exv10w1






EXHIBIT 10.1




STOCK PURCHASE AGREEMENT




          THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of May 4, 2005, by and
among Capella Holdings, Inc., a Delaware corporation (the “Company”), GTCR Fund VIII, L.P.,
a Delaware limited partnership (“Fund VIII”), GTCR Fund VIII/B, L.P., a Delaware limited
partnership (“Fund VII/B”), GTCR Co-Invest II, L.P., a Delaware limited partnership
(“GTCR Co-Invest”), and any investment fund managed by GTCR Golder Rauner L.L.C., a
Delaware limited liability company, or GTCR Golder Rauner II, L.L.C., a Delaware limited liability
company (“GTCR”) or any of its Affiliates, that at any time executes a counterpart of this
Agreement or otherwise agrees to be bound by this Agreement shall be referred to herein as a
“Purchaser” and, collectively as the “Purchasers.” Except as otherwise indicated
herein, capitalized terms used herein are defined in Section 6 hereof.




          The parties hereto agree as follows:




          Section 1. Authorization and Closing.




          1A. Authorization of the Preferred Stock and Common Stock. The Company shall
authorize the issuance and sale to the Purchasers pursuant to this Agreement of up to 196,000.000
shares of its Cumulative Redeemable Preferred Stock, par value $0.01 per share, (the “Preferred
Stock”), and up to 50,000,000 shares of its Common Stock, par value $0.01 per share (the
“Common Stock”), each having the rights and preferences set forth in the Certificate of
Incorporation.




          1B. Purchase and Sale of the Preferred Stock and Common Stock.




          (a) Initial Closing. At the Initial Closing (as defined below), the Company shall
sell to the Purchasers and, subject to the terms and conditions set forth herein, the Purchasers
shall purchase from the Company, an aggregate of 25,000,000 shares of Common Stock at a price of
$0.08 per share. Each Purchaser shall purchase the percentage of such Common Stock set forth next
to such Purchaser’s name on the Schedule of Purchasers attached hereto by payment of the
aggregate purchase price thereof by wire transfer of immediately available funds to such account as
is designated by the Company. The initial closing of the purchase and sale of the Common Stock
(the “Initial Closing”) shall take place at the offices of Kirkland & Ellis LLP, 200 East
Randolph Drive, Chicago, Illinois 60601 at 10:00 a.m. on the date hereof.




          (b) The Company has been incorporated for the purpose of acquiring and operating acute-care
hospitals. In addition to the $2,000,000.00 invested by the Purchasers in the aggregate on the
Initial Closing Date pursuant to Section 1B(a) above, the Purchasers intend to provide up
to $198,000,000.00 in equity financing to the Company as the equity portion of the debt and equity
financing necessary to fund such business(es), in each case as approved by the Board of Directors
of the Company (the “Board”) and the Purchasers (an “Approved Use”);
provided, that no more than $2,500,000 of equity financing shall be available to fund
start-up costs of the Company prior to its first acquisition without the consent of the Purchasers
in their






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sole discretion. The Purchasers’ obligation to purchase any Preferred Stock and Common Stock
pursuant to this Section 1B will be conditioned on the Company’s not being in default under
any of its material agreements, adequate debt financing being available to fund any proposed
acquisition or other Approved Use on terms satisfactory to the Purchasers, and the Company’s
operations and the acquisition or other Approved Use being satisfactory to the Purchasers. In
order to implement the foregoing, the Purchasers may purchase from time to time after the Initial
Closing, upon the written request of the Board in connection with an Approved Use, first, up to an
aggregate of 25,000,000 shares of Common Stock at a price of $0.08 per share and, thereafter, up to
an aggregate of 196,000.000 shares of Preferred Stock at a price of $1,000.00 per share (as
adjusted from time to time as a result of stock dividends, stock splits, recapitalizations and
similar events) (each such purchase, a “Subsequent Closing”). Each Subsequent Closing
shall take place at the offices of Kirkland & Ellis LLP, 200 East Randolph Drive, Chicago, Illinois
60601 at 10:00 a.m. on such date as may be mutually agreeable to the Company and the Purchasers.
At the time of any Subsequent Closing, the Purchasers shall be entitled to receive, and the Company
shall be obligated to deliver, satisfactory representations and warranties and all other
information and documentation as the Purchasers may reasonably request.




          Section 2 Conditions of the Purchasers’ Obligation at the Initial Closing and each
Subsequent Closing. The obligation of each Purchaser to purchase and pay for the Investor
Securities to be purchased by it at the Initial Closing is subject to the satisfaction as of the
Initial Closing of the following conditions (other than Section 2M) and the obligation of
each Purchaser to purchase and pay for the Common Stock and the Preferred Stock to be purchased by
it at each Subsequent Closing is subject to the satisfaction as of such Subsequent Closing of the
conditions set forth in Section 2M:




          2A. Representations and Warranties; Covenants. The representations and warranties
contained in Section 5 hereof shall be true and correct at and as of the Initial Closing as
though then made, except to the extent of changes caused by the transactions expressly contemplated
herein, and the Company shall have performed in all material respects all of the covenants required
to be performed by it hereunder prior to the Initial Closing.




          2B. Certificate of Incorporation. The Company’s Certificate of Incorporation (the
“Certificate of Incorporation”) shall include the provisions set forth in Exhibit A
attached hereto, shall be in full force and effect under the laws of Delaware as of the Initial
Closing and shall not have been amended or modified.




          2C. Senior Management Agreements. The Company and one or more of its Subsidiaries
shall have entered into Senior Management Agreements with each of Daniel S. Slipkovich, James
Thomas Anderson, Samuel H. Moody and David Andrew Slusser (collectively, the “Executives”)
in the forms attached as Exhibit B hereto (collectively, the “Senior Management
Agreements”). The Senior Management Agreements shall not have been amended or modified and
shall be in full force and effect as of the Initial Closing, and each of the Executives shall have
purchased the capital stock of the Company proposed to be purchased by him at the Initial Closing
thereunder.




          2D. Stockholders Agreement. The Company, the Purchasers and the Executives shall have
entered into a stockholders agreement in form and substance substantially






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similar to Exhibit C attached hereto (the “Stockholders Agreement”), and the
Stockholders Agreement shall be in full force and effect as of the Initial Closing.




          2E. Registration Agreement. The Company, the Purchasers and the Executives shall have
entered into a registration agreement in form and substance substantially similar to Exhibit
D attached hereto (the “Registration Agreement”), and the Registration Agreement shall
be in full force and effect as of the Initial Closing.




