Ex-4.3 Purchase Agreement, dated as of June 30, 2005

EX-4.3 4 g96164exv4w3.txt EX-4.3 PURCHASE AGREEMENT, DATED AS OF JUNE 30, 2005 Exhibit 4.3 PSYCHIATRIC SOLUTIONS, INC. $220,000,000 7-3/4% SENIOR SUBORDINATED NOTES DUE 2015 PURCHASE AGREEMENT June 30, 2005 Citigroup Global Markets Inc. As Representative of the Initial Purchasers c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: Psychiatric Solutions, Inc., a corporation organized under the laws of Delaware (the "COMPANY"), proposes to issue and sell to the several parties named in Schedule I hereto (the "INITIAL PURCHASERS"), for whom you (the "REPRESENTATIVE") are acting as representative, $220,000,000 aggregate principal amount of its 7-3/4% Senior Subordinated Notes Due 2015 (the "NOTES", and together with the Guarantees (as defined below), the "SECURITIES"). The Securities are to be issued under an indenture (the "INDENTURE"), to be dated as of the Closing Date (as defined below), among the Company, each of the Guarantors (as defined below) and Wachovia Bank, National Association, as trustee (the "TRUSTEE"). The Securities will have the benefit of a registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated as of the Closing Date, among the Company, each of the Guarantors and the Initial Purchasers, pursuant to which the Company and the Guarantors will agree to register a new series of notes (the "EXCHANGE NOTES") and related guarantees (the "EXCHANGE GUARANTEES," and, together with the Exchange Notes, the "EXCHANGE SECURITIES") under the Act (as defined in Section 18) subject to the terms and conditions therein specified. Pursuant to the Registration Rights Agreement, the Exchange Securities will be offered in exchange for the Securities. The Notes will be fully and unconditionally guaranteed (the "GUARANTEES") by each of the Company's direct and indirect domestic subsidiaries set forth on Schedule II hereto (collectively, the "PSI GUARANTORS") and, as of the closing date of the Acquisition (as defined below) by each of the additional subsidiaries as set forth on Schedule III hereto (collectively, the "ADDITIONAL GUARANTORS," and together with the PSI Guarantors, the "GUARANTORS"). To the extent there are no additional parties listed on Schedule I other than you, the term Representative as used herein shall mean you as the Initial Purchasers, and the terms Representative and Initial Purchasers shall mean either the singular or plural as the context requires. The use of the neuter in this Agreement shall include the feminine and masculine wherever appropriate. Certain terms used herein are defined in Section 18 hereof. The sale of the Securities to the Initial Purchasers will be made without registration of the Securities under the Act in reliance upon exemptions from the registration requirements of the Act. In connection with the offering of the Notes, the Company and the Guarantors will (i) consummate the transactions contemplated by the stock purchase agreement, dated as of March 10, 2005, as amended to date (the "STOCK PURCHASE AGREEMENT"), with Ardent Health Services LLC and Ardent Behavioral (as defined in Section 18) relating to the acquisition by the Company of all of the outstanding capital stock of Ardent Behavioral for approximately $560.0 million (the "ACQUISITION"), to be funded partially by borrowings under the $150,000,000 senior unsecured term loan agreement, to be dated as of July 1, 2005, among the Company, the guarantors parties thereto, Citicorp North America, Inc., as administrative agent, Citigroup Global Markets Inc., as syndication agent and documentation agent, and the lenders thereto (the "BRIDGE FACILITY") and (ii) enter into the Second Amended and Restated Credit Agreement, to be dated as of July 1, 2005, among the Company, the subsidiary guarantors party thereto, and lenders and letters of credit issuer parties thereto, which will provide for a new senior secured term loan facility of $325.0 million and a new senior secured revolving credit facility of up to $150.0 million (the "NEW SENIOR SECURED CREDIT FACILITIES," and together with the Stock Purchase Agreement, the "RELATED DOCUMENTS"). The net proceeds from the sale of the Notes will be applied as described in the "Use of Proceeds" section of the Final Memorandum (as defined below). The Acquisition, the entering into of the Second Amended and Restated Credit Agreement and the offering of the Notes are collectively referred to herein as the "Transactions." In connection with the offer and sale of the Securities (the "OFFERING"), the Company has prepared a preliminary offering memorandum, dated June 24, 2005 (as amended or supplemented at the date thereof, including any and all exhibits thereto and any information incorporated by reference therein, the "PRELIMINARY MEMORANDUM"), and a final offering memorandum, dated June 30, 2005 (as amended or supplemented at the Execution Time, including any and all exhibits thereto and any information incorporated by reference therein, the "FINAL MEMORANDUM"). Each of the Preliminary Memorandum and the Final Memorandum sets forth certain information concerning the Company, the Guarantors, and the Securities. The Company hereby confirms that it has authorized the use of the Preliminary Memorandum and the Final Memorandum, and any amendment or supplement thereto, in connection with the offer and sale of the Securities by the Initial Purchasers. Unless stated to the contrary, any references herein to the terms "amend", "amendment" or "supplement" with respect to the Final Memorandum shall be deemed to refer to and include any information filed under the Exchange Act subsequent to the Execution Time that is incorporated by reference therein. 1. Representations, Warranties and Agreements of the Company and the Guarantors. The Company and the Guarantors, jointly and severally, represent and warrant to each Initial Purchaser as set forth below in this Section 1. (a) The Preliminary Memorandum, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the Execution Time and on the Closing Date, the Final Memorandum did not and will not (and any amendment or supplement thereto, at the date thereof and on the Closing Date, will not) contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Guarantors make no representation or warranty as to the information contained in or omitted from the Preliminary Memorandum or the Final Memorandum, or any amendment or supplement thereto, in reliance upon and in conformity 2 with information furnished in writing to the Company by or on behalf of the Initial Purchasers through the Representative specifically for inclusion therein. (b) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 4 and their compliance with the agreements set forth therein, none of the Company, the Guarantors, any of their respective Affiliates, or any person acting on its or their behalf has, directly or indirectly, made offers or sales of any security, or solicited offers to buy any security under circumstances that would require the registration of the Securities under the Act. (c) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 4 and their compliance with the agreements set forth therein, none of the Company, the Guarantors, any of their respective Affiliates, or any person acting on its or their behalf has offered or sold the Securities by means of any general solicitation or general advertising (within the meaning of Rule 502(c) under the Act) or engaged in any directed selling efforts within the meaning of Rule 902 under the Act with respect to the Securities, and the Company, the Guarantors and any person acting on its or their behalf have complied with and will implement the offering restrictions within the meaning of such Rule 902. (d) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Act. (e) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 4 and their compliance with the agreements set forth therein, no registration under the Act of the Securities is required for the offer and sale of the Securities to or by the Initial Purchasers in the manner contemplated herein and in the Final Memorandum. (f) None of the Company, the Guarantors or any of its or their respective subsidiaries has paid or agreed to pay to any person any compensation for soliciting another to purchase the Securities (except as contemplated by this Agreement). (g) None of the Company, the Guarantors or any of its or their respective subsidiaries has, directly or indirectly, taken any action designed to cause or which has constituted or which might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (h) Each of the Company, the Guarantors and its or their respective subsidiaries has been duly incorporated and is validly existing as a corporation, limited liability company or partnership in good standing under the laws of its jurisdiction of organization, is duly qualified to own or lease, as the case may be, and to operate its properties and to conduct its business as described in the Final Memorandum and is duly qualified to do business as a foreign corporation, limited liability company or partnership and is in