Document:

Exhibit 10.1

Exhibit 10.1

EXECUTION VERSION

SEPARATION AGREEMENT

This Separation Agreement (this “Agreement”) by and between HealthMarkets, Inc., a Delaware
corporation (the “Company”), and B. Curtis Westen (the “Executive”), is dated as of September
1, 2011.

WHEREAS, the Executive had been employed by the Company as its Executive Vice President and
General Counsel;

WHEREAS, effective August 12, 2011, the Executive resigned from his positions as the Company’s
Executive Vice President and General and from all other positions the Executive held as an officer
or member of the board of directors of any of the Company’s Subsidiaries or affiliates (the
“Resignation Date”);

WHEREAS, the Company and the Executive are parties to an employment agreement dated as of
October 26, 2010 (the “Employment Agreement”) (all capitalized terms not defined herein shall have
the meanings ascribed to them in Section 23 of the Employment Agreement); and

NOW, THEREFORE, the Company and the Executive hereby agree as follows:

1. Resignation. Effective the Resignation Date, the Executive resigned from his
employment with the Company. The Executive hereby agrees to execute any and all additional
documentation to effectuate such resignations upon request by the Company, but he shall be treated
for all purposes as having so resigned upon termination of his employment, regardless of when or
whether he executes any such documentation. The parties agree that the Executive’s resignation
shall constitute a “separation from service” within the meaning of Section 409A of the Code.

2. Separation Payments. Subject to the Executive’s execution and non-revocation of
the release of claims against the Company attached hereto as Exhibit A (the “Release”)
within 30 days following the Resignation Date and the Executive’s continued compliance with the
Restrictive Covenants in accordance with Section 12 of the Employment Agreement, the Company shall
make the following payments in the manner and time frames described below:

(a) the prorata retention payment of $63,800 pursuant to section 9(b) of the Employment
Agreement payable in a lump sum no later than 30 days following the Resignation Date;

 

 

 

(b) an amount equal to the annual bonus that would have been paid to the Executive with
respect to the Company’s 2011 fiscal year pursuant to Section 4(b)(i) of the Employment Agreement
had the Executive remained employed through the date on which annual bonuses are paid to senior
executives of the Company generally, with the actual payment to be based upon the achievement of
the applicable performance goals (and determined based on the exercise of negative discretion no
less favorable to the Executive than that exercised with respect to active senior executives of
the Company generally) with such bonus to be payable no later than March 15, 2012;
provided, however, that any amount payable pursuant to the preceding clause shall
be reduced by the Guaranteed Bonus Payments
(as defined in the Employment Agreement), each in the amount of $43,750, that have been paid
to the Executive on or about March 31, 2011 and June 30, 2011 and will be paid on or about
September 30, 2011 and December 31, 2011 (which, subject to the proviso below, shall be paid as
if the Executive remained employed through each such payment date), in each case pursuant to the
terms and conditions of the executive retention program; provided, further,
however, that the bonus payments under this Section 2(b), other than the bonus payments
that would otherwise be due to the Executive under Section 9(a) of the Employment Agreement, are
subject to the Executive continuing to provide services pursuant to the Consulting Agreement
between the Executive and the Company, dated as of August 25, 2011 (the “Consulting Agreement”),
through December 31, 2011; and

(c) to the extent unvested as of the Resignation Date, the Executive’s Initial LTIP Award
shall fully vest and become non-forfeitable upon the Resignation Date, but shall be paid at such
time as the Initial LTIP Award would otherwise have been paid had the Executive remained employed
with the Company (the earlier of (i) immediately prior to a Change of Control or (ii) on January
26, 2012).

Any payments under this Section 2 to the Executive shall not be taken into account for
purposes of any retirement plan (including any supplemental retirement plan or arrangement) or
other benefit plan sponsored by the Company, except as otherwise expressly required by such plans
or applicable law.

3. Nondisparagement. On and after the Resignation Date, the Executive agrees that he
shall not make, participate in the making of, or encourage or facilitate any other person to make,
any statements, written or oral, which criticize, disparage, or defame the goodwill or reputation
of, the Company, its Subsidiaries or affiliates or any of their respective present or former
directors, officers, employees as a group, The Blackstone Group, Goldman Sachs & Co. and/or DLJ
Merchant Banking Partners. On and after the Resignation Date, the Company and Blackstone each
agree that it shall not, and the Company shall instruct its directors and named executive officers,
in each case as of the Resignation Date, not to make, or participate in the making of, any
statements, written or oral, which disparage or defame the reputation of the Executive.
Notwithstanding the foregoing, nothing in this Section 3 shall prohibit any party from making
truthful statements when required by order of a court or other body having jurisdiction, or as
otherwise may be required by law or legal process or in order to enforce the applicable parties
rights under this Agreement.

