EXHIBIT 10.21
EMPLOYEE LEASING AGREEMENT
THIS EMPLOYEE LEASING AGREEMENT is entered into as of December 22,
1998, between LTCAmerica Holding, Inc., a Minnesota corporation ("LTCA"), and
Life USA Holding, Inc., a Minnesota corporation ("LUSA"),
RECITALS
WHEREAS, LUSA employs persons with knowledge and experience in the
administration of insurance products, including without limitation underwriting,
marketing, agent compensation, policy administration, claims processing,
compliance, actuarial services and benefits and claims and information services;
and
WHEREAS, LTCA is a newly formed insurance holding company which desires
to lease certain employees from LUSA to provide administrative services to LTCA
and an insurance subsidiary to be acquired by LTCA and known as Capitol Bankers
Life Insurance Company ("Insurance"),
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
LEASED EMPLOYEES
SECTION 1.1. GENERAL PARAMETERS. It is the intention of the parties to
this Agreement that LUSA shall make available for lease by LTCA those employees
required by LTCA to provide certain services to market and administer the
business of LTCA and Insurance, subject at all times to the business
requirements of LUSA (the "Leased Employees"). Nothing herein shall require LTCA
to accept any employee identified by LUSA, and LTCA shall at all times be free
to hire its own employees or enter into separate arrangements with LUSA or third
parties for the outsourcing of services.
SECTION 1.2. SPECIFICATION OF LEASED EMPLOYEES. LTCA shall specify to
LUSA the positions for which it requires Leased Employees, including the skill
sets and experience for each position. Promptly following receipt of such
information, LUSA shall prepare and submit to LTCA a list of employees of LUSA
satisfying LTCA's requirements and information with respect to the skill set and
experience of each such employee. If LUSA does not currently have employees with
the appropriate skill sets and experience, it shall secure such employees as
expeditiously as practicable.
SECTION 1.3. SELECTION OF LEASED EMPLOYEES. Upon receipt of information
identifying those persons available for lease by LTCA, LTCA shall determine the
employees of LUSA that it wishes to lease under this Agreement, which
determination shall be made by LTCA in its sole discretion.
SECTION 1.4. CONTROL AND DIRECTION OF LEASED EMPLOYEES. Nothing herein
shall be construed as altering the employer/employee relationship of LUSA and
the Leased Employees and the ultimate right of LUSA to control and direct the
services provided by the Leased Employees pursuant to this Agreement, provided
that LTCA shall be solely responsible for the means and details by which those
services are provided, including without limitation the authority to set work
rules and hours, establish job descriptions, allocate and reallocate job
responsibilities, review performance and change job assignments. If at any time
LTCA determines that it no longer needs the services of a particular Leased
Employee, whether by reason of a change in LTCA's requirements, dissatisfaction
of the services of a Leased Employee or any other reason, LTCA may notify LUSA
that the particular Leased Employee is no longer subject to the provisions of
this Agreement and is therefore solely the responsibility of LUSA.
SECTION 1.5. COMPENSATION OF LEASED EMPLOYEES. LUSA shall be solely
responsible for compensating all Leased Employees, including salary and
benefits, required premiums for unemployment and workers' compensation insurance
and employer FICA contributions, and shall be solely responsible for all lawful
payroll deductions including federal and state income taxes and employee's FICA
contributions. All Leased Employees shall be entitled to all incidents of
employment by LUSA, including without limitation LUSA stock options, bonuses,
personal days, health and medical benefits and 401(k) contributions. Salaries of
Leased Employees shall be established by LUSA, subject to such modifications as
are mutually acceptable to LUSA and LTCA.
SECTION 1.6. PAYMENT FOR LEASED EMPLOYEES. LTCA shall provide LUSA with
all information reasonably requested by it in order to provide compensation to
Leased Employees, including identification of work and personal leave days. LTCA
shall reimburse LUSA for all costs attributable to compensation and the
administration of employees and employee records of the Leased Employees on or
before the 15th and the last day of each calendar month based on a statement
provided to LTCA by LUSA containing such information as is reasonably required
by LTCA.
SECTION 1.7. NONDISCRIMINATION. LTCA agrees that no Leased Employee
will be denied work or subject to different treatment under this Agreement on
the grounds of race, color, national origin or sex. LTCA further agrees that it
will comply with the provisions of the Civil Rights Act of 1964 and other
applicable local, state and federal employment laws and the regulations which
implement such laws.
SECTION 1.8. MUTUAL COOPERATION. Notwithstanding anything herein to the
contrary, LTCA and LUSA will cooperate with each other in the defense of any
claim brought by a Leased Employee against either party.
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ARTICLE II
INSURANCE
SECTION 2.1. GENERAL LIABILITY INSURANCE. During the term of this
Agreement, the Leased Employees shall be covered by LTCA's general liability
insurance with limits reasonably acceptable to LUSA. LUSA shall be named as an
additional insured on such insurance. At the request of LUSA, LTCA shall provide
LUSA with a certificate or other proof that such insurance is in effect. The
requirements of this Section 2.1 may be satisfied by inclusion of LTCA under
LUSA's insurance policies with the appropriate reimbursement by LTCA to LUSA.