good standing under the laws of each jurisdiction in which its ownership or lease of property or the conduct of its business requires such qualification, except such failures to qualify as are not, either individually or in the aggregate, material to the Company, the Guarantors or any of its or their respective subsidiaries, taken as a whole, affecting the management, condition, financial or otherwise, stockholders' 3 equity, results of operations, business or prospects of the Company and its subsidiaries, taken as a whole. (i) None of the Company, the Guarantors or any of its or their respective subsidiaries (i) is in violation of its charter or by-laws, (ii) is in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant, condition or other obligation contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, except for such violations or defaults that (a) could not reasonably be expected to have a material adverse effect on the performance of this Agreement, the Indenture, the Registration Rights Agreement or the Related Documents, or the consummation of any of the transactions contemplated hereby and thereby or (b) could not reasonably be expected to have material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (clauses (a) and (b) collectively, a "Material Adverse Effect"), or (iii) is in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain or maintain any license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business, except for such violations or defaults that do not have a Material Adverse Effect. (j) The Company has an authorized capitalization as set forth in the Final Memorandum. All of the issued shares of capital stock of the Company and the Guarantors have been duly authorized and validly issued and are fully paid and non-assessable; and all of the issued shares of capital stock of each subsidiary of the Company are owned directly or indirectly by the Company or the Guarantors, free and clear of all liens, encumbrances, equities or claims, other than liens, encumbrances, equities or claims under or permitted by the New Senior Secured Credit Facilities. (k) Each of the Company and the Guarantors has all requisite corporate, limited liability company or partnership power and authority to enter into this Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors. (l) The Indenture has been duly authorized by the Company and each of the Guarantors and, assuming due authorization, execution and delivery thereof by the Trustee, when executed and delivered by the Company and each of the Guarantors, will constitute a legal, valid and binding instrument enforceable against the Company and each of the Guarantors in accordance with its terms (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, preference or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity). (m) The Notes have been duly authorized by the Company and the Guarantees have been duly authorized by the Guarantors and when duly executed by the Company and each of the Guarantors and authenticated by the Trustee in accordance with the provisions of the Indenture and delivered to, and paid for, by the Initial Purchasers in accordance with the terms of this Agreement, the Notes and the Guarantees will constitute legal, valid, 4 binding and enforceable obligations of the Company and each of the Guarantors, respectively, entitled to the benefits of the Indenture (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, preference or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity). (n) The Exchange Notes have been duly authorized by the Company and the Exchange Guarantees have been duly authorized by the Guarantors and when executed and authenticated in accordance with the provisions of the Indenture and issued and delivered to the holders of the Securities in exchange therefor as contemplated by the Registration Rights Agreement and the Indenture, will have been duly executed and delivered by the Company and the Guarantors and will constitute legal, valid and binding obligations of the Company and the Guarantors, entitled to the benefits of the Indenture (subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance, preference or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity). (o) The Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, assuming due authorization, execution and delivery thereof by the Initial Purchasers, when executed and delivered by the Company and each of the Guarantors, will constitute a legal, valid, binding and enforceable instrument of the Company and each of the Guarantors (subject, as to the enforcement of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, preference or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity), provided that no representation is made with respect to Section 5 thereof. (p) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, in the Indenture or in the Registration Rights Agreement, except such as may be required under the blue sky laws of any jurisdiction in which the Securities are offered and sold and, in the case of the Registration Rights Agreement, such as will be obtained under the Act and the Trust Indenture Act. (q) None of the execution, delivery and performance of this Agreement, the Indenture, the Registration Rights Agreement, the Related Documents, the issuance and sale of the Securities, or the consummation of any of the transactions contemplated hereby or thereby, or the performance by the Company or any Guarantors of its obligations hereunder or thereunder (i) will conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company, the Guarantors or any of its or their respective subsidiaries is a party or by which the Company, the Guarantors or any of its or their respective subsidiaries is bound or to which any of the property or assets of the Company, the Guarantors or any of its or their respective subsidiaries is subject, except for such conflicts, breaches, violations or defaults that do not have a Material Adverse Effect or for which a waiver or consent has been obtained, (ii) will result in any violation of the provisions of the charter or by-laws of the Company, the Guarantors or any of its or their respective subsidiaries or (iii) will violate any applicable statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company, the Guarantors or any of its or their respective subsidiaries or any 5 of their properties or assets, except for such conflicts, breaches, violations or defaults that do not have a Material Adverse Effect. (r) The historical financial statements of the Company (including the related notes and supporting schedules) included in or incorporated by reference in the Final Memorandum present fairly in all material respects the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (s) The historical financial statements of Ramsay Youth Services, Inc. ("RAMSAY") (including the related notes and supporting schedules) incorporated by reference in the Final Memorandum present fairly in all material respects the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (t) The historical financial statements of Northern Healthcare Associates and subsidiaries ("NORTHERN HEALTHCARE") (including the related notes and supporting schedules) incorporated by reference in the Final Memorandum present fairly in all material respects the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (u) The historical financial statements of Ardent Behavioral (including the related notes and supporting schedules) included in the Final Memorandum present fairly in all material respects the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (v) The selected financial data set forth under the caption "Selected Consolidated Financial and Operating Data" in the Final Memorandum fairly present in all material respects, on the basis stated in the Final Memorandum, the information included therein; the pro forma financial statements included in the Final Memorandum include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial statements included in the Final Memorandum, the pro forma financial statements included in the Final Memorandum comply as to form with the applicable accounting requirements of Regulation S-X under the Act and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. (w) The other financial data, operating data and statistical information and data included in or incorporated by reference in the Final Memorandum is presented fairly in all material respects and, to the extent derived therefrom, has been prepared on a basis consistent with such financial statements and the books and records of the Company and its subsidiaries. 