4. Confidentiality; Return of Property. On and after the Resignation Date, the
Executive shall continue to be subject to the confidentiality provisions and return of property
provisions set forth in Section 11 of the Employment Agreement, which provisions are incorporated
by reference in this Agreement and shall remain in full force and effect. Notwithstanding the
return of property provisions set forth in Section 11 of the Employment Agreement, the Executive
shall maintain any Company property necessary to provide services under the Consulting Agreement
and shall return such property on or before December 31, 2011.

5. Covenant Not to Compete. For the period beginning on the Resignation Date and
ending on December 31, 2012, the Executive shall continue to be subject to the covenant not to
compete provisions set forth in Section 12 of the Employment Agreement, which provisions are
incorporated by reference in this Agreement and shall remain in full force and effect.

 

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6. Remedies. The Executive acknowledges and agrees that the violation of Section 4
and/or Section 5 above would result in a material detriment to the Company and would cause
irreparable harm to the Company, and that the Company’s remedy at law for any such violation would
be inadequate. In recognition of the foregoing, the Executive agrees that, in addition to any
relief afforded by law or this Agreement, including damages sustained by a breach of this Agreement
and without the necessity of proof of actual damages, the Company shall have the right to enforce
this Agreement by specific remedies, which shall include, among other things, temporary and
permanent injunctions, it being the understanding of the undersigned parties hereto that damages
and injunctions all shall be proper modes of relief and are not to be considered as alternative
remedies.

7. No Mitigation. The Executive is under no obligation to mitigate damages or the
amount of any payment provided for hereunder by seeking other employment or otherwise and, except
as provided in Section 9(f) of the Employment Agreement, such amounts shall not be reduced whether
or not the Executive obtains other employment.

8. Indemnification; Tax Payments. Notwithstanding the other provisions of this
Agreement, the indemnification and other provisions set forth in Section 19 of the Employment
Agreement and the provisions of Section 10 of the Employment Agreement are incorporated by
reference in this Agreement and shall remain in full force and effect; provided,
however, where applicable any reference to “this Agreement” in such sections shall mean
this Separation Agreement. In addition, the Executive’s indemnification agreement with the Company
shall remain in full force and effect.

9. Compliance with Section 409A of the Code. Notwithstanding other provisions of this
Agreement, the provisions relating to Section 409A of the Code set forth in Section 13 of the
Employment Agreement are incorporated by reference in this Agreement and shall remain in full force
and effect. As of the date hereof, the Company believes that the payments, benefits and
entitlements under this Agreement are compliant with Section 409A of the Code.

10. Entire Agreement. As of the date hereof, this Agreement, along with the sections
of the Employment Agreement explicitly referenced herein and the Consulting Agreement, sets forth
the entire agreement of the Company and the Executive with respect to the subject matter hereof,
and, as of the Resignation Date, supersedes in its entirety, except with respect to the sections
explicitly referenced herein, the Employment Agreement, any severance plan, policy or arrangement
of the Company, and the terms and conditions of the executive retention program. Without limiting
the generality of the foregoing, the Executive expressly acknowledges and agrees that except as
specifically set forth in this Agreement and the Consulting Agreement, he is not entitled to
receive any severance pay, severance benefits, compensation or employee benefits of any kind
whatsoever from the Company on and after the Resignation Date.

 

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11. Successors. Notwithstanding the other provisions of this Agreement, the
provisions of Section 16 of the Employment Agreement are incorporated by reference in this
Agreement and shall remain in full force and effect; provided, however, that
any reference to “this Agreement” in such Section 16 shall mean this Separation Agreement.

12. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such State.

13. Notices. For all purposes of this Agreement, all communications, including,
without limitation, notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof confirmed), or five (5)
business days after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three (3) business days after having been sent by a
nationally recognized overnight courier service such as Federal Express, UPS, or Purolator,
addressed to the Company (to the attention of the Secretary of the Company) at its principal
executive offices and to the Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance herewith, except that notices of
changes of address shall be effective only upon receipt.