          2F. Professional Services Agreement. The Company and GTCR shall have entered into a
professional services agreement in form and substance substantially similar to Exhibit E
attached hereto (the “Professional Services Agreement”), and the Professional Services
Agreement shall be in full force and effect as of the Initial Closing.




          2G. Subsidiary Charter. Capella Healthcare, Inc., a Delaware corporation (“CH
Subsidiary”), shall have duly adopted, executed and filed with the Secretary of State of
Delaware a certificate of incorporation in form and substance substantially similar to Exhibit
F attached hereto (the “Subsidiary Charter”), and the Subsidiary Charter shall continue
to be in full force and effect as of the Initial Closing and shall not have been further amended or
modified.




          2H. Subsidiary Bylaws. CH Subsidiary shall have duly adopted bylaws in form and
substance substantially similar to Exhibit G attached hereto (the “Subsidiary
Bylaws”), and the Subsidiary Bylaws shall continue to be in full force and effect as of the
Initial Closing and shall not have been further amended or modified.




          2I. Initial Closing Documents. The Company shall have delivered to the Purchasers all
of the following documents:




          (a) an Officer’s Certificate, dated the date of the Initial Closing, stating that the
conditions specified in Section 1, Sections 2A-H, inclusive, and Sections
2J-L, inclusive, have been fully satisfied;




          (b) certified copies of the resolutions duly adopted by the Board authorizing the execution,
delivery and performance of this Agreement, the Certificate of Incorporation, the Senior Management
Agreements, the Stockholders Agreement, the Registration Agreement, the Professional Services
Agreement, and each of the other agreements contemplated hereby (the “Transaction
Documents”), the issuance and sale of Preferred Stock and Common Stock pursuant to this
Agreement and the consummation of all other transactions contemplated by this Agreement;




          (c) certified copies of the Subsidiary Charter and the Subsidiary Bylaws; and




          (d) certified copies of the Company’s Certificate of Incorporation and the Company’s Bylaws
(the “Bylaws”), as in effect at the Initial Closing.




          2J. Fees and Expenses. The Company shall have reimbursed the Purchasers for their
fees and expenses as provided in Section 7A hereof.







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          2K. Compliance with Applicable Laws. The purchase of Preferred Stock and Common Stock
by the Purchasers hereunder shall not be prohibited by any applicable law or governmental
regulation, shall not subject the Purchaser to any penalty, liability or, in each Purchaser’s sole
judgment, other onerous conditions under or pursuant to any applicable law or governmental
regulation, and shall be permitted by laws and regulations of the jurisdictions to which any
Purchaser is subject.




          2L. Consents and Approvals. The Company shall have received or obtained all
governmental, regulatory and third party consents and approvals necessary for the consummation of
the transactions contemplated by the Initial Closing.




          2M. Conditions to Subsequent Closings. The obligation of each Purchaser to purchase
and pay for the Securities at any Subsequent Closing is subject to the satisfaction as of the
Subsequent Closing of the following conditions:




               (i) Representations and Warranties; Covenants. The representations and warranties
contained in Section 5 hereof shall be true and correct at and as of such Subsequent
Closing as though then made, except to the extent of changes caused by the transactions expressly
contemplated herein or by the other Transaction Documents and except for changes occurring in the
ordinary course of the Company’s and its Subsidiaries’ businesses that have not had and would not
reasonably be expected to have a material adverse effect on the financial condition, operating
results, assets or operations of the Company or any Subsidiary (including the filing of any
material litigation against the Company or any Subsidiary or the existence of any material dispute
with any Person that involves a reasonable likelihood of such litigation being commenced).



               (ii) Consents and Approvals. The Company shall have received or obtained all
governmental, regulatory and third party consents and approvals necessary for the consummation of
the transactions contemplated by such Subsequent Closing.



               (iii) Compliance with Applicable Laws. The purchase of the Preferred Stock and Common
Stock by the Purchasers hereunder shall not be prohibited by any applicable law or governmental
regulation, shall not subject the Purchaser to any penalty, liability or, in each Purchaser’s sole
judgment, other onerous conditions under or pursuant to any applicable law or governmental
regulation, and shall be permitted by laws and regulations of the jurisdictions to which any
Purchaser is subject.



          2N. Waiver. Any condition specified in this Section 2 may be waived only if
such waiver is set forth in a writing executed by the Purchasers.




          Section 3. Covenants.




          3A. Financial Statements and Other Information. The Company shall deliver to each
Purchaser (so long as such Purchaser (together with its Affiliates) holds at least 10% of the
Preferred Stock or Common Stock issued to the Purchasers pursuant to this Agreement) and to each
holder (together with its Affiliates) of at least 10% of the Investor Preferred and to each holder
(together with its Affiliates) of at least 10% of the Investor Common:







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               (i) as soon as available but in any event within 30 days after the end of each monthly
accounting period in each fiscal year, unaudited consolidating and consolidated statements of
income and cash flows of the Company and its Subsidiaries for such monthly period and for the
period from the beginning of the fiscal year to the end of such month, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of the end of such monthly
period, all prepared in accordance with United States generally accepted accounting principles,
consistently applied, subject to the absence of footnote disclosures and to normal year-end
adjustments;



               (ii) as soon as available but in any event within 30 days after the end of each quarterly
accounting period in each fiscal year, unaudited consolidated statements of income and cash flows
of the Company and its Subsidiaries for such quarterly period and for the period from the beginning
of the fiscal year to the end of such quarter, and consolidated balance sheets of the Company and
its Subsidiaries as of the end of such quarterly period, all prepared in accordance with United
States generally accepted accounting principles, consistently applied, subject to the absence of
footnote disclosures and to normal year-end adjustments, together with a management discussion and
analysis of financial conditions and results of operations in a form reasonably satisfactory to the
Purchasers (an “MD&A”);



               (iii) accompanying the financial statements referred to in subsections (i) and (ii)
above, an Officer’s Certificate stating that neither the Company nor any of its Subsidiaries is in
default under any of its material agreements or, if any such default exists, specifying the nature
and period of existence thereof and what actions the Company and its Subsidiaries have taken and
propose to take with respect thereto;



               (iv) within 90 days after the end of each fiscal year, consolidating and consolidated
statements of income and cash flows of the Company and its Subsidiaries for such fiscal year, and
consolidating and consolidated balance sheets of the Company and its Subsidiaries as of the end of
such fiscal year, setting forth in each case comparisons to the annual budget and to the preceding
fiscal year, all prepared in accordance with United States generally accepted accounting
principles, consistently applied, together with an MD&A, and accompanied by (a) with respect to the
consolidated portions of such statements (except with respect to budget data), an opinion
containing no exceptions or qualifications (except for qualifications regarding specified
contingent liabilities) of an independent accounting firm of recognized national standing
acceptable to the Majority Holders, and (b) a copy of such accounting firm’s annual management
letter to the Board;