6 (x) Ernst & Young LLP, who has certified certain historical financial statements of the Company and Ardent Behavioral, whose reports are included or incorporated by reference in the Final Memorandum and who has delivered (a) the initial letters referred to in Section 6(d)(i) hereof and (b) the bring-down letters referred to in Section 6(e)(i) hereof, is an independent registered public accounting firm as required by the Act during the periods covered by the financial statements on which it reported that were or are incorporated by reference in the Final Memorandum. (y) Deloitte & Touche LLP, who has certified certain historical financial statements of Ramsay, whose report is incorporated by reference in the Final Memorandum, is an independent registered public accounting firm as required by the Act during the periods covered by the financial statements on which it reported that were or are incorporated by reference in the Final Memorandum. (z) Selznick & Company, LLP, who has certified certain historical financial statements of Northern Healthcare, whose report is incorporated by reference in the Final Memorandum and who has delivered (a) the initial letter referred to in Section 6(d)(ii) hereof, and (b) the bring-down letter referred to in Section 6(e)(ii) hereof, are independent public accountants as required by the Act during the periods covered by the financial statements on which it reported that were or are incorporated by reference in the Final Memorandum. (aa) Crowe Chizek and Company LLC, who has certified certain historical financial statements of Brentwood, are independent public accountants as required by the Act during the periods covered by the financial statements on which it reported that were or are incorporated by reference in the Final Memorandum. (bb) Each of the Company and the Guarantors (i) makes and keeps accurate books and records and (ii) maintains internal accounting controls that provide reasonable assurance that (A) transactions are executed in accordance with management's authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its assets, (C) access to its assets is permitted only in accordance with management's authorization and (D) the reported accountability for its assets is compared with existing assets at reasonable intervals. (cc) There are no legal or governmental proceedings pending to which the Company, the Guarantors or any of its or their respective subsidiaries is a party or of which any property or assets of the Company, the Guarantors or any of its or their respective subsidiaries is the subject that, if determined adversely to the Company, the Guarantors or any of its or their respective subsidiaries, would reasonably be likely to have a Material Adverse Effect, and to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (dd) The Company, the Guarantors or each of their respective subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses necessary for the conduct of their respective businesses and have no reason to believe that the conduct of their respective businesses will conflict with, and have not received any notice of any claim of conflict with, any such rights of others, except for such conflicts that do not or would not have a Material Adverse Effect. 7 (ee) The Company, the Guarantors or each of their respective subsidiaries have good and marketable title to all real property and good title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described or incorporated by reference in the Final Memorandum (exclusive of any amendment or supplement thereto) and such as do not materially affect the value of the property of the Company, the Guarantors or any of its or their respective subsidiaries taken as a whole and do not materially interfere with the use made and proposed to be made of such property by the Company, the Guarantors or any of its or their respective subsidiaries; and all real property and buildings held under lease by the Company, the Guarantors or any of its or their respective subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company, the Guarantors or any of its or their respective subsidiaries. (ff) There are no stamp or other issuance or transfer taxes or duties or other similar fees or charges required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company and the Guarantors of the Securities. (gg) No subsidiary of the Company or any of the Guarantors is currently prohibited, directly or indirectly, from paying any dividends to the Company or the Guarantors, from making any other distribution on such subsidiary's capital stock, from repaying to the Company or the Guarantors any loans or advances to such subsidiary from the Company or the Guarantors or from transferring any of such subsidiary's property or assets to the Company or the Guarantors or any other subsidiary of the Company or the Guarantors, except as described in or contemplated in the Final Memorandum (exclusive of any amendment or supplement thereto). (hh) The Company and the Guarantors and its or their respective subsidiaries possess all licenses, certificates, permits and other authorizations issued by the appropriate U.S. federal, state or non-U.S. regulatory authorities necessary to conduct their respective businesses, and neither the Company, the Guarantors nor any of its or their respective subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in the Final Memorandum (exclusive of any amendment or supplement thereto). (ii) The Company, the Guarantors and its and their respective subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (jj) Each of the Company, the Guarantors or its or their respective subsidiaries has filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and has paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company, the Guarantors or any of its or their respective subsidiaries 8 that has had (nor does the Company, the Guarantors or any of its or their respective subsidiaries have any knowledge of any tax deficiency that, if determined adversely to the Company, the Guarantors or any of its or their respective subsidiaries, might have) a Material Adverse Effect. (kk) The Company, the Guarantors and each of their subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is customary for companies engaged in similar businesses in similar industries. (ll) No labor disturbance by the employees of the Company, the Guarantors or any of its or their respective subsidiaries exists or, to the knowledge of the Company, the Guarantors or any of its or their respective subsidiaries, is imminent that could be expected to have a Material Adverse Effect. (mm) Each of the Company and the Guarantors is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Company, the Guarantors or any of its or their respective subsidiaries would have any liability; neither the Company, the Guarantors or any of its or their respective subsidiaries has incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to the termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "pension plan" for which the Company, the Guarantors or any of its or their respective subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification. (nn) Neither the Company or any of the Guarantors has taken any action or omitted to take any action (such as issuing any press release relating to any Securities without an appropriate legend) which may result in the loss by any of the Initial Purchasers of the ability to rely on any stabilization safe harbor provided by the Financial Services Authority under the Financial Services and Markets Act 2000 (the "FSMA"). The Company and each of the Guarantors have been informed of the guidance relating to stabilization provided by the Financial Services Authority, in particular in Section MAR 2 Annex 2G of the Financial Services Handbook. (oo) Set forth on Exhibit A hereto is a list of each employee pension or benefit plan with respect to which the Company or any corporation considered an affiliate of the Company within the meaning of Section 407(d)(7) of ERISA is a party in interest or disqualified person. (pp) Neither the Company, the Guarantors or any of its or their respective subsidiaries, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company, the Guarantors or any of its or their respective subsidiaries, has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any 9 provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (qq) Except for such matters as would not, individually or in the aggregate, either result in a Material Adverse Effect or require disclosure in the Final Memorandum, the Company, the Guarantors and its or their respective subsidiaries (or, to the knowledge of the Company, any of their predecessors in interest) (1) are conducting and have conducted their businesses, operations and facilities in compliance with Environmental Law (as defined below); (2) possess, and are in compliance with, any and all permits, licenses or registrations required under Environmental Law ("ENVIRONMENTAL PERMITS"); (3) will not require material expenditures to maintain such compliance with Environmental Law or their Environmental Permits or to remediate, clean up, abate or remove any Hazardous Substance (as defined below); and (4) are not subject to any pending or, to the best knowledge of the Company, the Guarantors or any of its or their respective subsidiaries, threatened claim or other legal proceeding under any Environmental Laws against the Company, the Guarantors or any of its or their respective subsidiaries, and have not been named as a "potentially responsible party" under or pursuant to any Environmental