14. Withholding of Taxes. The tax withholding and other provisions set forth in
Section 15 of the Employment Agreement are incorporated by reference in this Agreement and shall
remain in full force and effect.

15. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company specifically referencing such provision being so modified, waived or
discharged (provided that in the case of any waiver or discharge such waiver or discharge shall
only need to be in a writing signed by the party against whom the waiver or discharge is being
enforced). No waiver by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. The captions used in this Agreement are designed for convenient
reference only and are not to be used for the purpose of interpreting any provision of this
Agreement. For the avoidance of doubt, any reference to an “affiliate” of the Company or any
Subsidiary shall not include any investor in the Company or any entity in which such investor owns
or holds an equity position (other than the Company or any Subsidiary).

16. Counterparts. This Agreement may be executed in one or more counterparts,
including by facsimile signature, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.

 

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IN WITNESS WHEREOF, each of the parties hereto has
duly executed this Agreement as of the date first set
forth above.

_______________________

B. Curtis Westen

	 	 	 	 	 
	 	HealthMarkets, Inc.

 	 
	 	By:  	____________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Solely with respect to Section 3 of this Agreement

Accepted and Agreed to as of the day and year first

written above on behalf of the Blackstone Group

By Blackstone Management Associates IV L.L.C.

_______________________

Name:

Title:

 

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Exhibit A

Release

In consideration of the payments and promises contained in your Separation Agreement with
HealthMarkets, Inc. (the “Company”) dated as of August 25, 2011 (the “Separation Agreement”), and
in full compromise and settlement of any of your potential claims and causes of action relating to
or arising out of your employment relationship with the Company or the termination of that
relationship, and any and all other claims or causes of action that you have or may have against
the Company Affiliates (as defined below) up to the date of execution of this release, except to
the extent such claims or causes of action are not released by you in Paragraph 2 hereof (the
“Release”), you hereby:

1. knowingly and voluntarily agree to irrevocably and unconditionally waive and release the
Company and any other entity controlled by, controlling or under common control with the Company,
and their respective predecessors and successors and their respective directors, officers,
employees, representatives, attorneys, including all persons acting by, through, under or in
concert with any of them (collectively, the “Company Affiliates”), from any and all charges,
complaints, claims, liabilities, obligations, promises, sums of money, agreements, controversies,
damages, actions, lawsuits, rights, demands, sanctions, costs (including attorneys’ fees), losses,
debts and expenses of any nature whatsoever, existing on, or at any time prior to, the date hereof
in law, in equity or otherwise, which you, your successors, heirs or assigns had or have upon or by
reason of any fact, matter, cause, or thing whatsoever, and specifically including any matter that
may be based on the sole or contributory negligence (whether active, passive or gross) of any
Company Affiliate. This Release includes, but is not limited to, a release of all claims or causes
of action arising out of or relating to your employer-employee relationship with the Company or the
termination of that relationship, and any other claim, including, without limitation, alleged
breach of express or implied written or oral contract, alleged breach of employee handbook, alleged
wrongful discharge, and tort claims, or claims or causes of action arising under any federal,
state, or local law, including, but not limited to, the Age Discrimination in Employment Act, 29
U.S.C. § 621, et seq., the Reconstruction Era Civil Rights Act of 1866 and 1871, 42 U.S.C. §§ 1981
and 1983, the Civil Rights Act of 1964, Title VII, 42 U.S.C. §§ 2000(e) et seq., The Civil Rights
Act of 1991, 42 U.S.C. § 1981(a) et seq., the Equal Pay Act of 1963, 29 U.S.C. § 206(d) et seq.,
the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq. the Rehabilitation Act of
1973, 29 U.S.C. § 701 et seq., the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§
2101-2109, the Sarbanes-Oxley Act of 2002, as amended, and any claim under any other statutes of
the State of Delaware, or other jurisdictions, and the facts, circumstances, allegations, and
controversies relating or giving rise thereto that have accrued to the date of execution of this
Release;

2. agree that you will not commence, maintain, initiate, or prosecute, or cause, encourage,
assist, volunteer, advise or cooperate with any other person to commence, maintain, initiate or
prosecute, any action, lawsuit, proceeding, investigation, or claim before any court, legislative
body or committee, or administrative agency (whether state, federal or otherwise) against the
Company Affiliates relating to any claims, liabilities, obligations, promises, sums of money,
agreements, controversies, damages, actions, lawsuits, rights, demands, sanctions, costs (including
attorneys’ fees), losses, debts and expenses described in the foregoing Paragraph 1;