               (v) promptly upon receipt thereof, any additional reports, management letters or other
detailed information concerning significant aspects of the Company’s operations or financial
affairs given to the Company by its independent accountants (and not otherwise contained in other
materials provided hereunder);



               (vi) at least 30 days prior to the beginning of each fiscal year, an annual budget prepared on
a monthly basis for the Company and its Subsidiaries for such fiscal year (displaying anticipated
statements of income and cash flows), and promptly upon preparation thereof any other significant
budgets prepared by the Company and any revisions of such annual or other budgets, and within 30
days after any monthly period in which there is a material



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adverse deviation from the annual budget, an Officer’s Certificate explaining the deviation
and what actions the Company has taken and proposes to take with respect thereto;




               (vii) promptly (but in any event within 5 business days) after the discovery or receipt of
notice of any default under any material agreement to which the Company or any of its Subsidiaries
is a party or any other event or circumstance affecting the Company or any Subsidiary that is
reasonably likely to have a material adverse effect on the financial condition, operating results,
assets, operations or business prospects of the Company or any Subsidiary (including the filing of
any material litigation against the Company or any Subsidiary or the existence of any material
dispute with any Person that involves a reasonable likelihood of such litigation being commenced),
an Officer’s Certificate specifying the nature and period of existence thereof and what actions the
Company and its Subsidiaries have taken and propose to take with respect thereto;



               (viii) to the extent not already provided to such holders, promptly (but in any event within 5
business days) days after transmission thereof (to the extent not already provided to such
holders), copies of all financial statements, proxy statements, reports and any other general
written communications that the Company sends to its equityholders and copies of all registration
statements and all regular, special or periodic reports that it files, or any of its officers or
directors file with respect to the Company, with the Securities and Exchange Commission or with any
securities exchange on which any of the Company’s securities are then listed, and copies of all
press releases and other statements made available generally by the Company to the public
concerning material developments in the Company’s and its Subsidiaries’ businesses; and



               (ix) with reasonable promptness, such other information and financial data concerning the
Company and its Subsidiaries as any Person entitled to receive information under this Section
3A may reasonably request.


Each of the financial statements referred to in subsections (i), (ii) and (iv) shall be
true and correct in all material respects as of the dates and for the periods stated therein,
subject in the case of the unaudited financial statements to changes resulting from normal year-end
audit adjustments (none of which would, alone or in the aggregate, be materially adverse to the
financial condition, operating results, assets, operations or business prospects of the Company and
its Subsidiaries taken as a whole). In connection with the Company’s annual audit, the Company
shall request that the Company’s auditors perform certain procedures regarding executive
compensation and expense reimbursements and related party transactions as the Majority Holders
reasonably request. Notwithstanding the provisions of this Section 3A, from and after the
Company’s initial Public Offering, the Company shall only be required to provide the information
rights set forth in Section 3A to the extent permitted under the Securities Act and
Securities Exchange Act.




          3B. Inspection of Property. The Company shall permit any representatives designated
by any Purchaser (so long as such Purchaser holds any Preferred Stock or Common Stock) or any
holder (together with its Affiliates) of at least 10% of the Investor Preferred or at least 15% of
the Investor Common, upon reasonable notice and during normal business hours and such other times
as any such holder may reasonably request, to (a) visit and inspect any of






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the properties of the Company and its Subsidiaries, (b) examine the corporate and financial
records of the Company and its Subsidiaries and make copies thereof or extracts therefrom and (c)
discuss the affairs, finances and accounts of any such entities with the directors, officers, key
employees and independent accountants of the Company and its Subsidiaries; provided that
the Company shall have the right to have its chief financial officer present at any meetings with
the Company’s independent accountants. Notwithstanding the provisions of this Section 3B,
from and after the Company’s initial Public Offering, the Company shall only be required to grant
the inspection rights set forth in Section 3B to the extent permitted under the Securities
Act and Securities Exchange Act.




          3C. Restrictions. The Company shall not, without the prior written consent of the
Majority Holders:




          (a) directly or indirectly declare or pay any dividends or make any distributions upon any of
its equity securities, other than distributions of unpaid yield or unreturned capital on the
Preferred Stock pursuant to the Certificate of Incorporation;




          (b) except as required by the Certificate of Incorporation or the Senior Management
Agreements, directly or indirectly redeem, purchase or otherwise acquire, or permit any Subsidiary
to redeem, purchase or otherwise acquire, any of the Company’s equity securities (including,
without limitation, warrants, options and other rights to acquire equity securities);




          (c) except as expressly contemplated by this Agreement or the Senior Management Agreements,
authorize, issue, sell or enter into any agreement providing for the issuance (contingent or
otherwise), or permit any Subsidiary to authorize, issue, sell or enter into any agreement
providing for the issuance (contingent or otherwise) of, (i) any notes or debt securities
containing equity features (including, without limitation, any notes or debt securities convertible
into or exchangeable for equity securities, issued in connection with the issuance of equity
securities or containing profit participation features) or (ii) any equity securities (or any
securities convertible into or exchangeable for any equity securities) or rights to acquire any
equity securities, other than the issuance of equity securities by a Subsidiary to the Company or
another Subsidiary;




          (d) make, or permit any Subsidiary to make, any loans or advances to, guarantees for the
benefit of, or Investments in, any Person, except for (A) reasonable advances to employees in the
ordinary course of business as well as travel advances, (B) relocation loans, (C) trade credit
extended to customers in the ordinary course of business and (D) Investments having a stated
maturity no greater than one year from the date the Company makes such Investment in (1)
obligations of the United States government or any agency thereof or obligations guaranteed by the
United States government, (2) certificates of deposit of commercial banks having combined capital
and surplus of at least $50 million, (3) commercial paper with a rating of at least
“Prime-1” by Moody’s Investors Service, Inc. or (4) money market accounts investing in any
of the foregoing or in substantially similar investments;




          (e) merge or consolidate with any Person or permit any Subsidiary to merge or consolidate with
any Person (other than a wholly-owned Subsidiary);







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          (f) sell, lease or otherwise dispose of or permit any Subsidiary to sell, lease or otherwise
dispose of, more than 5% of the consolidated assets of the Company and its Subsidiaries (computed
on the basis of book value, determined in accordance with United States generally accepted
accounting principles consistently applied, or fair market value, determined by the Board in its
reasonable good faith judgment) in any transaction or series of related transactions (other than
sales of inventory in the ordinary course of business);




