Document:

exv10w1

EXHIBIT 10.1

THIS SECOND AMENDMENT AGREEMENT is dated and effective as of the 31st day of July, 2009.

B E T W E E N:

ANIXTER CANADA INC.

a corporation incorporated under the laws of Canada

as Borrower

- and -

THE GUARANTORS FROM TIME TO TIME PARTY

TO THE CREDIT AGREEMENT

as Guarantors

- and -

THE LENDERS FROM TIME TO TIME PARTY

TO THE CREDIT AGREEMENT

as Lenders

- and -

THE BANK OF NOVA SCOTIA

a bank to which the Bank Act (Canada) applies,

in its capacity as administrative agent hereunder

as Administrative Agent

RECITALS:

	A.	 	The Borrower, the Guarantors, the Agent and the Lenders are parties to a Credit Agreement
dated as of November 18, 2005, as amended by a First Amendment Agreement (the “First Amendment
Agreement”) dated as of July 5, 2007 (as so amended, the “Existing Credit Agreement”).

	B.	 	The Borrower and the Lenders have agreed to certain amendments to the terms and conditions in
the Existing Credit Agreement and the parties are entering into this Second Amendment
Agreement to give effect thereto and to the other matters set forth herein.

     NOW THEREFORE in consideration of the premises and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:

Section 1 —  Amendment to Definitions

     Section 1.1.112 of the Existing Credit Agreement is deleted.

Second Amendment Agreement

 

 

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     Section 1.1.129 of the Existing Credit Agreement is deleted and replaced with the following
provision:

	 	  1.1.129	 	“U.S. Credit Agreement” means the amended and restated five-year revolving
credit agreement dated as of April 20, 2007 among Anixter Inc. and various
subsidiaries of Anixter Inc., as borrowers, Bank of America, N.A., as
administrative agent, swing line lender and L/C issuer, Wells Fargo Bank, N.A.,
as syndication agent, JPMorgan Chase Bank, NA, The Bank of Nova Scotia and
Wachovia Bank, N.A., as co documentation agents, and the lenders party thereto
from time to time, as amended by the First Amendment dated as of September 26,
2007 and the Second Amendment dated as of July 23, 2009.

Section 2 — Amendment to Credit

     Section 2.6(1) of the Existing Credit Agreement is deleted and replaced with the following
provision:

	 	2.6(1)	 	 The Applicable Margin relating to interest rates, Banker’s Acceptance Fees,
L/C commissions and Standby Fees will vary and be calculated based on the
Relevant Rating as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Banker’s Acceptance	 	 
	 	 	Applicable Margin for	 	Fees, L/C Commissions	 	Standby Fee
	 	 	Prime Rate Advances	 	and Applicable Margin	 	(% per annum)
	Relevant Rating	 	and Base Rate Advances	 	for LIBOR Advances	 	350%	 	<50%
	(S&P/Moody’s/Fitch)	 	(% per annum)	 	(% per annum)	 	utilization	 	utilization
	Greater than or
equal to
BBB+/Baa1/BBB+
	 	 	0.40	%	 	 	1.40	%	 	 	0.15	%	 	 	0.30	%
	BBB/Baa2/BBB
	 	 	0.70	%	 	 	1.70	%	 	 	0.20	%	 	 	0.35	%
	BBB-/Baa3/BBB-
	 	 	1.00	%	 	 	2.00	%	 	 	0.25	%	 	 	0.40	%
	BB+/Ba1/BB+
	 	 	1.50	%	 	 	2.50	%	 	 	0.50	%	 	 	0.65	%
	BB/Ba2/BB
	 	 	1.75	%	 	 	2.75	%	 	 	0.50	%	 	 	0.65	%
	Less than or equal
to BB-/Ba3/BB-
	 	 	2.00	%	 	 	3.00	%	 	 	0.50	%	 	 	0.65	%

Section 3 — Amendment to Negative Covenants

     Section 7.4(2)(c) of the Credit Agreement is deleted and replaced with the following
provision:

     7.4(2)(c) directly or indirectly declare or make any payment, distribution or contribution to
or investment in to Anixter International Inc. (whether in cash or otherwise) except to the extent
that it may do so in compliance with the U.S. Credit Agreement, as amended by any Scotia Approved
Amendment;

Second Amendment Agreement

 

 

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Section 4 — Conditions Precedent to Effectiveness of this Second Amendment Agreement

     This Second Amendment Agreement shall become binding on the Lenders only upon satisfaction of
the following conditions precedent:

	 	(a)	 	execution and delivery of this Second Amendment Agreement (and all other Loan
Documents contemplated by this First Amendment Agreement) by each of the Borrower and
the Guarantors;
	 
	 	(b)	 	execution and delivery of this Second Amendment Agreement by the Lenders (and
all other Loan Documents contemplated by this Second Amendment Agreement, to the extent
applicable) in accordance with Section 9.2 of the Existing Credit Agreement;
	 
	 	(c)	 	no Event of Default or Pending Event of Default having occurred and being
continuing as at the date of satisfaction of all of the foregoing conditions precedent;
and
	 
	 	(d)	 	the Agent having received such corporate resolutions, incumbency and other
certificates of each of the Borrower and the Guarantors as the Agent may reasonably
request in connection with this Second Amendment Agreement and the transactions
contemplated hereby.

Section 5 — Representations and Warranties of the Obligors

     Each of the Obligors represents and warrants to the Agent and Lenders as follows:

	 	(a)	 	the execution, delivery and performance by it of this Second Amendment
Agreement (i) have been duly authorized by all necessary corporate action on its part,
and (ii) do not and will not violate its Constating Documents, any Applicable Law, any
Permit or any Contract to which it is a party;
	 
	 	(b)	 	this Second Amendment Agreement constitutes a legal, valid and binding
obligation of each of the Obligors enforceable against it in accordance with its terms,
subject to the availability of equitable remedies and the effect of bankruptcy,
insolvency and similar laws affecting the rights of creditors generally;
	 
	 	(c)	 	the representations and warranties made by it in the Credit Agreement, other
than those expressly stated to be made as of a specific date, are true and correct as
of the date hereof with the same effect as if such representations and warranties had
been made on and as of the date hereof; and
	 
	 	(d)	 	after giving effect to this Second Amendment Agreement, no Event of Default or
Pending Event of Default has occurred which is continuing on the date hereof or will
occur as a result of entering into this Second Amendment Agreement or the observance or
performance of its obligations hereunder.

Second Amendment Agreement

 

 

 - 4 -

Section 6 — Loan Document

     Each of the Obligors acknowledges that this Second Amendment Agreement is a Loan Document and
that all of its representations and warranties concerning Loan Documents that are contained in the
Existing Credit Agreement apply to this Second Amendment Agreement and are deemed to be repeated on
its execution of this Second Amendment Agreement as if set out in full in this Second Amendment
Agreement.

Section 7 — Continuing Effect of Existing Credit Agreement

     Except as amended by this Second Amendment Agreement, the Existing Credit Agreement shall
remain in full force and effect, without amendment, and is hereby ratified and confirmed. Without
in any way limiting the terms of the Existing Credit Agreement or any other Loan Document, each
Obligor confirms that the Security made or granted by it pursuant to the Existing Credit Agreement
remains in full force and effect notwithstanding the amendments to the Existing Credit Agreement
contained herein and that such Security shall continue to secure and support all of the debts,
liabilities and obligations described in Section 3.2 of the Existing Credit Agreement, including
but not limited to those debts, liabilities and obligations arising as a result of this Second
Amendment Agreement. In addition, all of the Loan Documents shall continue in full force and
effect in accordance with their respective terms and are hereby ratified and confirmed in all
respects.

Section 8 — Further Assurances

     The Borrower shall promptly do, make, execute or deliver, or cause to be done, made, executed
or delivered, all such further acts, documents and things as the Agent may require from time to
time for the purposes of giving effect to this Second Amendment Agreement and shall use reasonable
efforts and take all such steps as may be within its power to implement, to the full extent, the
provisions of this Second Amendment Agreement.

Section 9 — Counterparts and Facsimile

     This Second Amendment Agreement may be executed in any number of counterparts, each of which
when executed and delivered shall be deemed to be an original, and such counterparts together shall
constitute one and the same agreement. For the purposes of this Section, the delivery of a
facsimile copy of an executed counterpart of this Second Amendment Agreement shall be deemed to be
valid execution and delivery thereof.

Section 10 — Governing Law

     The parties agree that this Second Amendment Agreement shall be conclusively deemed to be a
contract made under, and shall for all purposes be governed by and construed in accordance with,
the laws of the Province of Ontario and the laws of Canada applicable in the Province of Ontario.

Second Amendment Agreement

 

 

  - 5 -

Section 11 — Interpretation

     Capitalized terms used herein, unless otherwise defined or indicated herein, have the
respective meanings defined in the Existing Credit Agreement. This Second Amendment Agreement and
the Existing Credit Agreement shall be read together and have effect so far as practicable as
though the provisions thereof and the relevant provisions hereof are contained in one document.
Without limitation of the foregoing, the principles of construction and interpretation set forth in
Sections 1.2, 1.3 and 1.4 of the Existing Credit Agreement apply to this Second Amendment
Agreement.