 

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provided, however, that, notwithstanding anything to the contrary in the
foregoing, nothing hereunder (including Paragraph 1 hereof) shall be deemed to affect, impair or
diminish in any respect (or deemed to be a release by you of any claims or an agreement not to sue
or bring an action with respect to): (i) any vested rights as of the date of termination of
employment or entitlement you may have under the HealthMarkets 401(k) and Savings Plan; (ii) any
other vested rights as of the date of termination of employment you may have under any plan or
program in which you have participated in your capacity as an employee and/or director of the
Company or any other Company Affiliate; (iii) your right to seek to collect unemployment benefits
that you may be entitled to as a result of your employment with the Company or your right to seek
benefits under workers’ compensation insurance, if applicable; (iv) your rights to enforce this
Release or the Separation Agreement, including but not limited to your right to bring a claim for
breach of this Release or the Separation Agreement; (v) any rights you may have under Section 9
(Indemnification; Tax Payments) of the Separation Agreement; (vi) any rights to indemnification
and/or advancement of expenses that you have or may have under the terms of the Company’s Amended
and Restated Bylaws and/or the Company’s Certificate of Incorporation or any rights you have
pursuant to any applicable directors’ and officers’ liability insurance policies; (vii) your rights
as a shareholder of the Company; or (viii) your right to bring a claim under the Age Discrimination
in Employment Act to challenge the validity of this Release, to file a charge under the civil
rights statutes, or to otherwise participate in an investigation or proceeding conducted by the
Equal Employment Opportunity Commission or other investigative agency;

3. acknowledge that: (i) this entire Release is written in a manner calculated to be
understood by you; (ii) you have been advised to consult with an attorney before executing this
Release; (iii) you were given a period of at least twenty-one days within which to consider this
Release; and (iv) to the extent you execute this Release before the expiration of the
twenty-one-day period, you do so knowingly and voluntarily and only after consulting your attorney.
You shall have the right to cancel and revoke this Release during a period of seven days following
the date on which you execute it, and this Release shall not become effective until the day after
the expiration of such seven-day period (the “Revocation Date”). In order to revoke this Release,
you shall deliver to the Company, prior to the expiration of said seven-day period, a written
notice of revocation. Upon such revocation, this Release shall be null and void and of no further
force or effect;

4. agree to make yourself reasonably available to the Company following the date of your
termination to assist the Company and its subsidiaries and affiliates and their respective
predecessors and successors, as may be requested by the Company at mutually convenient times and
places taking into account your other business and personal commitments, with respect to the
business of the Company and pending and future litigations, arbitrations, governmental
investigations or other dispute resolutions relating to or in connection with the Company with
respect to matters of which you have relevant knowledge. Notwithstanding the foregoing, you shall
not be required to cooperate if such cooperation is adverse to your legal interests. In addition,
the Company agrees to pay promptly any reasonable expenses incurred by you in connection with such
cooperation, including, without limitation, business class airfare, reasonable meals, reasonable
hotels and reasonable legal fees to the extent the Company and you agree (the Company’s agreement
not to be unreasonably withheld) separate representation is warranted by the circumstances.

 

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5. agree not to, either in writing or by any other medium, make any disparaging or derogatory
statement about the Company and its affiliates and subsidiaries and their respective predecessors
and successors or any of their respective officers, directors, employees, affiliates, subsidiaries,
successors, assigns or businesses, as the case may be; provided, however, that you
may make such statements as are necessary to comply with law and the foregoing shall not prohibit
you from making any truthful statements that are necessary to defend yourself in an arbitration or
judicial proceeding.

_______________________

B. Curtis Westen

	 	 	 	 	 
	 	HealthMarkets, Inc.

 	 
	 	By:  	____________________
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

8Exhibit 10.2

Exhibit 10.2

EXECUTION VERSION

INDEPENDENT CONTRACTOR CONSULTING AGREEMENT

This INDEPENDENT CONTRACTOR CONSULTING AGREEMENT (this “Agreement”) is entered into as of September
1, 2011, by and between HealthMarkets, Inc., a Delaware company (“HealthMarkets”)
and B. Curtis Westen, an individual residing at 759 International Isle Drive, Castle Rock, Colorado
80108 (“Consultant”).