          (g) except as contemplated by the Certificate of Incorporation and the Stockholders Agreement
in connection with a Public Offering, liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation, any reorganization into a
limited liability company or a partnership);




          (h) acquire, or permit any Subsidiary to acquire, any interest in any business (whether by a
purchase of assets, purchase of securities, merger or otherwise), or enter into any joint venture;




          (i) enter into the ownership, active management or operation of any business other than the
ownership of the securities of its Subsidiaries or permit any Subsidiary to enter into the
ownership, active management or operation of any business other than a business in the acute-care
hospital industry;




          (j) enter into, or permit any Subsidiary to enter into, any transaction with any of its or any
Subsidiary’s officers, directors, employees or Affiliates or any individual related by blood,
marriage or adoption to any such Person (a “Relative”) or any entity in which any such
Person or individual owns a beneficial interest (a “Related Entity”), except for normal
employment arrangements and benefit programs on reasonable terms and except as otherwise expressly
contemplated by this Agreement, the Senior Management Agreements and the Professional Services
Agreement;




          (k) become subject to, or permit any of its Subsidiaries to become subject to, any agreement
or instrument that by its terms would (under any circumstances) restrict (A) the right of any
Subsidiary to make loans or advances or pay dividends to, transfer property to, or repay any
Indebtedness owed to, the Company or any Subsidiary or (B) the Company’s right to perform the
provisions of this Agreement, the Certificate of Incorporation or the other Transaction Documents;




          (1) except as expressly contemplated by this Agreement, make any amendment to the Certificate
of Incorporation that would increase the number of authorized shares of Preferred Stock or Common
Stock or adversely affect or otherwise impair the rights or the relative preferences and priorities
of the holders of the Preferred Stock or Common Stock under this Agreement, the Certificate of
Incorporation or the other Transaction Documents; or




          (m) create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur,
assume or suffer to exist, Indebtedness exceeding the amounts approved therefor by the Board in the
annual budget.




          3D. Affirmative Covenants. So long as the Purchasers hold any shares of Preferred
Stock or Common Stock, the Company shall, and shall cause each Subsidiary to:







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          (a) comply with all applicable laws, rules and regulations of all governmental authorities,
the violation of which would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets or operations of the Company and its Subsidiaries
taken as a whole, and pay and discharge when payable all taxes, assessments and governmental
charges (except to the extent the same are being contested in good faith and adequate reserves
therefor have been established); and




          (b) enter into and maintain appropriate nondisclosure and noncompete agreements with its key
employees.




          3E. Current Public Information. At all times after the Company (or its successor) has
filed a registration statement with the Securities and Exchange Commission pursuant to the
requirements of either the Securities Act or the Securities Exchange Act, the Company (or its
successor) shall file all reports required to be filed by it under the Securities Act and the
Securities Exchange Act and the rules and regulations adopted by the Securities and Exchange
Commission thereunder and shall take such further action as any holder or holders of Restricted
Securities may reasonably request, all to the extent required to enable such holders to sell
Restricted Securities pursuant to (a) Rule 144 adopted by the Securities and Exchange Commission
under the Securities Act (as such rule may be amended from time to time) or any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission or (b) a registration
statement on Form S-2 or S-3 or any similar registration form hereafter adopted by the Securities
and Exchange Commission. Upon request, the Company (or its successor) shall deliver to any holder
of Restricted Securities a written statement as to whether it has complied with such requirements.




          3F. Amendment of Other Agreements. The Company shall not amend, modify or waive any
provision of the Senior Management Agreements or any other agreement with key executives of the
Company without the prior written consent of the Majority Holders. The Company shall enforce the
provisions of the Senior Management Agreements and any other agreement with key executives of the
Company and shall exercise all of its rights and remedies thereunder (including, without
limitation, any repurchase options and first refusal rights) unless it is otherwise directed by the
Majority Holders.




          3G. Public Disclosures. The Company shall not, nor shall it permit any Subsidiary to,
disclose any Purchaser’s name or identity as an investor in the Company in any press release or
other public announcement or in any document or material filed with any governmental entity,
without the prior written consent of such Purchaser, unless such disclosure is required by
applicable law or governmental regulations or by order of a court of competent jurisdiction, in
which case prior to making such disclosure the Company shall give written notice to such Purchaser
describing in reasonable detail the proposed content of such disclosure and shall permit such
Purchaser to review and comment upon the form and substance of such disclosure.




          3H. Unrelated Business Taxable Income; Effectively Connected Income. The Company
shall not engage in any transaction which is reasonably likely to cause any Purchaser or any
limited partner thereof that is exempt from income taxation under Section 501(a) of the






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IRC and, if applicable, any pension plan that any such trust may be a part of, to recognize
unrelated business taxable income as defined in Section 512 and Section 514 of the IRC.




          3I. Hart-Scott-Rodino Compliance. In connection with any transaction in which the
Company is involved (a “Transaction”) that is required to be reported under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time (the “HSR
Act”), the Company shall prepare and file all documents with the Federal Trade Commission and
the United States Department of Justice which may be required to comply with the HSR Act, and shall
promptly furnish all materials thereafter requested by any of the regulatory agencies having
jurisdiction over such filings, in connection with a Transaction. The Company shall take all
reasonable actions and shall file and use reasonable best efforts to have declared effective or
approved all documents and notifications with any governmental or regulatory bodies, as may be
necessary or may reasonably be requested under federal antitrust laws for the consummation of the
Transaction. Notwithstanding the foregoing, if any Purchaser, rather than the Company, is required
to make a filing under the HSR Act in connection with a Transaction, the Company will provide to
such Purchaser all necessary information for such filing, will facilitate such filing and will pay
all fees and expenses associated with such filing.




          Section 4. Transfer of Restricted Securities.




          (a) Restricted Securities are transferable only pursuant to (i) Public Offerings, (ii) Rule
144 of the Securities and Exchange Commission (or any similar rule or rules then in force) if such
rule or rules are available and (iii) subject to the conditions specified in clause (b)
below, any other legally available means of transfer.




          (b) In connection with the transfer of any Restricted Securities (other than a transfer
described in Sections 4(a)(i) or (ii) above), the holder thereof shall deliver
written notice to the Company describing in reasonable detail the transfer or proposed transfer,
together with an opinion of Kirkland & Ellis LLP or other counsel that (to the Company’s reasonable
satisfaction) is knowledgeable in securities law matters to the effect that such transfer of
Restricted Securities may be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the holder of the Restricted Securities delivers to the Company an
opinion of Kirkland & Ellis LLP or such other counsel that no subsequent transfer of such
Restricted Securities shall require registration under the Securities Act, the Company shall
promptly upon such contemplated transfer deliver to the prospective transferor new certificates for
such Restricted Securities that do not bear the Securities Act legend set forth in Section
7C. If the Company is not required to deliver new certificates for such Restricted Securities
not bearing such legend, the holder thereof shall not transfer the same until the prospective
transferee has confirmed to the Company in writing its agreement to be bound by the conditions
contained in this Section 4 and Section 7C.