Section 12 — Effective Date

     This Second Amendment Agreement may be referred to as being dated as of July 31, 2009,
notwithstanding the actual date of execution by the parties hereto as set forth on their respective
signing pages.

[EXECUTION PAGES FOLLOW]

Second Amendment Agreement

 

 

- S1 - 

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as Agent

 	 
	 	By:  	/s/ Ning Cai
 	 
	 	 	Name:  	Ning Cai 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

 

- S2 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER CANADA INC.

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	Authorized Signatory 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S3 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER INC.

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	V.P. - Treasurer 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S4 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER INTERNATIONAL INC.

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	V.P. - Treasurer 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S5 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER-REAL ESTATE, INC.

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	V.P. - Treasurer 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S6 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER INFORMATION SYSTEMS CORPORATION

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	V.P. - Treasurer 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S7 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER FINANCIAL INC.

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	V.P. - Treasurer 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S8 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	ANIXTER PROCUREMENT CORPORATION

 	 
	 	By:  	/s/ Rod Shoemaker
 	 
	 	 	Name:  	Rod Shoemaker 	 
	 	 	Title:  	V.P. - Treasurer 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreement

 

- S9 -

     IN WITNESS WHEREOF, the parties have duly executed this Second Amendment Agreement as of July
31, 2009.

	 	 	 	 	 
	 	THE BANK OF NOVA SCOTIA, as Lender

 	 
	 	By:  	/s/ Ning Cai
 	 
	 	 	Name:  	Ning Cai 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name 	 
	 	 	Title:  	 	 
	 

[signature page for Second Amendment Agreement to Credit Agreement relating to Anixter Canada Inc.
et al.]

Second Amendment Agreementexv10w1

Exhibit 10.1

HEALTHSPRING, INC.

SEVERANCE AND NONCOMPETITION AGREEMENT

     THIS SEVERANCE AND NONCOMPETITION AGREEMENT (the “Agreement”), dated as of July 30, 2009, is
by and between HealthSpring, Inc., a Delaware corporation (the “Company”), and Karey L.
Witty (“Executive”).

     WHEREAS, Executive has accepted the Company’s offer to serve as Executive Vice President and
Chief Financial Officer of the Company and, as a condition of such employment, the Company and
Executive each have agreed to execute this Agreement to provide for certain rights and obligations
as set forth herein.

     NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Severance Benefits. If Executive’s employment is terminated by the Company
without Cause (as defined below) or upon Executive’s resignation with Good Reason (as defined
below), Executive shall be entitled to (i) continue to receive his base salary as in effect
immediately prior to such termination, payable in regular installments in accordance with the
Company’s normal payroll policies then in effect, and (ii) continue to be eligible to participate
in employee benefit programs for senior executive employees (other than bonus and incentive
compensation plans), at the Company’s cost, to the extent permitted under the terms of such
programs and under applicable law, as special severance payments from the date of termination for a
period of eighteen months thereafter (the “Severance Period”), if and only if Executive
has executed and delivered to the Company the General Release substantially in form and substance
as set forth in Exhibit A attached hereto and the General Release has become effective, and
only so long as Executive has not revoked or breached the provisions of the General Release or
breached the provisions of Section 2 or 3 hereof and does not apply for unemployment compensation
chargeable to the Company or any Subsidiary during the Severance Period. Executive shall not be
entitled to any other salary, compensation, or benefits after termination of his employment, except
as specifically provided for in the Company’s employee benefit plans or as otherwise expressly
required by applicable law. Unless Executive is terminated by the Company or its successor without
Cause in connection with or within twelve months following a Change of Control (as defined below),
the amounts payable pursuant to this Section 1 shall be reduced by the amount of any
compensation Executive receives with respect to any other employment during the Severance Period;
provided that Executive shall have no duty or obligation to seek other employment during the
Severance Period or otherwise mitigate damages hereunder. Upon request from time to time, Executive
shall furnish the Company with a true and complete certificate specifying any such compensation
earned or received by him from any Person other than the Company during the Severance Period. All
payments required to be made, or other benefits required to be provided, by the Company hereunder
to Executive or Executive’s dependents, beneficiaries, or estate will be subject to the withholding
of such amounts relating to tax and other payroll deductions as may be required by law.