WHEREAS, HealthMarkets desires to retain the services of Consultant and Consultant wishes to
provide such services to HealthMarkets.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, the parties hereby agree as follows:

1. Engagement and Services. HealthMarkets engages Consultant on an “as needed” basis, and
Consultant accepts such engagement with HealthMarkets, for the Term (as defined in Section 6), to
perform legal consulting services (the “Services”). Consultant shall perform the Services in a
competent and professional manner and upon the terms and subject to the conditions set forth in
this Agreement.

2. Compensation. In consideration for Consultant’s performance of the Services pursuant to
this Agreement, HealthMarkets shall pay Consultant seventeen thousand and forty dollars ($17,040)
per week for each week of the Term. Consultant shall bill Healthmarkets at the end of each
calendar month for the total amount then owing for Services. Payment will be due within fifteen
(15) days of receipt of the invoice from Consultant. HealthMarkets shall reimburse Consultant for
all reasonable and documented out-of-pocket expenses incurred in furtherance of the Services. Such
expenses shall be reimbursable in accordance with established business expense policies of
HealthMarkets and shall be paid by HealthMarkets within thirty (30) days of receipt of satisfactory
documentation. Except as specifically provided above, Consultant shall be entitled to no other
compensation or benefits from HealthMarkets with respect to the Services, shall not be eligible to
participate in any employee benefit plans of HealthMarkets or any HealthMarkets Affiliate (as
defined below) and shall not be credited with service or age credit for purposes of eligibility,
vesting or benefit accrual under any employee benefit plan of HealthMarkets or any HealthMarkets
Affiliate.

3. Records. Consultant shall maintain complete, true and correct records relating to all
Services performed under this Agreement for a period of at least seven (7) years or such longer
period as may be required by law or regulations. Consultant shall provide to HealthMarkets, at
HealthMarkets’ request and at no cost to HealthMarkets, copies of documents supporting all fees and
expenses invoiced to HealthMarkets. For the avoidance of doubt, this Section 3 does not imply any
required level of Services during the Term.

 

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4. Audit. HealthMarkets will also have the right, at HealthMarkets’ expense and
from time to time during the Term of this Agreement and thereafter, to audit all records of
Consultant in connection with fees and expenses invoiced to HealthMarkets. For the avoidance of
doubt, this Section 4 does not imply any required level of Services during the Term.

5. Taxes. HealthMarkets shall not be obligated to pay any taxes based on Consultant’s
income, capital, franchise, or investment, or on any property owned by Consultant.

6. Term. The term of this Agreement (the “Term”) shall commence on August 13, 2011 (the
“Effective Date”) and shall continue until December 31, 2011, unless earlier terminated pursuant to
Section 9 of this Agreement. The Term of this Agreement may be extended upon mutual written
agreement of the parties.

7. No Agency. The parties expressly intend and agree that Consultant shall not be, and
shall not hold himself out as being, an agent of HealthMarkets. Consultant shall have no authority
to bind HealthMarkets to any agreement or obligation, express or implied.

8. Independent Contractor. The parties expressly intend and agree that Consultant is
acting as an independent contractor and not as an employee, affiliate or agent of HealthMarkets.
This Agreement shall not be construed as creating a partnership, joint venture, agency or
employment relationship. Consultant retains sole and absolute discretion, control, and judgment in
the manner and means of carrying out the assignments hereunder. Consultant understands and agrees
that he shall not be entitled to any of the rights and privileges established for HealthMarkets’
employees, including, but not limited to, the following: retirement benefits, medical insurance
coverage, life insurance coverage, disability insurance coverage, severance pay benefits, paid
vacation and sick pay, overtime pay, or any other benefit which HealthMarkets may offer to full or
part-time employees. Consultant understands and agrees that HealthMarkets will not pay or withhold
from the compensation paid to Consultant pursuant to this Agreement any sums customarily paid or
withheld for or on behalf of employees for income tax, unemployment insurance, social security,
workers’ compensation or any other withholding tax, insurance, or payment pursuant to any law or
governmental requirement, and all such payments as may be required by law are the sole
responsibility of Consultant. Consultant agrees to hold HealthMarkets harmless against, and
indemnify HealthMarkets for, any of such payments or liabilities for which HealthMarkets may become
liable with respect to such matters. HealthMarkets shall have no responsibility for any of
Consultant’s debts, liabilities or other obligations, or for the intentional, reckless, negligent
or unlawful acts or omissions of Consultant.

9. Termination.

(a) Termination for Breach. In the event of a material breach of this Agreement by
either party, the other party may terminate this Agreement immediately upon delivery of written
notice to the party in breach.

