COLLATERAL CARRY FORWARD AGREEMENT FOR OWNER OF SEGREGATED PORTFOLIO IN CALEDONIAN REINSURANCE SPC

Exhibit 10.33

COLLATERAL CARRY FORWARD AGREEMENT
FOR OWNER OF SEGREGATED PORTFOLIO
IN CALEDONIAN REINSURANCE SPC

THIS COLLATERAL CARRY FORWARD AGREEMENT , dated as of the 16 ^th day of August, 2005 (referred to herein as the “Agreement”), is entered into by and between WESTWIND HOLDING COMPANY, LLC, a Florida limited liability corporation (referred to herein as “Shareholder”), PROGRESSIVE EMPLOYER SERVICES III, L.L.C. , (referred to herein as the “Insured”), and GUARANTEE INSURANCE COMPANY , a South Carolina corporation (referred to herein as “GIC”).

WITNESSETH :

WHEREAS , the Insured is an affiliate or subsidiary of Shareholder; and

WHEREAS , the Insured is insured for certain workers’ compensation risks by GIC; and

WHEREAS , GIC additionally issues separate insurance policies to the Insured’s staffing accounts; and

WHEREAS , upon full and open discussion with GIC and such other parties as it may have deemed appropriate, Shareholder has chosen to participate in the reinsurance results of the Insured’s business insured with GIC, as a result of which Shareholder opted to establish and invest, pursuant to Cayman Islands law, in Segregated Portfolio 110 (referred to herein as “SP 110”) within CALEDONIAN REINSURANCE SPC , a Cayman Islands corporation (referred to herein as “Caledonian”), into which certain of the Insured’s insured risks will be reinsured. Pursuant to GIC’s reinsurance agreements with Caledonian and GIC’s understanding with Shareholder and the Insured, SP110 will participate in 90% of such reinsurance results, and GIC shall participate in 10% of the reinsurance results, subject to certain aggregate limits; and

WHEREAS , a requirement of said arrangement is that Shareholder or the Insured provide and maintain, on account with GIC, a certain amount of collateral during the time that the GIC policies are in effect, (referred to herein as the “Collateral Account”). The funds required to be maintained in the Collateral Account are to be determined in accordance with that certain initial Participation Agreement entered into by and between Shareholder and SP110 on or about August 16, 2004, as it may be amended, modified or renewed from time to time, (referred to herein as the “Participation Agreement”), as well as the provisions of this Agreement; and

WHEREAS , the Collateral Account may be comprised of cash, letters of credit or other financial instruments as GIC shall determine to be acceptable; and

WHEREAS , it is possible that, at any time while the policy is in effect, the Collateral Account shall have collateral that is more than the amount necessary to secure the Insured’s risks paid

and incurred during the time while the policies covered by this Agreement are in effect (referred to herein as the “Overage” as further defined below); and

WHEREAS , it is also possible that, at any time while the policy is in effect, GIC may similarly determine that there are not sufficient funds in the Collateral Account during the time while the policies covered by this Agreement are in effect and therefore not sufficient to satisfy its collateral needs (referred to herein as the “Deficit” as further defined below); and

WHEREAS , in the event that GIC determines that there is an Overage, the Insured may carry over the Overage to have it credited and applied to the amount of collateral that GIC requires in the Collateral Account in connection with subsequent insurance coverages granted to the Insured;

NOW, THEREFORE , in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, Shareholder, the Insured and GIC agree as follows:

Section 1. Premium and Collateral . The Insured has paid or shall pay to GIC the premium, (referred to herein as the “Premium”), relating to the policies issued herewith and of even date herewith (referred to herein as the “the Policies”) for insurance against certain workers’ compensation risks during the policy year commencing August 16, 2005, and concluding August 15, 2006 (referred to herein as the “Current Policy Year”), which Premium is subject to adjustment over the course of the Current Policy Year depending on changes in employee enrollment at the Insured and which Premium is estimated to be $7,960,902.