     2. Noncompete/Nonsolicitation.

     2.1 In further consideration of the benefits to Executive hereunder and as a condition
of his continued employment with the Company, Executive acknowledges that during the course
of his employment with the Company and its Subsidiaries (as defined below), he will become
familiar with the Company’s and its Subsidiaries’ trade secrets and with other Confidential

 

 

Information (as defined below) concerning the Company and its Subsidiaries and that his
services have been and shall continue to be of special, unique, and extraordinary value to
the Company and its Subsidiaries. Executive agrees that, during his employment with the
Company and for eighteen months thereafter (the “Noncompete Period”), he shall not
directly or indirectly own any interest in, manage, control, participate in, consult with,
render services for, be employed in an executive, managerial or administrative capacity by,
or in any manner engage in any business within the United States that is engaging in the
businesses of the Company or its Subsidiaries, as such businesses exist at any time during
his employment with the Company or, as of the date of termination of such employment, are
contemplated to exist during the twelve-month period following the date of termination of
employment (the “Restricted Business”). Nothing herein shall prohibit Executive
from (i) being a passive owner of not more than 2% of the outstanding stock of any class of
a corporation that is publicly traded, so long as Executive has no active participation in
the business of such corporation; or (ii) becoming employed, engaged, associated or
otherwise participating with a separately managed division or Subsidiary of a competitive
business that does not engage in the Restricted Business (provided that Executive’s services
are provided only to such division or Subsidiary); or (iii) accepting employment with any
federal or state government or governmental subdivision or agency.

     2.2 During the Noncompete Period, Executive shall not directly or indirectly through
another Person (i) induce or attempt to induce any employee of the Company or any Subsidiary
to leave the employ of the Company or such Subsidiary, or in any way interfere with the
relationship between the Company or any Subsidiary and any employee thereof; (ii) hire any
Person who was an employee of the Company or any Subsidiary at any time during the
twelve-month period immediately prior to the termination of his employment with the Company;
or (iii) induce or attempt to induce any member, provider, payor or other business relation
of the Company or any Subsidiary to cease or materially reduce doing business with the
Company or such Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any Subsidiary
(including, without limitation, making any negative or disparaging statements or
communications regarding the Company or its Subsidiaries). Notwithstanding the foregoing,
nothing in this Agreement shall prohibit Executive from employing an individual (i) with the
consent of the Company or (ii) who responded to general solicitations in publications or on
websites, or through the use of search firms, so long as such general solicitations or
search firm activities are not targeted specifically at an employee of the Company or any of
its Subsidiaries. In addition, nothing in this Agreement will prohibit the making of any
truthful statements made by any Person in response to a lawful subpoena or legal proceeding
or to enforce such Person’s rights under this Agreement, or any other agreement between
Executive, the Company, and its Subsidiaries.

     3. Confidentiality; Trade Secrets.

     3.1 Executive acknowledges that the Company and its Subsidiaries continually develop
Confidential Information, that Executive may develop Confidential Information for the
Company or its Subsidiaries, and that Executive may learn of Confidential Information during
the course of his employment. Executive agrees that all Confidential Information that
Executive creates or to which Executive has access as a result of Executive’s employment,
whether before or after the date of this Agreement, is and shall remain the sole and
exclusive property of the Company and that Executive will comply with the policies and
procedures of the Company and its Subsidiaries for protecting Confidential Information.
Executive further agrees that, except as required for the proper performance of Executive’s
duties for the Company or as required by applicable law (and then only to the extent
required), Executive will not, directly or indirectly, use for Executive’s own benefit or
gain, or assist others in the application of or disclose any Confidential Information.
Executive understands and agrees that these restrictions will continue to apply after
Executive’s employment terminates, regardless of the reason for termination and

2

 

regardless whether Executive is receiving or is entitled to receive any payments or
other benefits under this Agreement.