 

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(b) Fees. Upon the expiration or termination of this Agreement,
HealthMarkets shall pay to Consultant any unpaid and undisputed fees due for Services rendered
by Consultant as of the date of termination. Fees for any partial week in which Services are
performed during the Term will be pro-rated. Consultant shall not have any further entitlement to
compensation hereunder.

(c) Return of Materials Upon Termination of Agreement. Upon termination or expiration
of this Agreement, Consultant will promptly deliver to HealthMarkets originals and copies of all
materials, property, documents, data and other information developed or created in connection with
the performance of the Services, belonging to HealthMarkets or pertaining to any Confidential
Information (as defined below). Consultant shall not retain any Confidential Information unless
specifically authorized to do so in writing by HealthMarkets. Consultant shall not remove from
HealthMarkets’ premises or otherwise transfer in any way, including without limitation by
electronic means, any materials, property, documents or other information, or any reproduction or
excerpt thereof, belonging to HealthMarkets or containing or pertaining to any such Confidential
Information.

10. Confidential Information.

(a) Definition. For purposes of this Agreement, “Confidential Information” means all
information, regardless of the format in which it is provided, of HealthMarkets or its current or
future parents, subsidiaries, affiliates (collectively, “HealthMarkets Affiliates”) or its or their
suppliers, customers or other parties with whom they do business, which is provided, disclosed, or
developed in connection with the parties’ obligations pursuant to this Agreement, whether or not
such information is marked “Confidential.” Confidential Information shall include, without
limitation (i) HealthMarkets’ trade secrets, methodologies, business plans, supplier, customer and
provider lists, customer and provider data, plan or product design, cost and price data, marketing
information, software, computer and telecommunications systems, memoranda, papers, letters, e-mail,
notes, plans, documentation, records, analyses, studies and all copies thereof, relating to the
existing or planned business or technology of HealthMarkets or any HealthMarkets Affiliate; (ii)
any Work Product (as hereinafter defined), software in source code or object code, deliverables,
processes, specifications, or data developed by Consultant in connection with this Agreement; and
(iii) this Agreement and the terms contained herein, including, without limitation, the terms
regarding compensation set forth in this Agreement and the Schedules hereto, except to the extent
that Consultant is required to disclose such information in accordance with Section 12(f) of this
Agreement.

(b) Consultant Obligations. In performing the Services, Consultant may be exposed to
Confidential Information. Consultant agrees not to sell, license, transfer, publish, disclose,
display or otherwise make available to others, or to use any Confidential Information except for
the purpose of providing Services, unless Consultant first obtains the prior written consent of
HealthMarkets, or, as applicable, the owner of such Confidential Information. Consultant shall not
make, or permit to be made, any copies of Confidential Information, except in connection with the
Services. Consultant shall not, and shall not permit, the removal of any Confidential Information
(or any copy or summary thereof) from any HealthMarkets site or any other location at which the Services
are performed.

 

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(c) HIPAA Business Associate Agreement. Unless and until the parties execute such
documents and agreements as may be required to comply with the Health Insurance Portability &
Accountability Act of 1996 (“HIPAA”), including without limitation the Standards for Privacy of
Individually Identifiable Health Information codified at 45 CFR part 160 and part 164, subparts A
and E (the “Privacy Rule”), and other laws controlling the disclosure of health information,
Consultant shall not request of or accept from HealthMarkets, and HealthMarkets shall not provide
to Consultant, “protected health information” (as defined in the Privacy Rule) unless such
information is de-identified in compliance with 45 CFR §164.514.

11. Proprietary Rights.

(a) All results of any Services performed under this Agreement, including without limitation
any and all plan or product design, software (including object and source code), deliverables,
computer system designs, documentation, know-how, trade secrets, inventions (whether or not
patentable or reduced to practice), discoveries, methods, improvements, processes, developments,
works of authorship, materials, or data that Consultant makes, conceives, or devises, either solely
or jointly, as a result of Services performed hereunder (whether or not such service is completed)
(collectively, the “Work Product”), shall be deemed to be a work made for hire and made in the
course of the Services rendered hereunder.