          (c) Upon the request of a Purchaser, the Company shall promptly supply to such Purchaser or
its prospective transferees all information regarding the Company required to be delivered in
connection with a transfer pursuant to Rule 144A of the Securities and Exchange Commission.







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          Section 5. Representations and Warranties of the Company. As a material inducement to
each Purchaser to enter into this Agreement and purchase the Securities, the Company hereby
represents and warrants to each Purchaser that:




          5A. Organization and Corporate Power. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of Delaware and is qualified to do business in
every jurisdiction in which the failure to so qualify would reasonably be expected to have a
material adverse effect on the financial condition, operating results, assets or operations of the
Company and its Subsidiaries taken as a whole. The Company has all requisite corporate power and
authority and all material licenses, permits and authorizations necessary to own and operate its
properties, to carry on its businesses as now conducted and presently proposed to be conducted and
to carry out the transactions contemplated by this Agreement. The copies of the Company’s
Certificate of Incorporation and Bylaws that have been furnished to the Purchasers reflect all
amendments made thereto at any time prior to the date of this Agreement and are correct and
complete.




          5B. Equity Securities and Related Matters.




          (a) As of the Initial Closing and immediately thereafter, the authorized equity securities of
the Company shall consist of the following: (i) 300,000.000 shares designated as Preferred Stock,
of which none shall be issued and outstanding, 196,000.000 shares of Preferred Stock shall be
reserved for issuance to the Purchasers pursuant to Section 1B hereof and 2,123.645 shares
of Preferred Stock shall be reserved for issuance to Executives pursuant to the Senior Management
Agreements, and (ii) 75,000,000 shares designated as Common Stock, of which 35,968,259 shares of
Common Stock shall be issued and outstanding, 25,000,000 shares of Common Stock shall be reserved
for issuance to the Purchasers pursuant to Section 1B hereof, and 2,211,688 shares of
Common Stock shall be reserved for issuance (whether in the form of restricted stock, upon exercise
of options or otherwise) to other executives of the Company and its Subsidiaries as determined by
the Board. As of the Initial Closing, the Company shall not have outstanding any securities
convertible or exchangeable for any equity securities of the Company or containing any profit
participation features, nor shall it have outstanding any rights or options to subscribe for or to
purchase its equity securities or any securities convertible into or exchangeable for its equity
securities or any equity appreciation rights or phantom equity plans other than pursuant to and as
contemplated by this Agreement, the Certificate of Incorporation and the Senior Management
Agreements. As of the Initial Closing, the Company shall not be subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any of its equity securities
or any warrants, options or other rights to acquire its equity securities, except pursuant to this
Agreement, the Certificate of incorporation and the Senior Management. Agreements. Immediately
following the Initial Closing, all of the Company’s outstanding equity securities shall be validly
issued, fully paid and nonassessable.




          (b) There are no statutory or, to the best of the Company’s knowledge, contractual
securityholders preemptive rights or rights of refusal with respect to the issuance of the
Preferred Stock and Common Stock hereunder or the issuance of the Preferred Stock and Common Stock
pursuant to Section 1B(b), except as expressly contemplated in the Stockholders Agreement,
the Senior Management Agreements, the Certificate of Incorporation or as provided herein. Based in
part on the investment representations of the Purchasers in Section 7C hereof






-11-









 







and of the Executives in Section 1(f) of the Senior Management Agreements, the Company has not
violated any applicable federal or state securities laws in connection with the offer, sale or
issuance of any of its equity securities, and the offer, sale and issuance of the Preferred Stock
and Common Stock hereunder and pursuant to Section 1B(b) hereof do not and will not require
registration under the Securities Act or any applicable state securities laws. To the best of the
Company’s knowledge, there are no agreements between the Company’s stockholders with respect to the
voting or transfer of the Company’s equity securities or with respect to any other aspect of the
Company’s affairs, except for the Stockholders Agreement, the Certificate of Incorporation, the
Senior Management Agreements, the Registration Agreement and the Professional Services Agreement.




          5C. Subsidiaries; Investments. CH Subsidiary is the Company’s only Subsidiary. The
Company owns 100% of the capital stock of CH Subsidiary. CH Subsidiary is duly incorporated,
validly existing and in good standing under the laws of Delaware, possesses all requisite corporate
power and authority arid, except as set forth on Schedule 5C, all material licenses,
permits and authorizations necessary to own its properties and to carry on its business as now
being conducted and as presently proposed to be conducted and is qualified to do business in every
jurisdiction in which its ownership of property or the conduct of its business requires it to
qualify.




          5D. Authorization; No Breach. The execution, delivery and performance of this
Agreement, the Senior Management Agreements, the Stockholders Agreement, the Registration
Agreement, the Professional Services Agreement, and all other agreements contemplated hereby or
thereby to which the Company is a party, have been duly authorized by the Company. This Agreement,
the Senior Management Agreements, the Stockholders Agreement, the Registration Agreement, the
Professional Services Agreement and all other agreements contemplated hereby or thereby each
constitutes a valid and binding obligation of the Company, enforceable in accordance with its
terms. The execution and delivery by the Company of this Agreement, the Senior Management
Agreements, the Stockholders Agreement, the Registration Agreement, the Professional Services
Agreement, and all other agreements contemplated hereby or thereby to which the Company is a party,
the offering, sale and issuance of the Preferred Stock and Common Stock hereunder (including
pursuant to Section 1B(b)) and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company do not and will not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the
creation of any lien, security interest, charge or encumbrance upon the Company’s equity securities
or assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative or governmental
body pursuant to, the Certificate of Incorporation of the Company or the Bylaws of the Company or
any law, statute, rule or regulation to which the Company is subject, or any agreement, instrument,
order, judgment or decree to which the Company is a party or by which it is bound.




          5E. Conduct of Business; Liabilities. Other than the negotiation, execution and
delivery of this Agreement, the Senior Management Agreements, the Stockholders Agreement, the
Registration Agreement, the Professional Services Agreement and the other agreements contemplated
hereby and thereby, prior to the Initial Closing, the Company has not






-12-









 







(i) conducted any business, (ii) incurred any expenses, obligations or liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise, whether or not known to the Company and
whether due or to become due and regardless of when asserted), (iii) owned any assets, (iv) entered
into any contracts or agreements, or (v) violated any laws or governmental rules or regulations.