     3.2 Executive acknowledges that all discoveries, concepts, ideas, inventions,
innovations, improvements, developments, methods, designs, analyses, drawings, reports,
patent applications, copyrightable work and mask work (whether or not including any
Confidential Information) and all registrations or applications related thereto, all other
proprietary information and all similar or related information (whether or not patentable)
that relate to the Company’s or any of its Subsidiaries’ actual or anticipated business,
research and development or existing or future products or services and that are conceived,
developed or made by Executive (whether alone or jointly with others) while employed by the
Company and its Subsidiaries, whether before or after the date of this Agreement (“Work
Product”), belong to the Company or such Subsidiary. Executive shall promptly disclose
all patentable inventions and other material Work Product to the Board of Directors and, at
the Company’s expense, perform all actions reasonably requested by the Board of Directors
(whether during or after his employment with the Company) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of attorney and
other instruments). Executive acknowledges that all Work Product shall be deemed to
constitute “works made for hire” under the U.S. Copyright Act of 1976, as amended. In
accordance with Title 19, Section 805 of the Delaware Code, Executive is hereby advised that
this Section 3.2 regarding the Company’s and its Subsidiaries’ ownership of Work
Product does not apply to any invention for which no equipment, supplies, facilities or
trade secret information of the Company or any Subsidiary was used and which was developed
entirely on Executive’s own time, unless (i) the invention relates to the business of the
Company or any Subsidiary or to the Company’s or any Subsidiaries’ actual or demonstrably
anticipated research or development, or (ii) the invention results from any work performed
by Executive for the Company or any Subsidiary.

     4. Enforceability and Remedies.

     4.1 Executive agrees that the restrictions on, and other provisions relating to,
Executive’s activities contained in this Agreement are fully reasonable and necessary to
protect the goodwill, Confidential Information and other legitimate interests of the
Company. Executive also acknowledges and agrees that, were Executive to breach the
provisions of this Agreement, the harm to the Company would be irreparable. Executive
therefore agrees that in the event of such a breach or threatened breach the Company shall,
in addition to any other remedies available to it, have the right to obtain preliminary and
permanent injunctive relief against any such breach without having to post bond. Executive
further agrees that, in addition to any other relief awarded to the Company as a result of
Executive’s breach of any of the provisions of this Agreement, the Company shall be entitled
to recover all payments made to Executive or on Executive’s behalf hereunder.

     4.2 Executive hereby agrees that in the event any provision of this Agreement shall be
determined by any court of competent jurisdiction to be unenforceable by reason of its being
extended over too long a time, too large a geographic area, or too great a range of
activities, such provision shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.

     5. Definitions. Words or phrases which are initially capitalized or within quotation
marks shall have the meanings provided in this Section 5 and as provided elsewhere herein.
For purposes of this Agreement, the following definitions apply:

     “Act” shall mean the Securities Exchange Act of 1934, as amended.

3

 

     “Cause” shall mean, with respect to Executive, one or more of the following: (i) the
conviction of a felony or other crime involving moral turpitude or the commission of any other act
or omission involving material dishonesty or fraud with respect to the Company or any of its
Subsidiaries; (ii) reporting to work under the influence of illegal drugs, the use of illegal drugs
(whether or not at the workplace) or other repeated conduct causing the Company or any of its
Subsidiaries substantial public disgrace or disrepute or substantial economic harm, which is not
cured within 20 days following written notice thereof to the Executive; (iii) material and repeated
failure to perform his duties as reasonably directed by the Board of Directors or the Company’s
Chief Executive Officer, which is not cured within 20 days following written notice thereof to the
Executive; (iv) breach of fiduciary duty or engaging in gross negligence or willful misconduct with
respect to the Company or any of its Subsidiaries; or (v) any other material breach of this
Agreement which is not cured within 20 days after written notice thereof to Executive.

     “Change of Control” shall be deemed to take place if hereafter (i) any Person becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Act) of securities of the Company
representing more than 50% of the combined voting power of the Company’s then-outstanding
securities; or (ii) the Company is a party to a merger, consolidation, sale of assets or other
reorganization, or a proxy contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter. Notwithstanding the foregoing provisions of this paragraph, a “Change of
Control” will not be deemed to have occurred solely because of the occurrence of a leveraged buyout
or recapitalization of the Company in which the Executive participates as an equity investor.

     “Confidential Information” shall mean any and all information of the Company and its
Subsidiaries that is not generally known by others with whom they compete or do business, or with
whom they plan to compete or do business, and any and all information, which, if disclosed by the
Company or any of its Subsidiaries, would assist in competition against any of them. Confidential
Information includes without limitation such information relating to the financial performance and
strategic plans of the Company and its Subsidiaries. Confidential Information also includes any
and all information that the Company or any of its Subsidiaries has received from others with any
understanding that it would not be disclosed.

     “Good Reason” shall mean if Executive resigns from his employment with the Company and
its Subsidiaries as a result of one or more of the following reasons: (i) the Company reduces the
amount of his base salary; (ii) the Company materially reduces his responsibilities, which is not
cured within 20 days after written notice thereof to the Company; or (iii) the relocation of the
Company’s principal executive offices and/or the location at which Executive provides services
pursuant to this Agreement to a location outside the metropolitan Nashville, Tennessee area;
provided that written notice of Executive’s resignation for Good Reason must be delivered to the
Company within 45 days after the occurrence of any such event in order for Executive’s resignation
with Good Reason to be effective hereunder.