(b) All right, title, and interest in and to the Work Product shall vest in HealthMarkets, and
Consultant shall have no right, title, or interest in or to such Work Product. To the extent that
title to any Work Product may not, by operation of law, vest in HealthMarkets or such Work Product
may not be considered work made for hire, all rights, title and interest therein are hereby
irrevocably assigned to HealthMarkets. All Work Product shall belong exclusively to HealthMarkets,
with HealthMarkets having the right to obtain and to hold in its own name, copyrights,
registrations or such other protection as may be appropriate to the subject matter, and any
extensions and renewals thereof. Consultant agrees to give HealthMarkets and any person designated
by HealthMarkets, reasonable assistance, in connection with any efforts by HealthMarkets to perfect
the rights defined in this Section 11(b). Such assistance shall include, without limitation,
Consultant’s assistance in the preparation of, and the execution of, any papers that HealthMarkets
may deem necessary or helpful for HealthMarkets to obtain, at HealthMarkets’ expense, any patents,
copyrights, trademarks or other proprietary rights. HealthMarkets shall reimburse Consultant for
reasonable and documented out-of-pocket expenses incurred by Consultant under this provision.

(c) Unless otherwise requested by HealthMarkets, upon the completion of the Services to be
performed hereunder or upon the earlier termination of this Agreement, Consultant shall immediately
turn over to HealthMarkets all Work Product developed hereunder. All Work Product reduced to
tangible form shall bear HealthMarkets’ copyright and trade secret notices, or such other
proprietary notice as HealthMarkets may specify.

 

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12. Consultant Warranties. Consultant warrants that:

(a) Consultant has full rights and authority to execute, deliver and perform his obligations
under this Agreement.

(b) During the Term of this Agreement, all Services will be performed in accordance with the
highest professional standards and in accordance with this Agreement.

(c) HealthMarkets shall receive free, good and clear title to all Work Product provided under
this Agreement.

(d) No Work Product provided hereunder, or process or methodology used in performing the
Services, infringes or shall infringe on any third party intellectual property right or contractual
right.

(e) Consultant shall comply with all applicable federal, state and local laws, regulations,
and ordinances, and HealthMarkets’ standards and specifications (as communicated in writing to
Consultant), in the performance of his obligations hereunder.

(f) The Consultant hereby represents to HealthMarkets that Consultant is not subject to any
employment agreement, non-competition agreement, non-disclosure agreement or other agreement,
covenant, understanding or restriction that would prohibit Consultant from executing this Agreement
or providing services hereunder, or which would in any manner limit or affect his obligations
hereunder. The Consultant further represents to HealthMarkets that he has disclosed his
relationship with HealthMarkets to any other person or entity to whom Consultant may be required to
disclose in accordance with the terms of any agreement or understanding, implied or otherwise.

13. Indemnity.

(a) Consultant agrees to indemnify, defend, and hold harmless HealthMarkets and its parents,
subsidiaries, affiliates, officers, directors, and employees, from any and all claims, actions,
liabilities, losses, damages, costs and expenses (including, but not limited to, reasonable
attorneys’ fees) to the extent based on:

(i) infringement of any patent, copyright, trademark, trade secret or other third party
intellectual property right or contractual right based on any Work Product or deliverable furnished
to HealthMarkets by Consultant pursuant to the terms of this Agreement or the use thereof by
HealthMarkets;

 

5

 

(ii) any breach of this Agreement by Consultant; and

(iii) personal injury or damage to property arising out of the fault or negligence of
Consultant.

(b) HealthMarkets agrees to indemnify, defend, and hold harmless Consultant from any and all
claims, actions, liabilities, losses, damages, costs and expenses (including, but not limited to,
reasonable attorneys’ fees) to the extent based on any breach of this Agreement by HealthMarkets.

14. Non-Solicitation. During the term of this Agreement and for twelve (12) months
following the expiration or termination of this Agreement for any reason, Consultant shall not,
whether on his own behalf or on behalf of some other person or entity, (i) hire or seek to hire any
person who is at that time an employee of HealthMarkets or any HealthMarkets Affiliate, or who had
left the employ of HealthMarkets or any HealthMarkets Affiliate within six (6) months prior
thereto, to whom Consultant was introduced as a result of the Services or (ii) directly or
indirectly induce or encourage any such employee to leave the employ of HealthMarkets or any
HealthMarkets Affiliate. Notwithstanding the foregoing, Consultant may employ in the future any
such individuals currently employed or affiliated with HealthMarkets or any HealthMarkets Affiliate
who make initial contact by their volition, instead of by initial contact instituted by Consultant,
or whose initial contact is through indirect solicitation by general advertisement to the industry
at large.