          5F. Litigation, etc. There are no actions, suits, proceedings, orders, investigations
or claims pending or, to the best of the Company’s knowledge, threatened against or affecting
either the Company or its Subsidiaries (or to the best of the Company’s knowledge, pending or
threatened against or affecting any of the officers, directors or employees of the Company or its
Subsidiaries with respect to their businesses or proposed business activities) at law or in equity,
or before or by any governmental department, commission, board, bureau, agency or instrumentality
with respect to the transactions contemplated by this Agreement.




          5G. Brokerage. There are no claims for brokerage commissions, finders’ fees or
similar compensation in connection with the transactions contemplated by this Agreement based on
any arrangement or agreement binding upon the Company. The Company shall pay, and hold the
Purchasers harmless against, any liability, loss or expense (including, without limitation,
attorneys’ fees and out-of-pocket expenses) arising in connection with any such claim.




          5H. Governmental Consent, etc. No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is required in connection with the
execution, delivery and performance by the Company of this Agreement or the other agreements
contemplated hereby, or the consummation by the Company of any other transactions contemplated
hereby or thereby.




          5I. Disclosure. Neither this Agreement nor any of the schedules, attachments, written
statements, documents, certificates or other items prepared or supplied to the Purchasers by or on
behalf of the Company with respect to the transactions contemplated hereby contain any untrue
statement of a material fact or omit a material fact necessary to make each statement contained
herein or therein not misleading. There is no fact which the Company has not disclosed to the
Purchasers in writing and of which any of its officers, directors, managers or executive employees
is aware and which has had or would reasonably be anticipated to have a material adverse effect
upon the existing or expected financial condition, operating results, assets, customer or supplier
relations or employee relations of the Company.




          5J. Initial Closing Date. The representations and warranties of the Company contained
in this Section 5 and elsewhere in this Agreement and all information contained in any
exhibit, schedule or attachment hereto or in any writing delivered by, or on behalf of, the Company
to the Purchasers shall be true and correct in all material respects on the date of the Initial
Closing as though then made, except as affected by the transactions expressly contemplated by this
Agreement.




          Section 6. Definitions. For the purposes of this Agreement, the following terms have
the meanings set forth below:







-13-









 








          “Affiliate” of any particular Person or entity means any other person or entity
controlling, controlled by or under common control with such particular person or entity; it being
understood and agreed that GTCR and its Affiliates shall for all purposes hereunder be Affiliates
of GTCR Golder Rauner, L.L.C. and its Affiliates. For purposes of this Agreement, all holdings of
Preferred Stock and Common Stock by Persons who are Affiliates of each other shall be aggregated
for purposes of meeting any threshold tests under this Agreement.




          “Common Stock” means the Common Stock, par value $0.01 per share, of the Company.




          “Indebtedness” means all indebtedness for borrowed money (including purchase money
obligations) maturing one year or more from the date of creation or incurrence thereof or renewable
or extendible at the option of the debtor to a date one year or more from the date of creation or
incurrence thereof, all indebtedness under revolving credit arrangements extending over a year or
more, all capitalized lease obligations and all guarantees of any of the foregoing.




          “Investor Common” means (i) any Common Stock issued pursuant to this Agreement
(including, without limitation, pursuant to Section 1B(b) hereto) and (ii) any Common Stock
issued or issuable with respect to the Common Stock referred to in clause (i)above by way
of stock dividends or stock splits or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization. As to any particular shares of Investor Common,
such shares shall cease to be Investor Common when they have been (a) effectively registered under
the Securities Act and disposed of in accordance with the registration statement covering them or
(b) distributed to the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act (or any similar rule then in force).




          “Investor Preferred” means (i) the Preferred Stock issued hereunder (including,
without limitation, pursuant to Section 1B(b)), and (ii) any Preferred Stock issued or
issuable with respect to the Preferred Stock referred to in clause (1) above by way of stock
dividends or stock splits or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares of Investor Preferred, such
Shares shall cease to be Investor Preferred when they have been (a) effectively registered under
the Securities Act and disposed of in accordance with the registration statement covering them or
(b) distributed to the public through a broker, dealer or market maker pursuant to Rule 144 under
the Securities Act (or any similar rule then in force).




          “Investor Securities” means, collectively, the Investor Preferred and the Investor
Common.




          “Investment” as applied to any Person means (i) any direct or indirect purchase or
other acquisition by such Person of any notes, obligations, instruments, stock, securities or
ownership interest (including partnership interests and joint venture interests) of any other
Person and (ii) any capital contribution by such Person to any other Person.




          “IRC” means the Internal Revenue Code of 1986, as amended, and any reference to any
particular IRC Section shall be interpreted to include any revision of or successor to that Section
regardless of how numbered or classified.







-14-









 








          “Majority Holders” means the holders of a majority of the Investor Preferred or, if no
Investor Preferred is outstanding, the holders of a majority of the Investor Common.




          “Officer’s Certificate” means a certificate signed by the Company’s chief executive
officer or its chief financial officer, stating that (i) the officer signing such certificate has
made or has caused to be made such investigations as are necessary in order to permit such officer
to verify the accuracy of the information set forth in such certificate and (ii) to the best of
such officer’s knowledge, such certificate does not misstate any material fact and does not omit to
state any fact necessary to make the certificate not misleading.




          “Person” means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization, an investment fund, any other business entity and a governmental entity or any
department, agency or political subdivision thereof.




          “Preferred Stock” means the Cumulative Redeemable Preferred Stock, par value $0.01 per
share, of the Company.




          “Public Offering” means the sale in a public offering registered under the Securities
Act of equity securities of the Company or a corporate successor to the Company




          “Restricted Securities” means (i) the Preferred Stock and Common Stock issued
hereunder and pursuant to Section 1B(b) hereof and (ii) any securities issued with respect
to the securities referred to in clause (i) above by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities shall cease to be
Restricted Securities when they have (a) been effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering them, (b) become eligible for
sale pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the Securities Act legend
set forth in Section 7C have been delivered by the Company in accordance with Section
4(b). Whenever any particular securities cease to be Restricted Securities, the holder thereof
shall be entitled to receive from the Company, without expense, new securities of like tenor not
bearing a Securities Act legend of the character set forth in Section 7C.




          “Securities Act” means the Securities Act of 1933, as amended, or any similar federal
law then in force.




          “Securities Exchange Act” means the Securities Exchange Act of 1934, as amended, or
any similar federal law then in force.




          “Securities and Exchange Commission” includes any governmental body or agency
succeeding to the functions thereof.