Law. As used in this paragraph, "Environmental Law" means any and all applicable federal, state, local and foreign laws, ordinances, regulations and common law, or any administrative or judicial order, consent, decree or judgment thereof, relating to pollution or the protection of human health or the environment, including, without limitation, those related to (i) emissions, discharges, releases or threatened releases of, or exposure to, Hazardous Substances, (ii) the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances, or (iii) the investigation, remediation or cleanup of any Hazardous Substances. As used in this paragraph, "Hazardous Substances" means pollutants, contaminants or hazardous, dangerous, toxic, biohazardous or infectious substances, materials or wastes or any other chemical substance regulated under Environmental Laws. (rr) Except as set forth or incorporated by reference in the Final Memorandum (exclusive of any amendment or supplement thereto), neither the Company, the Guarantors or any of its or their respective subsidiaries nor, to the knowledge of the Company, any other person who has a direct or indirect ownership or control interest in the Company, the Guarantors or any of its or their respective subsidiaries or who is an officer, director, agent or managing employee of the Company or any of its subsidiaries (1) has engaged in any activities which are prohibited, or are cause for criminal or civil penalties and/or mandatory or permissive exclusion from Medicare or Medicaid, under Section 1320a-7, 1320a-7a, 1320a-7b, or 1395nn of Title 42 of the United States Code, the federal TRICARE statute, the Federal False Claims Act 31 U.S.C. Section 3729-3733, or the regulations promulgated pursuant to such statutes or regulations or related state or local statutes or by generally recognized professional standards of care or conduct, except for such activities as would not, individually or in the aggregate, result in a Material Adverse Effect; (2) has had a civil monetary penalty assessed against it under Section 1128A of the Social Security Act ("SSA"); (3) is currently excluded from participation under the Medicare program or a Federal Health Care Program (as that term is defined in SSA Section 1128(B)(f)); or (4) has been convicted (as that term is defined in 42 C.F.R. Section 1001.2) of any of the categories of offenses described in SSA Section 1128(a) and (b)(1), (2) and (3). (ss) None of the Company, the Guarantors or any of their respective subsidiaries is, or after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Final Memorandum will be required to register as an "investment company" as defined in the Investment Company Act of 1940, as amended. 10 (tt) The minute books and records of the Company relating to proceedings of its shareholders, board of directors and committees of its board of directors made available to Weil, Gotshal & Manges LLP, counsel for the Initial Purchasers, are the original minute books and records or are true, correct and complete copies thereof, with respect to all proceedings of said shareholders, board of directors and committees since December 14, 2004, through the date hereof. In the event that definitive minutes have not been prepared with respect to any proceedings of such shareholders, board of directors or committees, the Company has provided Weil, Gotshal & Manges LLP with originals or true, correct and complete copies of draft minutes or written agendas relating thereto, which drafts and agendas, if any, reflect all events that occurred in connection with such proceedings. (uu) The statements contained or incorporated by reference in (i) the Final Memorandum under the captions "Description of the Notes", "Description of Other Indebtedness", "Notice to Investors", "Plan of Distribution" and "Material U.S. Federal Income Tax Considerations" and (ii) Item 1 of Part I of the Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2004 under the caption "Regulation and Other Factors", in each case as amended and supplemented by statements contained in the Final Memorandum or documents incorporated by reference in the Final Memorandum (exclusive in each case of any amendment or supplement thereto) insofar as it purports to constitute a summary of the terms of the Securities, legal matters, agreements, documents or proceedings discussed therein and the statements incorporated by reference from the Company's proxy statement filed with the Commission on April 22, 2005 under the heading "Certain Relationships and Related Transactions" are accurate in all material aspects. (vv) The Company is subject to and in full compliance with the reporting requirements of Section 13 or 15(d) of the Exchange Act. All reports filed by the Company with the Commission pursuant to Section 13 or 15(d) of the Exchange Act comply as to form in all material respects with the Exchange Act. (ww) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), which (i) are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported and is made known to the Company's principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated for effectiveness as of the end of the last fiscal quarter; and (iii) are effective in all material respects to perform the functions for which they were established. (xx) Based on the evaluation of its disclosure controls and procedures, the Company is not aware of (i) any significant deficiency in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls. (yy) Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that 11 could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. (zz) There is and has been no failure on the part of the Company and any of the Company's directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the "Sarbanes Oxley Act"), including Section 402 related to loans and Section 302 and 906 related to certifications. (aaa) Except as disclosed or incorporated by reference in the Final Memorandum (exclusive of any amendment or supplement thereto), there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Initial Purchaser for a brokerage commission, finder's fee or other like payment in connection with this offering. (bbb) The market-related and industry data included or incorporated by reference in the Final Memorandum are based upon estimates by the Company derived from sources that the Company believes to be reliable and accurate. Any certificate signed by any officer of the Company or any Guarantor and delivered to the Representative or counsel for the Initial Purchasers in connection with the Offering shall be deemed a representation and warranty by the Company or such Guarantor, as to matters covered thereby, to each Initial Purchaser. 2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company and the Guarantors agree to sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and not jointly, to purchase from the Company and the Guarantors, at a purchase price of 98.0% of the principal amount thereof, plus accrued interest, if any, from July 6, 2005 to the Closing Date, the principal amount of Notes set forth opposite such Initial Purchaser's name in Schedule I hereto. The Company acknowledges and agrees that the Initial Purchasers are acting solely in the capacity of an arm's length contractual counterparty to the Company with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the Offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally, no Initial Purchaser is advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and the Initial Purchasers shall have no responsibility or liability to the Company with respect hereto. Any review by the Initial Purchasers of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Initial Purchasers and shall not be on behalf of the Company. 3. Delivery and Payment. Delivery of and payment for the Securities shall be made at 10:00 A.M., New York City time, on July 6, 2005, or at such time on such later date not more than three Business Days after the foregoing date as the Representative shall designate, which date and time may be postponed by agreement between the Representative and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the 12 Securities being herein called the "CLOSING DATE"). Delivery of the Securities shall be made to the Representative for the respective accounts of the several Initial Purchasers against payment by the several Initial Purchasers through the Representative of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to the account specified by the Company. The Securities shall be delivered in such names, forms and amounts as the Initial Purchasers shall specify and delivery shall be made through the facilities of The Depository Trust Company unless the Representative shall otherwise instruct. 