     “Person” means an individual, a corporation, an association, a partnership, an estate,
a trust or other entity or organization (including a “group” as defined in Section 13(d)(3) or
14(d)(2) of the Act), other than the Company or any of its Subsidiaries or affiliates.

     “Subsidiary” shall mean any corporation, partnership, limited liability company, or
other business entity of which more than 50% of the total voting power of shares of stock or other
ownership interests is owned by the Company.

     6. Assignment. Neither the Company nor Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the prior written
consent of the other; provided, however, that the Company may assign its rights and obligations
under this

4

 

Agreement without Executive’s consent in the event that the Company shall hereafter effect a Change
of Control. This Agreement shall inure to the benefit of and be binding upon the Company, its
successors (including without limitation any transferee of all or substantially all of its assets),
and permitted assigns and upon Executive, Executive’s executors, administrators, heirs, and
permitted assigns.

     In the event of any Change of Control as described above, references to the Company in this
Agreement shall, unless the context suggests otherwise, be deemed to include the entity resulting
from such Change of Control of the Company.

     7. Notices. Any and all notices, requests, demands, acceptances, appointments and
other communications provided for by this Agreement shall be in writing (including electronic mail
or similar electronic transmission) and shall be effective when actually delivered in person or, if
mailed, five days after having been deposited in the United States mail, postage prepaid,
registered or certified and addressed to Executive at Executive’s last known address on the books
of the Company or, in the case of the Company, addressed to its principal place of business,
attention of Chief Executive Officer, or to such other address as either party may specify by
notice to the other.

     8. Release. As a condition to receiving the payments and benefits provided for in
Section 1 of this Agreement, Executive agrees to sign, at the time of Executive’s
termination of employment, a release in substantially the form attached hereto as Exhibit
A.

     9. Section 409A. It is intended that (1) each installment of the payments provided
under this Agreement is a separate “payment” for purposes of Section 409A of the United States
Internal Revenue Code of 1986 (the “Code”), and (2) that the payments satisfy, to the greatest
extent possible, the exemptions from the application of Code Section 409A provided under Treasury
Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding anything
to the contrary in this Agreement, if the Company determines (i) that on the date Executive’s
employment with the Company terminates or at such other time that the Company determines to be
relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation
1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to Executive pursuant to
this Agreement are or may become subject to the additional tax under Code Section 409A(a)(1)(B) or
any other taxes or penalties imposed under Code Section 409A (“Section 409A Taxes”) if provided at
the time otherwise required under this Agreement, then such payments shall be delayed until the
date that is six months after the date of Executive’s “separation from service” (as such term is
defined under Treasury Regulation 1.409A-1(h)) with the Company, or such shorter period that, as
determined by the Company, is sufficient to avoid the imposition of Section 409A Taxes. Any
payments delayed pursuant to this Section 9 shall be made in a lump sum on the first day of
the seventh month following Executive’s “separation from service” (as such term is defined under
Treasury Regulation 1.409A-1(h)), or such earlier date that, as determined by the Company, is
sufficient to avoid the imposition of any Section 490A Taxes.

     10. Miscellaneous. The headings and captions in this Agreement are for convenience
only and in no way define or describe the scope or content of any provision of this Agreement.
Nothing herein shall be deemed to create an employment contract. This Agreement may not be
modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in a
writing signed by Executive and a duly authorized officer of the Company. The validity,
interpretation, construction, and performance of this Agreement shall be governed by the laws of
the State of Delaware, without giving effect to choice of law or conflict of law rules or
provisions thereof. The parties agree that, in the event it becomes necessary to seek judicial
remedies for the breach or threatened breach of this Agreement, the prevailing party will be
entitled, in addition to all other remedies, to recover from the non-prevailing party reasonable
attorneys’ fees and costs upon the entry of a final nonappealable judgment. Each party shall
perform such further acts and execute and deliver such further documents as may be reasonably
necessary to carry out the provisions of this Agreement. By accepting this agreement, Executive
hereby agrees and

5

 

acknowledges that the Company makes no representations with respect to the application of Code
Section 409A to any tax, economic, or legal consequences of any payments payable to Executive
hereunder (including, without limitation, payments pursuant to Section 1 above) and, by the
acceptance of this Agreement, Executive agree to accept the potential application of Code Section
409A to the tax and legal consequences of payments payable to Executive hereunder (including,
without limitation, payments pursuant to Section 1 above). The parties agree to cooperate
in good faith to amend such documents and to take such actions as may be necessary or appropriate
to comply with Code Section 409A.