SECTION 2.2. PROFESSIONAL LIABILITY INSURANCE. During the term of this
Agreement, LUSA shall carry and pay the premiums on professional liability
insurance providing coverage and protection for LTCA and LUSA with respect to
acts or omissions in connection with services performed by the Leased Employees.
LUSA shall have control over the settlement of any claims or litigation brought
against it or LTCA as a result of the acts or omissions of the Leased Employees
while providing services to LTCA. Settlement of any such claim or litigation
against LUSA or LTCA will not be made without the prior written consent of LTCA.
LUSA agrees to indemnify and hold LTCA harmless from and against any liability,
claim, loss, attorneys' fees, interest or other costs or expenses of whatever
kind or nature incurred by LTCA as a result of either of the deductible under
any policy of professional liability insurance or the coverage or limits of
coverage under any such policy. At the request of LTCA, LUSA shall provide LTCA
with a certificate or other proof that the insurance required by this Section
2.2 is in effect. The insurance required by this Section shall be deemed to be
primary as against any insurance carried by LTCA, including self-insurance by
LTCA. The requirements of this Section 2.2 with respect to professional
liability insurance may be satisfied by inclusion of LTCA under LUSA's insurance
policies with appropriate reimbursement by LTCA to LUSA.
ARTICLE III
INDEMNIFICATION
SECTION 3.1. INDEMNIFICATION BY LUSA. LUSA agrees to indemnify and hold
LTCA harmless from any and all liability, loss, expense (including reasonable
attorneys' fees and costs), or other claims for injury or damages arising out of
the performance of duties by the Leased Employees for LTCA, including without
limitation, those related to legally required employment taxes, alleged
violations of the Fair Labor Standards Act or alleged violations of any other
law, regulation or ordinance applicable to the employment of employees, except
for those claims which arise out of the gross negligence or intentional
misconduct of LTCA, its officers, agents or employees.
SECTION 3.2. INDEMNIFICATION BY LTCA. LTCA agrees to indemnify and hold
LUSA harmless from any and all liability, loss, expense (including reasonable
attorneys' fees and costs), or other claims for injury or damages arising out of
the performance of this Agreement by LTCA, including without limitation those
related to the supervision and work conditions of the
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Leased Employees, except for those claims which arise out of the gross
negligence or intentional misconduct of LUSA, its officers, agents or employees.
ARTICLE IV
TERM AND TERMINATION OF AGREEMENT
SECTION 3.1. TERM. This Agreement shall commence on the date hereof and
shall continue for a term ending on December 31, 1999, unless terminated earlier
pursuant to Section 3.2 hereof.
SECTION 3.2. TERMINATION OF AGREEMENT. This Agreement is subject to
termination upon the occurrence of any one of the following events:
(a) At any time by the mutual written agreement of LTCA and LUSA, or
(b) At the end of the initial term or any extension thereof if either
party gives notice of termination not later than December 1 of any year.
(c) By the nondefaulting party upon a material default by the other
party of any condition of this Agreement and failure to cure such default within
5 days after written notice to the defaulting party specifying the default,
provided that the nondefaulting party shall inform the defaulting party of such
termination by written notice.
ARTICLE 5
MISCELLANEOUS PROVISIONS
SECTION 5.1. NONCREATION OF THIRD PARTY RIGHTS. Nothing in this
Agreement confers upon or creates any rights or claims for any person or entity
not a party to this Agreement, including, but not limited to, any Leased
Employee, and this Agreement may not be the basis for any claim of any nature
whatsoever by any such person or entity against LTCA and/or LUSA. Further,
nothing in this Agreement is intended in any way to create any contractual or
other rights for any Leased Employee against either LTCA or LUSA. This Agreement
shall not constitute an express or implied contract, promise, commitment or
guarantee of employment, for any period or duration, by either LTCA and/or LUSA
with any Leased Employee.
SECTION 5.2. RELATIONSHIP OF PARTIES. In making and performing this
Agreement, the parties hereto act and shall act at all times as independent
contractors, and nothing contained in this Agreement shall be construed or
implied to create a partnership or joint venture between the parties. LUSA and
LTCA each expressly reserve the right to enter into the same or similar
arrangements with other individuals or organizations.
SECTION 5.3. BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their successors
and assigns and may not be assigned to any other person without the prior
written consent of the other party.
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SECTION 5.4. ENTIRE AGREEMENT. This Agreement represents the entire
understanding between the parties and cannot be amended, altered, supplemented,
modified or waived, in whole or in part, except by a writing duly signed by both
parties.
SECTION 5.5. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person or received by confirmed facsimile or by
registered or certified mail (postage prepaid, return receipt requested)
addressed to the respective parties, as follows:
If to LUSA: Life USA Holding, Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 00
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx, Chief Operating Officer
If to LTCA: LTCAmerica Holding, Inc.
000 Xxxxx Xxxxxxx 000, Xxxxx 00
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxxxx, Chief Operating Officer
SECTION 5.6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed effective as of the date set forth above.
LIFE USA HOLDING, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Name:
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Title: CFO
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LTCAMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name:
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Title: CFO
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