          “Subsidiary” means, with respect to any Person, any corporation, limited liability
company, partnership, association, or business entity of which (i) if a corporation, a majority of
the total voting power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof is at the time






-15-









 







owned or controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a majority of
partnership or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association, or other business entity (other
than a corporation) if such Person or Persons shall be allocated a majority of limited liability
company, partnership, association, or other business entity gains or losses or shall be or control
any managing director or general partner of such limited liability company, partnership,
association, or other business entity. For purposes hereof, references to a “Subsidiary”
of any Person shall be given effect only at such times that such Person has one or more
Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary
of the Company.




          Section 7. Miscellaneous.




          7A. Expenses. The Company agrees to pay, and hold the Purchasers and all holders of
Investor Securities harmless against liability for the payment of, (i) the reasonable fees and
expenses of their counsel arising in connection with the negotiation and execution of this
Agreement and the consummation of the transactions contemplated by this Agreement (including,
without limitation, fees and expenses arising with respect to any subsequent purchase of Common
Stock or Preferred Stock pursuant to Section 1B(b) hereof), (ii) the fees and expenses
incurred with respect to any amendments or waivers (whether or not the same become effective) under
or in respect of this Agreement, the Certificate of Incorporation, the Bylaws, the Senior
Management Agreements, the Stockholders Agreement, the Registration Agreement, the other agreements
contemplated hereby or thereby, (iii) stamp and other taxes that may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery or acquisition of any Common
Stock or Preferred Stock purchased hereunder or in accordance with Section 1B(b) hereof,
(iv) the fees and expenses incurred with respect to the interpretation or enforcement of the rights
granted under this Agreement, the Certificate of Incorporation, the Bylaws, the Senior Management
Agreements, the Stockholders Agreement, the Registration Agreement, the Professional Services
Agreement, the other agreements contemplated hereby or thereby and (v) such reasonable travel
expenses, legal fees and other out-of-pocket fees and expenses as have been or may be incurred by
any Purchaser, its Affiliates and its Affiliates’ directors, officers and employees in connection
with any Company-related financing and in connection with the rendering of any other services by a
Purchaser or its Affiliates (including, but not limited to, fees and expenses incurred in attending
board of directors or other Company-related meetings).




          7B. Remedies. Each holder of Investor Securities shall have all rights and remedies
set forth in this Agreement, the Certificate of Incorporation, the Bylaws, the Stockholders
Agreement, the Registration Agreement and all rights and remedies that such holders have been
granted at any time under any other agreement or contract and all of the rights that such holders
have under any law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other security), to recover
damages by reason of any breach of any provision of this Agreement and to exercise all other rights
granted by law.







-16-









 








          7C. Each Purchaser’s Investment Representations. Each Purchaser hereby represents (i)
that it is acquiring the Restricted Securities purchased hereunder or acquired pursuant hereto for
its own account with the present intention of holding such securities for purposes of investment,
and that it has no intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws, (ii) that it is an “accredited
investor” and a sophisticated investor for purposes of applicable U.S. federal and state securities
laws and regulations, (iii) that the Restricted Securities were not offered to such Purchaser by
any means of general solicitation or general advertising, (iv) that it believes that it has such
knowledge and experience in financial and business matters that such Purchaser is capable of
evaluating the merits and risks of an investment in the Company, (v) that it is able to bear the
economic risks of an investment in the Restricted Securities and could afford a complete loss of
such investment, (vi) that this Agreement and each of the other agreements contemplated hereby
constitutes (or will constitute) the legal, valid and binding obligation of such Purchaser,
enforceable in accordance with its terms and (vii) that the execution, delivery and performance of
this Agreement and such other agreements by such Purchaser does not and will not conflict with,
violate or cause a breach of any agreement, contract or instrument to which such Purchaser is
subject. Notwithstanding the foregoing, nothing contained herein shall prevent any Purchaser and
subsequent holders of Restricted Securities from transferring such securities in compliance with
the provisions of Section 4 hereof. Each certificate for Restricted Securities shall be
imprinted with a legend in substantially the following form:





“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON MAY 4,
2005 AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
CONDITIONS SPECIFIED IN THE STOCK PURCHASE AGREEMENT, DATED AS OF MAY 4, 2005 BY AND
AMONG THE ISSUER (THE “COMPANY”) AND CERTAIN INVESTORS, AND THE COMPANY
RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS
HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL
BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE.




THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS, A FULL
STATEMENT OF ALL OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES
THEREON AUTHORIZED TO BE ISSUED BY THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.”



          7D. Consent to Amendments. Except as otherwise expressly provided herein, the
provisions of this Agreement may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the Company has obtained
the prior written consent of the Majority Holders. No other course of dealing between the Company
and the holder of any Preferred Stock or Common Stock or any delay in






-17-









 







exercising any rights hereunder or under the Certificate of Incorporation shall operate as a
waiver of any rights of any such holders. For purposes of this Agreement, shares of Preferred
Stock or Common Stock held by the Company or any of its Subsidiaries shall not be deemed to be
outstanding.




          7E. Survival of Representations and Warranties. All representations and warranties
contained herein or made in writing by any party in connection herewith shall survive the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby,
regardless of any investigation made by a Purchaser or on its behalf.




          7F. Successors and Assigns. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, and whether or not any express assignment has been made,
the provisions of this Agreement that are for each Purchaser’s benefit as a purchaser or holder of
Preferred Stock or Common Stock are also for the benefit of, and enforceable by, any subsequent
holder of Preferred Stock or Common Stock. The rights and obligations of each Purchaser under this
Agreement and the agreements contemplated hereby may be assigned by such Purchaser at any time, in
whole or in part, to any investment fund managed by GTCR or its Affiliates or any successor
thereto.




          7G. Generally Accepted Accounting Principles. Where any accounting determination or
calculation is required to be made under this Agreement or the exhibits hereto, such determination
or calculation (unless otherwise provided) shall be made in accordance with United States generally
accepted accounting principles, consistently applied, except that if because of a change in United
States generally accepted accounting principles the Company would have to alter a previously
utilized accounting method or policy in order to remain in compliance with United States generally
accepted accounting principles, such determination or calculation shall continue to be made in
accordance with the Company’s previous accounting methods and policies.




          7H. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement 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 will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.




          7I. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.




          7J. Delivery by Facsimile. This Agreement, the agreements referred to herein, and
each other agreement or instrument entered into in connection herewith or therewith or contemplated
hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by
means of a facsimile machine, shall be treated in all manner and respects as an






-18-









 







original agreement or instrument and shall be considered to have the same binding legal effect
as if it were the original signed version thereof delivered in person. At the request of any party
hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute
original forms thereof and deliver them to all other parties. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the
fact that any signature or agreement or instrument was transmitted or communicated through the use
of a facsimile machine as a defense to the formation or enforceability of a contract and each such
party forever waives any such defense.