     This Agreement may be executed in two or more counterparts, each of which shall be an original
and all of which together constitute one and the same instrument. If any term or other provision
of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the fullest extent possible.

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

	 	 	 	 	 
	 	HEALTHSPRING, INC.

 	 
	 	By:  	/s/ J. Gentry Barden
 	 
	 	 	J. Gentry Barden 	 
	 
	 	Its: Senior Vice President 	 
	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	/s/ Karey L. Witty
 	 
	 	Karey L. Witty 	 
	 	 	 
	 

6

 

Exhibit A

GENERAL RELEASE

         I,                     , in consideration of and subject to the performance by HealthSpring, Inc., a
Delaware corporation (together with each of its Subsidiaries, the “Company”), of its
obligations under the Severance and NonCompetition Agreement, dated as of the date as of
                     (the “Agreement”), do hereby release and forever discharge as of the date
hereof the Company and its affiliates and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company and its affiliates and the
Company’s direct or indirect owners (collectively, the “Released Parties”) to the extent
provided below.

	1.	 	I understand that any payments or benefits paid or granted to me under Section 1 of the
Agreement represent, in part, consideration for signing this General Release and are not
salary, wages or benefits to which I was already entitled. I understand and agree that I will
not receive the payments and benefits specified in Section 1 of the Agreement unless I execute
this General Release and do not revoke this General Release within the time period permitted
hereafter or breach this General Release. Such payments and benefits will not be considered
compensation for purposes of any employee benefit plan, program, policy or arrangement
maintained or hereafter established by the Company or its affiliates. I also acknowledge and
represent that I have received all payments and benefits that I am entitled to receive (as of
the date hereof) by virtue of any employment by the Company.
	 
	2.	 	Except as provided in paragraph 4 below, I knowingly and voluntarily (for myself, my heirs,
executors, administrators and assigns) release and forever discharge the Company and the other
Released Parties from any and all claims, suits, controversies, actions, causes of action,
cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages,
punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or
liabilities of any nature whatsoever in law and in equity, both past and present (through the
date this General Release becomes effective and enforceable) and whether known or unknown,
suspected, or claimed against the Company or any of the Released Parties which I, my spouse,
or any of my heirs, executors, administrators or assigns, may have, which arise out of or are
connected with my employment with, or my separation or termination from, the Company
(including, but not limited to, any allegation, claim or violation, arising under: Title VII
of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit
Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of
1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and
Notification Act; the Employee Retirement Income Security Act of 1974; any applicable
Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts;
or under any other federal, state or local civil or human rights law, or under any other
local, state, or federal law, regulation or ordinance; or under any public policy, contract or
tort, or under common law; or arising under any policies, practices or procedures of the
Company; or any claim for wrongful discharge, breach of contract, infliction of emotional
distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’
fees incurred in these matters) (all of the foregoing collectively referred to herein as the
“Claims”).
	 
	3.	 	I represent that I have made no assignment or transfer of any right, claim, demand, cause of
action, or other matter covered by paragraph 2 above.
	 
	4.	 	I agree that this General Release does not waive or release any rights or claims that I may
have under the Age Discrimination in Employment Act of 1967 which arise after the date I
execute this General Release. I acknowledge and agree that my separation from employment with
the

A-1 

 

	5.	 	Company in compliance with the terms of the Agreement shall not serve as the basis for
any claim or action (including, without limitation, any claim under the Age Discrimination
in Employment Act of 1967).
	 
	6.	 	In signing this General Release, I acknowledge and intend that it shall be effective as a bar
to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that
this General Release shall be given full force and effect according to each and all of its
express terms and provisions, including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the effectiveness of a general
release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating
to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver
is an essential and material term of this General Release and that without such waiver the
Company would not have agreed to the terms of the Agreement. I further agree that in the
event I should bring a Claim seeking damages against the Company, or in the event I should
seek to recover against the Company in any Claim brought by a governmental agency on my
behalf, this General Release shall serve as a complete defense to such Claims. I further agree
that I am not aware of any pending charge or complaint of the type described in paragraph 2 as
of the execution of this General Release.
	 
	7.	 	I agree that neither this General Release, nor the furnishing of the consideration for this
General Release, shall be deemed or construed at any time to be an admission by the Company,
any Released Party or myself of any improper or unlawful conduct.
	 