4. Offering by the Initial Purchasers. (a) Each Initial Purchaser acknowledges that the Securities have not been and will not be registered under the Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Act. (b) Each Initial Purchaser, severally and not jointly, represents and warrants to and agrees with the Company and the Guarantors that: (i) it has not offered or sold, and will not offer or sell, any Securities within the United States or to, or for the account or benefit of, U.S. persons (x) as part of their distribution at any time or (y) otherwise until 40 days after the later of the commencement of the offering and the date of closing of the offering except: (A) to those it reasonably believes to be "qualified institutional buyers" (as defined in Rule 144A under the Act) or (B) in accordance with Rule 903 of Regulation S; (ii) neither it nor any person acting on its behalf has made or will make offers or sales of the Securities in the United States by means of any form of general solicitation or general advertising (within the meaning of Regulation D) in the United States; (iii) in connection with each sale pursuant to Section 4(b)(i)(A), it has taken or will take reasonable steps to ensure that the purchaser of such Securities is aware that such sale is being made in reliance on Rule 144A; (iv) neither it, nor any of its Affiliates nor any person acting on its or their behalf has engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities; (v) it has not entered and will not enter into any contractual arrangement with any distributor (within the meaning of Regulation S) with respect to the distribution of the Securities, except with its affiliates or with the prior written consent of the Company; (vi) it and its Affiliates have complied and will comply with the offering restrictions requirement of Regulation S; 13 (vii) at or prior to the confirmation of sale of Securities (other than a sale of Securities pursuant to Section 4(b)(i)(A) of this Agreement), it shall have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it during the distribution compliance period (within the meaning of Regulation S) a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the "Act") and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the date of closing of the offering, except in either case in accordance with Regulation S or Rule 144A under the Act. Terms used in this paragraph have the meanings given to them by Regulation S." (viii) it has not offered or sold and, prior to the date six months after the date of issuance of the Securities, will not offer or sell any Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or as agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ix) it has complied and will comply with all applicable provisions of the FSMA) with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom; (x) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Securities, in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (xi) it is an "accredited investor" (as defined in Rule 501(a) of Regulation D). 5. Agreements. The Company and the Guarantors agree as set forth below, jointly and severally, with the Initial Purchasers that: (a) The Company and the Guarantors will furnish to each Initial Purchaser and to counsel for the Initial Purchasers, without charge, during the period referred to in paragraph (c) below, as many copies of the Final Memorandum and any amendments and supplements thereto as they may reasonably request. (b) The Company and the Guarantors will not amend or supplement the Final Memorandum, other than by filing documents under the Exchange Act that are incorporated by reference therein, without the prior written consent of the Representative; provided, however, that, prior to the completion of the distribution of the Securities by the Initial Purchasers (as determined by the Initial Purchasers), the Company will not file any document under the Exchange Act that is incorporated by reference in the Final Memorandum unless, prior to such proposed filing, the Company has furnished the Representative with a copy of such document for 14 their review and the Representative have not reasonably objected to the filing of such document. The Company will promptly advise the Representative when any document filed under the Exchange Act that is incorporated by reference in the Final Memorandum shall have been filed with the Commission. (c) If at any time prior to the completion of the sale of the Securities by the Initial Purchasers (as determined by the Representative), any event occurs as a result of which the Final Memorandum, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it should be necessary to amend or supplement the Final Memorandum to comply with applicable law, the Company and the Guarantors will promptly (i) notify the Representative of any such event; (ii) subject to the requirements of paragraph (b) of this Section 5, prepare an amendment or supplement that will correct such statement or omission or effect such compliance; and (iii) supply any supplemented or amended Final Memorandum to the several Initial Purchasers and counsel for the Initial Purchasers without charge in such quantities as they may reasonably request. (d) The Company and the Guarantors will arrange, if necessary, for the qualification of the Securities for sale by the Initial Purchasers under the laws of such jurisdictions as the Representative may designate and will maintain such qualifications in effect so long as required for the sale of the Securities; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the Offering, in any jurisdiction where it is not now so subject. The Company will promptly advise the Representative of the receipt by the Company or any Guarantor of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. (e) During the period of two years after the Closing Date, the Company and the Guarantors will not, and will not permit any of its Affiliates to, resell any Securities that have been acquired by any of them. (f) None of the Company, the Guarantors, their respective Affiliates or any person acting on its or their behalf will, directly or indirectly, make offers or sales of any security, or solicit offers to buy any security, under circumstances that would require the registration of the Securities. (g) None of the Company, the Guarantors, their respective Affiliates or any person acting on its or their behalf will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities in the United States and none of the Company, the Guarantors, their respective Affiliates, or any person acting on its or their behalf will engage in any directed selling efforts with respect to the Securities, and each of them will comply with the offering restrictions requirement of Regulation S. Terms used in this paragraph have the meanings given to them by Regulation S. (h) So long as any of the Securities are "restricted securities" within the meaning of Rule 144(a)(3) under the Act, the Company and the Guarantors will, during any 15 period in which they are not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, provide to each holder of such restricted securities and to each prospective purchaser (as designated by such holder) of such restricted securities, upon the request of such holder or prospective purchaser, any information required to be provided by Rule 144A(d)(4) under the Act. Such information will not, at the date thereof, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. This covenant is intended to be for the benefit of the holders, and the prospective purchasers designated by such holders, from time to time of such restricted securities. (i) The Company and the Guarantors will cooperate with the Representative and use their respective best efforts to have the Securities designated as PORTAL eligible securities in accordance with the rules and regulations of the NASD and to permit the Securities to be eligible for clearance and settlement through The Depository Trust Company. (j) The Company and the Guarantors will use the net proceeds received from the sale of the Securities pursuant to this Agreement in the manner specified in the Final Memorandum. (k) None of the Company, any of the Guarantors or any of its or their respective subsidiaries will for a period of 90 days following the Execution Time, without the prior written consent of Citigroup, directly or indirectly, offer, sell, contract to sell, pledge, otherwise dispose of, or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any Affiliate of the Company or any person in privity with the Company or any Affiliate of the Company, directly or indirectly, or announce the offering of, any debt securities issued or guaranteed by the Company (other than the Securities). (l) None of the Company, any of the Guarantors or any of its or their respective subsidiaries will take, directly or indirectly, any action designed to or which has constituted or which might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (m) The Company and the Guarantors agree to pay the costs and expenses relating to the following matters: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the issuance of the Securities; (ii) all expenses in connection with the preparation, printing and filing of the Preliminary Memorandum and Final Memorandum and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Initial Purchasers and dealers; (iii) the cost of printing or producing this Agreement, the Indenture, the