          7K. Descriptive Headings; Interpretation. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a section of this Agreement. The use of
the word “including” in this Agreement shall be by way of example rather than by limitation.




          7L. Governing Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.




          7M. Mutual Waiver of Jury Trial. Because disputes arising in connection
with complex transactions are most quickly and economically resolved by an experienced and expert
person and the parties wish applicable state and federal laws to apply (rather than arbitration
rules), the parties desire that their disputes be resolved by a judge applying such applicable
laws. Therefore, to achieve the best combination of the benefits of the judicial system and of
arbitration, each party to this agreement hereby waives all rights to trial by jury in any action,
suit, or proceeding brought to resolve any dispute between or among any of the parties hereto,
whether arising in contract, tort or otherwise, arising out of, connected with, related or
incidental to this agreement or the transactions contemplated hereby.




          7N. Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given when (i) delivered personally to the recipient, (ii) sent to the recipient by
reputable express courier service (charges prepaid), (iii) mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid, or (iv) telecopied to the recipient
(with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that
same day) if telecopied before 5:00 p.m. Chicago, Illinois time on a business day, and otherwise on
the next business day. Such notices, demands and other communications shall be sent to the
Purchasers and to the Company at the addresses indicated below (or at such other address as shall
be given in writing by one party to the others):







-19-









 







If to the Company:



Capella Holdings, Inc.

214 Overlook Circle #250

Brentwood, TN 37027

Attention:   Chief Executive Officer

Telephone:  (615) 376-9221



with copies to:



GTCR Golder Rauner, L.L.C.

6100 Sears Tower

Chicago, Illinois 60606-6402

Attention:   Joseph P. Nolan

                
  Peter M. Stavros

Telephone: (312) 382-2200

Facsimile:   (312) 382-2201



Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attention:   Kevin R. Evanich, P.C.

                
  Jeffrey A. Fine, Esq.

Telephone:  (312) 861-2000

Facsimile:    (312) 861-2200



If to any of the Purchasers:



GTCR Golder Rauner, L.L.C.

6100 Sears Tower

Chicago, Illinois 60606-6402

Attention:   Joseph P. Nolan

        
           Peter M. Stavros

Telephone: (312) 382-2200

Facsimile:   (312) 382-2201



with a copy to:



Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attention:  Kevin R. Evanich, P.C.

               
   Jeffrey A. Fine, Esq.

Telephone: (312) 861-2000

Facsimile:    (312) 861-2200



or to such other address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party.







-20-









 








          7O. Entire Agreement. This Agreement, those documents expressly referred to herein
and other documents of even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or representations by or
among the parties, written or oral, that may have related to the subject matter hereof in any way.




          7P. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.




*          *          *          *          *





-21-









 








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




	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	CAPELLA HOLDINGS, INC.	 
	 
	 	 	 	 	 
	 

	 	By:	 	/S/ Daniel S. Slipkovich	 
	 

	 	 	 	 	 
	 

	 	Name:
	 	Daniel S. Slipkovich	 
	 

	 	Its:
	 	Chief Executive Officer	 
	 
	 	 	 	 	 
	 	 	GTCR FUND VIII, L.P.	 
	 
	 	 	 	 	 
	 

	 	By:
	 	GTCR Partners VIII, L.P.	 
	 

	 	Its:
	 	General Partner	 
	 
	 	 	 	 	 
	 

	 	By:
	 	GTCR Golder Rauner II, L.L.C.	 
	 

	 	Its:
	 	General Partner	 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Joseph P. Nolan	 
	 

	 	 	 	 	 
	 

	 	Name:
	 	Joseph P. Nolan	 
	 

	 	 	 	 	 
	 

	 	Its:
	 	Principal	 
	 
	 	 	 	 	 
	 	 	GTCR FUND VIII/B, L.P.	 
	 
	 	 	 	 	 
	 

	 	By:
	 	GTCR Partners VIII, L.P.	 
	 

	 	Its:
	 	General Partner	 
	 
	 	 	 	 	 
	 

	 	By:
	 	GTCR Golder Rauner II, L.L.C.	 
	 

	 	Its:
	 	General Partner	 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Joseph P. Nolan	 
	 

	 	 	 	 	 
	 

	 	Name:
	 	Joseph P. Nolan	 
	 

	 	 	 	 	 
	 

	 	Its:
	 	Principal	 
	 
	 	 	 	 	 
	 	 	GTCR CO-INVEST II, L.P.	 
	 
	 	 	 	 	 
	 

	 	By:
	 	GTCR Golder Rauner II, L.L.C.	 
	 

	 	Its:
	 	General Partner	 
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Joseph P. Nolan	 
	 

	 	 	 	 	 
	 

	 	Name:
	 	Joseph P. Nolan	 
	 

	 	 	 	 	 
	 

	 	Its:
	 	Principal	 






SIGNATURE PAGE TO THE STOCK PURCHASE AGREEMENT






 









 








LIST OF EXHIBITS




	 	 	 

	Exhibit A

	 	Certificate of Incorporation
	 
	 	 
	Exhibit B

	 	Form of Senior Management Agreement
	 
	 	 
	Exhibit C

	 	Form of Stockholders Agreement
	 
	 	 
	Exhibit D

	 	Form of Registration Rights Agreement
	 
	 	 
	Exhibit E

	 	Form of Professional Services Agreement
	 
	 	 
	Exhibit F

	 	Form of Subsidiary Charter
	 
	 	 
	Exhibit G

	 	Form of Subsidiary Bylaws






 









 






Schedule of Purchasers1




	 	 	 	 	 	 	 	 	 
	 	 	Number of Preferred	 	Number of
	Purchaser	 	Shares at Initial Closing	 	Common Shares
	GTCR Fund VIII, L.P.
	 	 	165,983,776	 	 	 	42,342,800	 
	 
	GTCR Fund VIII/B, L.P.
	 	 	29,130,304	 	 	 	7,431,200	 
	 
	GTCR Co-Invest II, L.P.
	 	 	885,920	 	 	 	226,000	 
	 
	 	 	 	 	 	 	 	 
	 
	TOTAL
	 	 	196,000,000	 	 	 	50,000,000	 
	 
	 	 	 	 	 	 	 	 








 




			
	1	 	Note: Form attached for reference
purposes. Actual Schedule of Investors to be maintained with the books and
records of the Company at Fund VIII’s principal office.