent (20%) or more from a
market valuation of $15,680,000; 
  
 (iii) with respect to the 1-01-02 Insurance Plan sub-account of the Consolidated Collateral
Trust Account, the greater of $2,400,000, or twenty (20%) or more from a market valuation of $12,100,000; 
  
 Insured shall, upon 3 business days notice
from the Insurer, increase such class of Trust Assets in the applicable sub-account of the Consolidated Collateral Trust Account by an amount necessary to restore the market valuation of the Equities by the deficient amount. Alternatively, Insured
may increase the classes of U.S. Treasuries or U.S. Investment Grade Corporate Bonds Trust Assets in an amount necessary to correct any shortcoming in the market valuation of the Equities class of Trust Assets. To correct any such deficiency in a
sub-account of the Consolidated Collateral Trust Account, Insurer will instruct the Trustee to transfer any surplus Trust Assets from
 
 

 10 

 
a complying sub-account to the deficient sub-account before making demand upon Insured to make additional deposits to the deficient sub-account of the Consolidated Collateral Trust Account.

  
 5.  (a) In the event the aggregate Incurred Losses under the 1-1-02 Insurance Plan exceed the Loss Amount calculated pursuant to subparagraph
(c) below with respect to the 1-1-02 Insurance Plan, Insured shall pay, or cause to be paid, to Insurer an Additional Premium calculated as 94% of the amount of Incurred Losses (paid losses, reserved losses and ALAE) which exceed that Loss Amount.
Such Additional Premium shall be adjusted and billed quarterly for 6 years from the inception date of the Policy Period and annually thereafter until all claims under the Policies are closed or Insured and Insurer mutually agree to a final
calculation of the Additional Premium. 
  
 The amount of any such Additional Premium due hereunder shall be deposited immediately into the 1-1-02 Insurance
Plan sub-account of the Consolidated Collateral Trust Account upon receipt of an invoice from Insurer. Provided, if the Additional Premium calculated as the result of any adjustment other than the final adjustment is less than $100,000, that
Additional Premium shall be deferred until, and payable by Insured at, the next adjustment. 
  
 (b) If the Experience Account
established with respect to the 1-1-02 Insurance Plan pursuant to Article 7. and Appendix B of this Agreement [excluding any investment income earned on any Additional Premium(s) paid pursuant to subparagraph (a) above] is exhausted by payment of
Paid Losses before such Paid Losses total the Loss Amount calculated pursuant to subparagraph (c) below, Insured shall pay to Insurer an Additional Premium with respect to the 1-1-02 Insurance Plan.  
  
 Provided, however, such Additional Premium for the 1-1-02 Insurance Plan calculated under this subparagraph (b) shall not exceed the difference between: 

  

	 	(i)
	 
	The Loss Amount calculated pursuant to subparagraph (c) below; and 
 

  

	 	(ii)
	 
	The total Paid Losses as of the date the Experience Account is exhausted.  
 

  

	 	(c)
	 
	The Loss Amount for the 1-1-02 Insurance Plan covered by this Agreement, as used in this Paragraph 5, is estimated to be $58,500,000. This Loss Amount is adjustable at
audit based on a rate of $508.6957 per $1,000 of Manual Workers’ Compensation Premium. In no event shall the Loss Amount be less than $46,800,000. 
 

  
 Any Additional Premium(s) due under this Paragraph 5. shall be deposited into the applicable Collateral Trust Account (or sub-account thereof) as additional Trust Assets upon receipt of an invoice from Insurer and
shall be payable by or on behalf of Insured in addition to the Estimated Premium due under the Policies. Any such infusion of additional Trust Assets into either the Direct Collateral Trust Account and/or the applicable sub-account(s) of the
Consolidated Collateral Trust Account hereunder may be made to any or all of the classes of Eligible Investments comprising the Trust Assets. 
  
 6.  If the cumulative investment yield on the Trust Assets comprising the 1-1-02 sub-account of the Consolidated Collateral Trust Account is not at least a minimum of 4.25% per annum (“Investment Credit”), as
determined by Insurer on or before January 31, 2003 [and every year thereafter during which time such sub-account of the Consolidated Collateral Trust Account remains in effect], by multiplying the average daily balance of said sub-account of the
Consolidated Collateral Trust Account for such annual period by 4.25%, an additional infusion of Trust Assets will be made in an amount to bring the value of the sub-account to an amount that would have achieved a 4.25% per
annum on such sub-account for that period. To correct any such deficiency in the Investment Credit of any deficient sub-accounts of the Consolidated Collateral Trust Account, Insurer will
 
 

 11 

 
instruct the Trustee to transfer any surplus Trust Assets from a complying sub-account to the deficient sub- account of the Consolidated Collateral Trust Account before making demand upon Insured
to make additional deposits to the deficient sub-account(s). The cumulative Investment Credit applicable to the Direct Collateral Trust Account and/or the sub-accounts of the Consolidated Collateral Trust Account as required under this Paragraph 5.
shall be equal to the sum of the Investment Credit for the term of this Agreement and each consecutive 12-month period thereafter (or portion thereof) following the Effective Date of this Agreement. 
  
 Any such infusion of additional Trust Assets required under the applicable Finance Agreements for each of the Insurance Plans shall be immediately due and deposited in the
deficient sub-account(s) of the Consolidated Collateral Trust Account for such Insurance Plan, as applicable, upon receipt of notice from Insurer. No infusion of additional Trust Assets will be required hereunder in the event that the initial and
cumulative Investment Credit equals or exceeds the applicable Investment Credits for each such sub-account of the Consolidated Collateral Trust Account. 
 

 12 

  
 APPENDIX B 
  
 EXPERIENCE ACCOUNT 
  
 As required by Article 7.B. of the Agreement, Insurer shall establish and maintain an
Experience Account for the 1-1-02 Insurance Plan covered by this Agreement as follows: 
  

	 	a.
	 
	The next business day after receipt of each installment of the Estimated Installment Premium by Insurer, the Experience Account shall be credited with such Estimated
Installment Premium. 
 

  

	 	b.
	 
	The Experience Account shall be credited, as received, with the investment income earned with respect to the Trust Assets in either the Direct Collateral Trust Account and/or
the 1-1-02 Insurance Plan sub-account of the Consolidated Collateral Trust Account or earned on any monies in the Experience Account. As used herein, the term “investment income” will not include any investment income attributable to
either the 1-1-02 Insurance Plan sub-account of the Consolidated Loss Fund or the Working Loss Fund as specified in Article 4 of the Agreement. 
 

  

	 	c.
	 
	The Experience Account shall be debited at the time and in the amounts set forth below: 
 

  

	 	(1)
	 
	On a quarterly basis, by the amount of Paid Losses paid by Insurer hereunder with respect to the 1-1-02 Insurance Plan; and 
 

  

	 	(2)
	 
	Within five (5) days after receipt of any Additional Premium(s) due with respect to the 1-1-02 Insurance Plan pursuant to Paragraph 5. of Appendix A of this Agreement. 

 

 

 13

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