Registration Rights Agreement, the Securities, the Blue Sky Memoranda, closing documents (including, without limitation, any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iv) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 5(d) hereof, including, without limitation, the fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the Blue Sky surveys; (v) any fees charged by securities rating services for rating the Securities; (vi) the cost related to the preparation, printing, authentication, issuance, and 16 delivery of certificates for the Securities; (vii) any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (viii) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (ix) any cost incurred in connection with the designation of the Securities for trading in the PORTAL; (x) investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Notes, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, but shall not be responsible for any of the cost of any aircraft chartered in connection with the road show; (xi) filing and fees and expenses in connection with the filing of a registration statement with the Commission under the Act and the qualification of an indenture under the Trust Indenture Act, pursuant to the Registration Rights Agreement; and (xii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. (n) The Company and the Guarantors will, for a period of twelve months following the Execution Time, furnish to the Representative (i) all reports or other communications (financial or other) generally made available to stockholders, and deliver such reports and communications to the Representative as soon as they are available, unless such documents are furnished to or filed with the Commission or any securities exchange on which any class of securities of the Company is listed and generally made available to the public and (ii) such additional information concerning the business and financial condition of the Company as the Representative may from time to time reasonably request (such statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to stockholders). (o) The Company and the Guarantors will use their reasonable best efforts to comply with all applicable securities and other laws, rules and regulations, including, without limitation, provisions of the Sarbanes-Oxley Act and rules and regulations of the NASD, and use its reasonable best efforts to cause the respective directors and officers of the Company and each of the Guarantors, in their capacities as such, to comply with such laws, rules and regulations. (p) The Company and the Guarantors will not take any action or omit to take any action (such as issuing any press release relating to any Securities without an appropriate legend) which may result in the loss by any of the Initial Purchases of the ability to rely on any stabilization safe harbor provided by the Financial Services Authority under the FSMA. 6. Conditions of Initial Purchasers' Obligations. The obligations of the Initial Purchasers hereunder are subject to the accuracy of the representations and warranties of the Company and the Guarantors contained herein at the Execution Time and the Closing Date or in certificates of any officer of the Company or the Guarantors delivered pursuant to the provisions hereof, to the performance by the Company and the Guarantors of their covenants and other obligations hereunder, and to the following further conditions: (a) Waller Lansden Dortch & Davis PLLC shall have furnished to the Representative its written opinion, or letter or letters, as counsel to the Company and the Guarantors, addressed to the Representative and dated the Closing Date, substantially in the form of Exhibit B hereto. 17 (b) The Representative shall have received from Weil, Gotshal & Manges LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Indenture, the Registration Rights Agreement, the Final Memorandum and other related matters as the Representative may reasonably require, and the Company and the Guarantors shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (c) At time of the execution of this Agreement, the Representative shall have received from: (i) Ernst & Young LLP, two letters, one with respect to the financial information of the Company and the other with respect to the financial information of Ardent Behavioral, included or incorporated by reference in the Final Memorandum, each in form and substance satisfactory to the Representative, addressed to the Representative and dated the date hereof (A) confirming that it is an independent registered public accounting firm within the meaning of the Act and is in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (B) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given or incorporated by reference in the Final Memorandum, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to Representative in connection with registered public offering; (ii) Selznick & Company, LLP, a letter with respect to the financial information of Northern Healthcare, in form and substance satisfactory to the Representative, addressed to the Initial Purchasers and dated the date hereof (A) confirming that they are independent public accountants with respect to Northern Healthcare, (B) stating, as of the date hereof, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to Initial Purchasers in connection with registered public offering; (d) With respect to the letters referred to in the immediately preceding paragraph and delivered to the Representative concurrently with the execution of this Agreement (each, an "INITIAL LETTER"), the Representative shall have received a letter (each, a "BRING-DOWN LETTER") addressed to the Representative and dated as of the Closing Date: (i) Ernst & Young LLP, with respect to the financial information of the Company and Ardent Behavioral, incorporated by reference in the Final Memorandum, (A) confirming that it is an independent registered public accounting firm within the meaning of the Act and is in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (B) stating, as of the date of each of the bring-down letters (or, with respect to matters involving changes or developments since the respective dates as of which specified financial 18 information is given or incorporated by reference in the Final Memorandum, as of a date not more than five days prior to the date of each of the bring-down letters), the conclusions and findings of such firm with respect to the financial information and other matters covered by each of the initial letters and (C) confirming in all material respects the conclusions and findings set forth in each of the initial letters; (ii) Selznick & Company, LLP, with respect to the financial information of Northern Healthcare, incorporated by reference in the Final Memorandum, (A) confirming that they are independent public accountants with respect to Northern Healthcare, (B) stating, as of the date of the bring-down letter, the conclusions and findings of such firm with respect to the financial information and other matters covered by the initial letter; and (e) The Company shall have furnished to the Representative a certificate, dated the Closing Date, signed by the Chief Executive Officer and Chief Accounting Officer of the Company stating, as applicable, that: (i) The representations, warranties and agreements of the Company and the Guarantors contained herein, as applicable, are true and correct in all material respects (except with respect to representations, warranties and agreements already qualified by materiality) as if made on and as of the Closing Date (other than to the extent any such representation or warranty is made expressly to a certain date), and the Company and the Guarantors have performed all covenants and agreements and satisfied all conditions (after giving effect to all materiality qualifiers herein) on their part to be performed or satisfied hereunder, to the extent a party hereto, at or prior to the Closing Date; and the conditions set forth in Section 6 have been fulfilled; and (ii) They have carefully examined the Final Memorandum (exclusive of any amendment or supplement thereto) and, in their opinion (A) as of the Closing Date, the Final Memorandum did not include, and as of its date and the Closing Date the Final Memorandum did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary, in the light of the circumstances under which made, to make the statements therein not misleading, and (B) since the date of the Final Memorandum, no event has occurred which should have been set forth in an amendment to the Final Memorandum or supplement to the Final Memorandum. (f) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Final Memorandum (exclusive of any amendment or supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (c) or (d) of this Section 6; or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Final Memorandum (exclusive of any amendment or supplement thereto), the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed with 19 the offering, sale or delivery of the Securities as contemplated in the Final Memorandum (exclusive