For both the Prior Policy Year and the Current Policy Year, GIC has required and the Shareholder or the Insured has provided or shall provide maximum cash collateral (the “Cash Collateral”) equal to twenty percent (20%) of the Premium for each Policy Year (referred to herein as the “Overall Aggregate Limit”). The Cash Collateral for the Current Policy Year is estimated to be $1,592,180.00. Shareholder and/or the Insured agree to maintain the Cash Collateral initially in the Collateral Account at the amounts indicated below, subject to replenishment of any Deficits (as hereinafter defined) by the Shareholder and/or the Insured. The Premium has been or shall be paid in cash. The Collateral Account has been or shall be comprised of cash, letters of credit and such other financial instruments or liquid assets as shall be acceptable in kind and amount to GIC. Shareholder and/or the Insured agree to initially fund the Collateral Account as follows:

     A.  Claims Under $75,000 . The insurance policies for the Current Policy Year to be issued by GIC to the Insured and its affiliates and client companies will contain a $75,000.00 deductible per occurrence (the “Within the Deductible Claims”). Shareholder and/or the Insured shall pay GIC $500,000.00 in collateral to be applied by GIC to the Within the Deductible Claims, (the “Deductible Claims Collateral”), each of which claim shall not total more than $75,000.00. Said $500,000.00 shall be paid to GIC in five (5) equal monthly installments in accordance with the following schedule and amounts:

August 16, 2005		$	100,000.00
September 16, 2005		$	100,000.00
October 16, 2005		$	100,000.00
November 16, 2005		$	100,000.00
December 16, 2005		$	100,000.00
Total:		$	500,000.00

GIC shall credit the Insured with interest on the Deductible Claims Collateral on a monthly basis (on the first day of each month) based on the Federal Reserve overnight money market rates as quoted in The Wall Street Journal from time to time during the interim that these funds shall be held by GIC.

Every thirty (30) days, GIC shall bill the Insured for claims paid within the deductible during the immediately completed preceding month. Should the Insured fail to pay such billing within the thirty (30) days following the date of GIC’s billing, GIC shall have the right to cancel and terminate the coverage in accordance with the requirements of the state in which Insured is domiciled. Furthermore, GIC will have the right to offset any other funds of the Insured’s, Shareholder’s or SP 110’s, including but limited to collateral, SP 110 profits, or any other funds available to fulfill such obligations as necessary under this Agreement.

The parties agree and acknowledge that the monies discussed in this Section 1(A) shall not constitute part of the Cash Collateral spelled out and required under the Reinsurance Agreement applicable to the current policy issued to the Insured.

      B. Claims $75,000 or Higher . Shareholder or the Insured shall pay SP 110 $200,000.00 in collateral to be applied to any and all claims totaling or exceeding $75,000.01 (the “Excess Claims”), the pro rata portion of which shall have been sent to SP 110 by GIC in accordance with that certain Reinsurance Agreement between Shareholder and GIC, for which portion SP 110 is responsible to GIC in accordance with said Reinsurance Agreement. Shareholder or the Insured shall pay said $200,000.00 to SP 110 in five (5) equal monthly installments in accordance with the following schedule and amounts:

August 16, 2005		$	40,000.00
September 16, 2005		$	40,000.00
October 16, 2005		$	40,000.00
November 16, 2005		$	40,000.00
December 16, 2005		$	40,000.00
Total:		$	200,000.00

In addition, Shareholder and/or the Insured shall pay GIC, within ten (10) business days of GIC’s notification to them, any Deficit in the Collateral Account resulting from the application of development factors set forth in Section 3(B) of this Agreement.

The parties agree and acknowledge that the $200,000.00 shall constitute part of the Cash Collateral for the Current Policy Year and shall be credited to the Collateral Account immediately upon being paid by Shareholder or the Insured.

Section 2. SP 110 . GIC shall cede reinsurance to SP110 as set forth the Reinsurance Agreement entered into by and between GIC and SP 110 in connection herewith.

Section 3.1. Policy Renewal, Overage and Deficit . The Insured has renewed the above-described coverage with GIC and Shareholder is continuing its participation in SP 110. The Insured was previously covered and participated as indicated above during the policy year that commenced August 16, 2004 and concluded August 15, 2005, (the “First Policy Year”). In that regard, Shareholder and/or the Insured were similarly required to maintain a certain level of collateral in the Collateral Account. GIC shall determine the level needed in the Collateral Account for the Current Policy Year utilizing the following guidelines, it being understood and agreed that references below to aggregate limits shall apply only to the Excess Claims and not in the case of the Within the Deductible Claims:

     A. If at any time GIC determines that an Overage exists in the Collateral Account, that Overage shall be carried over, applied and credited to the new amounts that Shareholder or the Insured will be required to deposit in the Collateral Account in connection with