15. Remedies. Consultant acknowledges and agrees that the violation of Sections 10, 11 and
14 above would result in a material detriment to HealthMarkets and would cause irreparable harm to
HealthMarkets, and that HealthMarkets’ remedy at law for any such violation would be inadequate.
In recognition of the foregoing, Consultant agrees that, in addition to any relief afforded by law
or this Agreement, including damages sustained by a breach of this Agreement and without the
necessity of proof of actual damages, HealthMarkets shall have the right to enforce this Agreement
by specific remedies, which shall include, among other things, temporary and permanent injunctions,
it being the understanding of the undersigned parties hereto that damages and injunctions all shall
be proper modes of relief and are not to be considered as alternative remedies.

16. Section 409A. This Agreement is intended to comply with the provisions of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury regulations relating
thereto or an except to Section 409A of the Code. For purposes of compliance with Section 409A of
the Code, each payment of compensation under this Agreement shall be treated as a separate payment
of compensation, and in not event may Consultant, directly or indirectly, designate the calendar
year of any payment under this Agreement. All reimbursements provided under this Agreement shall
be provided in accordance with the requirements of Section 409A of the Code, including, where
applicable, the requirement that (a) the amount of expenses eligible for reimbursement during one
calendar year shall not affect the amount of expenses eligible for reimbursement in any other
calendar year; (b) reimbursement of an eligible expense shall be made no later than the last day of
the calendar year following the
calendar year in which the expense is incurred; and (c) the right to any reimbursement shall not be
subject to liquidation or exchange for another benefit.

 

6

 

17. Governing Law and Venue. The validity, interpretation, construction and performance of
this Agreement will be governed by and construed in accordance with the substantive laws of the
State of Delaware, without giving effect to the principles of conflict of laws of such State.
HealthMarkets and Consultant agree that any dispute or claim arising from this Agreement shall be
heard in the appropriate state or federal court in the State of Delaware, and the parties hereby
irrevocably submit to the jurisdiction of such courts.

18. Amendments. No amendment or modification of the terms or conditions of this Agreement
shall be valid unless in writing and signed by the parties hereto.

19. Successors and Assigns. The rights and obligations of HealthMarkets under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of
HealthMarkets. Consultant shall not be entitled to assign any of Consultant’s rights or
obligations under this Agreement in whole or in part, and any attempt to make such assignment shall
be void. HealthMarkets may assign this Agreement, or any right or obligation hereunder, upon
written notice to Consultant, to any HealthMarkets Affiliate without the consent of Consultant.

20. Entire Agreement. This Agreement (including any attached Schedules and Exhibits),
along with the Separation Agreement, dated as of August 25, 2011, sets forth the complete
understanding of the parties with respect to the appointment of Consultant and supersedes any and
all prior or contemporaneous communications, discussions, agreements, understandings, promises,
and/or representations made by either party to the other, whether oral, written, or in any other
form, not expressly included herein.

21. Notices. All notices, requests, demands and other communications provided for herein
shall be in writing, shall be delivered by hand, mailed by registered or certified first-class
mail, return receipt requested, postage prepaid or by telecopier or overnight courier (with proof
of delivery requested), shall be deemed given when received and shall be addressed to the parties
hereto at their respective address listed below or to such other persons or addresses as the
relevant party shall designate as to itself or himself from time to time in writing delivered in
like manner:

If to HealthMarkets, to:

HealthMarkets, Inc.

9151 Boulevard 26

North Richland Hills, Texas 76180

Attention: Secretary

If to Consultant, to:

B. Curtis Westen

At the address last on the records of HealthMarkets

 

7

 

22. Severability. If any provision of this Agreement is adjudged by any court to be void
or unenforceable in whole or in part, the remainder of the Agreement shall remain valid and
enforceable and the invalid portion shall be amended only to the extent necessary to render it
valid and enforceable.

23. Counterparts. This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and the same agreement.

24. Waiver. A failure of either party to exercise any right provided for herein shall not
be deemed to be a waiver of any right hereunder.

25. Survival. Sections 3, 4, 8, 9(b) and (c), 10, 11, 13, 14, 17, 21 and this Section 25
shall survive any termination or expiration of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

_____________________________

B. Curtis Westen

HEALTHMARKETS, INC.

				
	By:	 	______________________	 
	Name:	 	______________________	 
	Title:	 	______________________	 
	Date:	 	______________________	 

 

8

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