of any amendment or supplement thereto). (g) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the Company's securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change. (h) Prior to the Closing Date, the Company shall have furnished to the Representative such further information, certificates and documents as the Representative may reasonably request. (i) The Representative shall have received a certificate from the Company, at the time of the execution of this Agreement and on the Closing Date, signed by the Chief Accounting Officer of the Company, in respect of the financial data contained in footnote (1) to the Unaudited Pro Forma Condensed Combined Income Statement for the twelve months ended March 31, 2005 and the year ended December 31, 2004 relating to Brentwood, Northern Healthcare and each of the hospitals consolidated under the column "Non-Significant Acquisitions" stating, as applicable, that: (1) The financial statements attached to the certificate are , in fact, a true and accurate copy of the financial data for Brentwood, Northern Healthcare and each of the hospitals consolidated under the column "Non-Significant Acquisitions" used to create the data contained in footnote (1) to the Unaudited Pro Forma Condensed Combined Income Statement for the twelve months ended March 31, 2005 and the year ended December 31, 2004 (the "FINANCIAL STATEMENTS"); (2) As members of management of Brentwood, Northern Healthcare and each of the hospitals consolidated under the column "Non-Significant Acquisitions," he is responsible for the fair presentation of its financial statements and he believes the statements of financial position and results of operations are fairly presented in conformity with accounting principles generally accepted in the United States applied on a basis consistent with that of the preceding periods; (3) There are no unadjusted audit differences identified during the current audit and pertaining to the period presented; (4) No plans or intentions exist that may materially affect the carrying value or classification of assets and liabilities; (5) There are no material transactions that have not been properly recorded in the accounting records underlying the Financial Statements; (6) There are no material weaknesses in internal control, including any for which he believes the cost of corrective actions exceeds the benefits and there have been no significant changes in internal control since December 31, 2004; 20 (7) No events or transactions have occurred since December 31, 2004 or are pending that would have a material effect on the financial statements at that date or for the period then ended, or that are of such significance in relation to the affairs of Brentwood, Northern Healthcare or each of the hospitals consolidated under the column "Non-Significant Acquisitions" to require mention in a note to the Financial Statements or the pro forma financial statements contained in the Final Memorandum in order to make them not misleading regarding the respective financial position, results of operations, or cash flows of Brentwood, Northern Healthcare or each of the hospitals consolidated under the column "Non-Significant Acquisitions." (j) Prior to the Closing Date, the Acquisition shall have been consummated. (k) Concurrently with the closing of the Offering, the Bridge Facility shall be fully repaid and all obligations of the Company and the guarantors thereunder shall be satisfied in full and discharged. If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representative and counsel for the Initial Purchasers, this Agreement and all obligations of the Initial Purchasers hereunder may be cancelled at, or at any time prior to, the Closing Date by the Representative. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing. 7. Reimbursement of Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company or any Guarantor to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Initial Purchasers, the Company will reimburse the Initial Purchasers severally through Citigroup on demand for all expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 8. Indemnification and Contribution. (a) Each of the Company and the Guarantors agrees, jointly and severally, to indemnify and hold harmless each Initial Purchaser, the directors, officers, employees, Affiliates and agents of each Initial Purchaser and each person who controls any Initial Purchaser within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Memorandum, the Final Memorandum or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company and the 21 Guarantors will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Preliminary Memorandum, the Final Memorandum, or in any amendment thereof or supplement thereto, in reliance upon and in conformity with written information furnished to the Company or the Guarantors by or on behalf of any Initial Purchaser through the Representative specifically for inclusion therein. This indemnity agreement will be in addition to any liability that the Company or the Guarantors may otherwise have. (b) Each Initial Purchaser severally, and not jointly, agrees to indemnify and hold harmless the Company, each of the Guarantors, each of their respective directors and officers, and each person who controls the Company or the Guarantors within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company and the Guarantors to each Initial Purchaser, but only with reference to written information relating to such Initial Purchaser furnished to the Company and the Guarantors by or on behalf of such Initial Purchaser through the Representative specifically for inclusion in the Preliminary Memorandum, the Final Memorandum or in any amendment or supplement thereto. This indemnity agreement will be in addition to any liability that any Initial Purchaser may otherwise have. The Company and the Guarantors acknowledge that (i) the statements set forth in the last paragraph of the cover page regarding delivery of the Securities and (ii), under the heading "Plan of Distribution", (x) the first sentence of the third paragraph, the fifth paragraph related to proposed resales of the Securities by the Initial Purchasers and the eighth paragraph, (y) the fifth and sixth sentences of the ninth paragraph related to market-making activities and (z) the tenth paragraph related to stabilization, syndicate covering transactions and penalty bids, in each case in the Preliminary Memorandum and the Final Memorandum constitute the only information furnished in writing by or on behalf of the Initial Purchasers for inclusion in the Preliminary Memorandum, the Final Memorandum or in any amendment or supplement thereto. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be 22 legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle, compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include any statement as to or any admission of fault, culpability or failure to act by or on behalf of any indemnified party. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Guarantors, jointly and severally, and the Initial Purchasers severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, damage, liability or action) (collectively "LOSSES") to which the Company, each of the Guarantors and one or more of the Initial Purchasers may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and by the Initial Purchasers on the other from the offering of the Securities; provided, however, that in no case shall any Initial Purchaser be responsible for any amount in excess of the purchase discount or commission applicable to the Securities purchased by such Initial Purchaser hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Guarantors, jointly and severally, and the Initial Purchasers severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. Benefits received by the Company and the Guarantors shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Company, and benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company and the Guarantors, on the one hand, or the Initial Purchasers, on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers' obligation to contribute pursuant to this Section 8 shall be several in proportion to their respective purchase obligations hereunder and not joint. For purposes of this Section 8, each person who controls an Initial Purchaser within the meaning of either the Act or the Exchange Act and each director, officer, employee, Affiliate and agent of an Initial Purchaser shall have the same rights to contribution as 23 such Initial Purchaser, and each person who controls the Company or any of the Guarantors within the meaning of either the Act or the Exchange Act and each officer and director of the Company or any of the Guarantors shall have the same rights to contribution as the Company or any of the Guarantors, subject in each case to the applicable terms and conditions of this paragraph (d). 