	8.	 	I agree that I will forfeit all amounts payable by the Company pursuant to the Agreement if I
challenge the validity of this General Release. I also agree that if I violate this General
Release by suing the Company or the other Released Parties, I will pay all costs and expenses
of defending against the suit incurred by the Released Parties, including reasonable
attorneys’ fees, and return all payments received by me pursuant to the Agreement.
	 
	9.	 	I agree that this General Release is confidential and agree not to disclose any information
regarding the terms of this General Release, except to my immediate family and any tax, legal
or other counsel I have consulted regarding the meaning or effect hereof or as required by
law, and I will instruct each of the foregoing not to disclose the same to anyone.
Notwithstanding anything herein to the contrary, each of the parties (and each affiliate and
person acting on behalf of any such party) agree that each party (and each employee,
representative, and other agent of such party) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of this transaction contemplated
in the Agreement and all materials of any kind (including opinions or other tax analyses) that
are provided to such party or such person relating to such tax treatment and tax structure,
except to the extent necessary to comply with any applicable federal or state securities laws.
This authorization is not intended to permit disclosure of any other information including
(without limitation) (i) any portion of any materials to the extent not related to the tax
treatment or tax structure of this transaction, (ii) the identities of participants or
potential participants in the Agreement, (iii) any financial information (except to the extent
such information is related to the tax treatment or tax structure of this transaction), or
(iv) any other term or detail not relevant to the tax treatment or the tax structure of this
transaction.
	 
	10.	 	Any non-disclosure provision in this General Release does not prohibit or restrict me
(or my attorney) from responding to any inquiry about this General Release or its underlying
facts and circumstances by the Securities and Exchange Commission (SEC), the Financial
Industry Regulatory Authority (FINRA), any other self-regulatory organization or
governmental entity.

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	11.	 	I agree to reasonably cooperate with the Company in any internal investigation, any
administrative, regulatory, or judicial proceeding or any dispute with a third party.
	 
	12.	 	I agree not to disparage the Company, its past and present investors, officers, directors or
employees or its affiliates and to keep all confidential and proprietary information about the
past or present business affairs of the Company and its affiliates confidential in accordance
with the terms of the Agreement unless a prior written release from the Company is obtained.
I further agree that as of the date hereof, I have returned to the Company any and all
property, tangible or intangible, relating to its business, which I possessed or had control
over at any time (including, but not limited to, company-provided credit cards, building or
office access cards, keys, computer equipment, manuals, files, documents, records, software,
customer data base and other data) and that I shall not retain any copies, compilations,
extracts, excerpts, summaries or other notes of any such manuals, files, documents, records,
software, customer data base or other data.
	 
	13.	 	Notwithstanding anything in this General Release to the contrary, this General Release shall
not relinquish, diminish, or in any way affect (i) any rights or claims arising out of any
breach by the Company or by any Released Party of the Agreement after the date hereof, (ii)
any rights or obligations under applicable law which cannot be waived or released pursuant to
an agreement, (iii) any rights to payments or benefits under Section 1 of the Agreement, (iv)
my rights of indemnification and directors and officers insurance coverage to which I may be
entitled solely with regards to my service as an officer or director of the Company; (v) my
rights with regard to accrued benefits under any employee benefit plan, policy or arrangement
maintained by the Company or under COBRA; and (vi) my rights as a stockholder or other
equityholder of the Company and/or its affiliates.
	 
	14.	 	Whenever possible, each provision of this General Release shall be interpreted in, such
manner as to be effective and valid under applicable law, but if any provision of this General
Release is held to be invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or any other jurisdiction, but this General Release shall be
reformed, construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

	(a)	 	I HAVE READ IT CAREFULLY;
	 
	(b)	 	I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT
NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED;
	 
	(c)	 	I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
	 
	(d)	 	I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR,
AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
	 
	(e)	 	I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS
FINAL FORM ON [                          ,           ] TO CONSIDER IT AND THE CHANGES MADE SINCE THE
[                          ,           ]

A-3 

 

	(f)	 	VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD;

	(g)	 	THE CHANGES TO THE AGREEMENT SINCE [                          ,           ] EITHER ARE NOT MATERIAL OR
WERE MADE AT MY REQUEST.
	 
	(h)	 	I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT
THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED;
	 
	(i)	 	I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY
COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND
	 
	(j)	 	I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR
MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE
COMPANY AND BY ME.

	 	 	 	 	 	 	 	 	 
	DATE:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 

A-4

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