9. Default by an Initial Purchaser. If any one or more Initial Purchasers shall fail to purchase and pay for any of the Securities agreed to be purchased by such Initial Purchaser hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Initial Purchasers shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Initial Purchasers) the Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase; provided, however, that in the event that the aggregate principal amount of Securities which the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Initial Purchasers shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Initial Purchasers do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Initial Purchaser or the Company. In the event of a default by any Initial Purchaser as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representative shall determine in order that the required changes in the Final Memorandum or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Initial Purchaser of its liability, if any, to the Company or any nondefaulting Initial Purchaser for damages occasioned by its default hereunder. 10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representative, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in the Company's Common Stock shall have been suspended by the Commission or the Nasdaq National Market or trading in securities generally on the New York Stock Exchange or the Nasdaq National Market shall have been suspended or limited or minimum prices shall have been established on either the New York Stock Exchange or the Nasdaq National Market; (ii) a banking moratorium shall have been declared either by U.S. federal or New York State authorities; or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representative, impractical or inadvisable to proceed with the Offering or delivery of the Securities as contemplated by the Final Memorandum (exclusive of any amendment or supplement thereto). 11. Additional Guarantors. On the Closing Date, the Company will cause each of the Additional Guarantors to become a party to this Agreement by causing each Additional Guarantor to execute a Guarantor Joinder Agreement in the form attached hereto as Exhibit C and delivering an executed copy of such Guarantor Joinder Agreement to the Initial Purchasers on the Closing Date, whereupon each of the Additional Guarantors shall become jointly and severally liable for all of the Company's obligations under Section 8 hereof; it being acknowledged and agreed that the obligations of the Additional Guarantors under Section 8 24 hereof shall not be effective unless and until the Additional Guarantors execute and deliver a Guarantor Joinder Agreement. 12. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company, the Guarantors or their respective officers and of the Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Initial Purchasers or the Company, the Guarantors or any of the indemnified persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement. 13. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representative, will be mailed, delivered or telefaxed to the Citigroup General Counsel (fax no.: (212) 816-7912) and confirmed to Citigroup at 388 Greenwich Street, New York, New York 10013, Attention: General Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to it at 840 Crescent Centre Drive, Suite 460 Franklin, Tennessee 37067, Attention: Brent Turner (Fax: (615) 312-5711), with copy to Waller Lansden Dortch & Davis, PLLC, 511 Union Street, Suite 2700, Nashville, Tennessee 37219, Attention: Christopher L. Howard, Esq. (Fax: (615) 244-6804). 14. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the indemnified persons referred to in Section 8 hereof and their respective successors, and, except as expressly set forth in Section 5(h) hereof, no other person will have any right or obligation hereunder. 15. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. The parties hereto each hereby waive any right to trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement. 16. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. 17. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof. 18. Definitions. The terms that follow, when used in this Agreement, shall have the meanings indicated. "Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Affiliate" shall have the meaning specified in Rule 501(b) of Regulation D. "Ardent Behavioral" shall mean Ardent Health Services, Inc. and its subsidiaries that operate the behavioral health care business of Ardent Health Services, Inc. 25 "Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in The City of New York. "Citigroup" shall mean Citigroup Global Markets Inc. "Commission" shall mean the Securities and Exchange Commission. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. "Execution Time" shall mean, the date and time that this Agreement is executed and delivered by the parties hereto. "NASD" shall mean the National Association of Securities Dealers, Inc. "PORTAL" shall mean the Private Offerings, Resales and Trading through Automated Linkages system of the NASD. "Regulation D" shall mean Regulation D under the Act. "Regulation S" shall mean Regulation S under the Act. "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder. 26 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company, the Guarantors and the several Initial Purchasers. Very truly yours, PSYCHIATRIC SOLUTIONS, INC. By: /s/ Steven T. Davidson -------------------------------- Name: Steven T. Davidson Title: Chief Development Officer SIGNATURE PAGE TO THE PURCHASE AGREEMENT PSYCHIATRIC SOLUTIONS HOSPITALS, INC. INFOSCRIBER CORPORATION COLLABORATIVE CARE CORPORATION PSYCHIATRIC SOLUTIONS OF ALABAMA, INC. PSYCHIATRIC SOLUTIONS OF FLORIDA, INC. PSYCHIATRIC SOLUTIONS OF TENNESSEE, INC. SOLUTIONS CENTER OF LITTLE ROCK, INC. PSYCHIATRIC SOLUTIONS OF NORTH CAROLINA, INC. PSI COMMUNITY MENTAL HEALTH AGENCY MANAGEMENT, INC. PSYCHIATRIC MANAGEMENT RESOURCES, INC. PSI-EAP, INC. SUNSTONE BEHAVIORAL HEALTH, INC. THE COUNSELING CENTER OF MIDDLE TENNESSEE, INC. PSI CEDAR SPRINGS HOSPITAL, INC. PSYCHIATRIC SOLUTIONS OF OKLAHOMA, INC. AERIES HEALTHCARE CORPORATION AERIES HEALTHCARE OF ILLINOIS, INC. PSI HOSPITALS, INC. PSYCHIATRIC PRACTICE MANAGEMENT OF ARKANSAS, INC. BOUNTIFUL PSYCHIATRIC HOSPITAL, INC. EAST CAROLINA PSYCHIATRIC SERVICES CORPORATION GREAT PLAINS HOSPITAL, INC. GULF COAST TREATMENT CENTER, INC. HAVENWYCK HOSPITAL INC. H.C. CORPORATION HSA HILL CREST CORPORATION HSA OF OKLAHOMA, INC. MICHIGAN PSYCHIATRIC SERVICES, INC. RAMSAY MANAGED CARE, INC. RAMSAY TREATMENT SERVICES, INC. PREMIER BEHAVIORAL SOLUTIONS, INC. PREMIER BEHAVIORAL SOLUTIONS OF ALABAMA, INC. PREMIER BEHAVIORAL SOLUTIONS OF FLORIDA, INC. RAMSAY YOUTH SERVICES OF GEORGIA, INC. SIGNATURE PAGE TO THE PURCHASE AGREEMENT RAMSAY YOUTH SERVICES PUERTO RICO, INC. PREMIER BEHAVIORAL SOLUTIONS OF SOUTH CAROLINA, INC. RHCI SAN ANTONIO, INC. TRANSITIONAL CARE VENTURES, INC. TRANSITIONAL CARE VENTURES (TEXAS), INC. BRENTWOOD ACQUISITION, INC. BRENTWOOD ACQUISITION-SHREVEPORT, INC. CANYON RIDGE HOSPITAL, INC. LAURELWOOD CENTER, INC. PEAK BEHAVIORAL HEALTH SERVICES, INC. PSI PRIDE INSTITUTE, INC. PSI SUMMIT HOSPITAL, INC. PSYCHIATRIC SOLUTIONS OF ARIZONA, INC. PSYCHIATRIC SOLUTIONS OF LEESBURG, INC. PSYCHIATRIC SOLUTIONS OF VIRGINIA, INC. TUSCON HEALTH SYSTEMS, INC. WHISPER RIDGE OF STAUNTON, INC. FORT LAUDERDALE HOSPITAL, INC. By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President THERAPEUTIC SCHOOL SERVICES, LLC BY: PSYCHIATRIC SOLUTIONS OF OKLAHOMA, INC., AS SOLE MEMBER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President PSI TEXAS HOSPITALS, LLC BY: PSYCHIATRIC SOLUTIONS HOSPITALS, INC., AS SOLE MEMBER 29 By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President H.C. PARTNERSHIP BY: H.C. CORPORATION, AS GENERAL PARTNER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President BY: HSA HILL CREST CORPORATION, AS GENERAL PARTNER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President MILLWOOD HOSPITAL, L.P. TEXAS CYPRESS CREEK HOSPITAL, L.P. TEXAS WEST OAKS HOSPITAL, L.P. NEURO INSTITUTE OF AUSTIN, L.P. TEXAS LAUREL RIDGE HOSPITAL, L.P. TEXAS OAKS PSYCHIATRIC HOSPITAL, L.P. TEXAS SAN MARCOS TREATMENT CENTER, L.P. BY: PSI TEXAS HOSPITALS, LLC, AS GENERAL PARTNER BY: PSYCHIATRIC SOLUTIONS HOSPITAL, INC., AS SOLE MEMBER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President 30 PSI CROSSINGS, LLC BY: LAURELWOOD CENTER, INC., AS SOLE MEMBER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President PALMETTO BEHAVIORAL HEALTH SYSTEM, L.L.C. BY: PSYCHIATRIC SOLUTIONS OF SOUTH CAROLINA, INC., AS SOLE MEMBER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President PALMETTO LOWCOUNTRY BEHAVIORAL HEALTH, L.L.C. PALMETTO PEE DEE BEHAVIORAL HEALTH, L.L.C. BY: PALMETTO BEHAVIORAL HEALTH SYSTEM, L.L.C., AS SOLE MEMBER BY: PSYCHIATRIC SOLUTIONS OF SOUTH CAROLINA, INC., AS SOLE MEMBER By: /s/ Joey A. Jacobs ------------------------------------------------- Name: Joey A. Jacobs Title: President 31 The foregoing Agreement is hereby confirmed and accepted as of the date first above written. CITIGROUP GLOBAL MARKETS INC. By: /s/ Ross A. Mac Intyre --------------------------- Name: Ross A. Mac Intyre Title: Managing Director For itself and the other several Initial Purchasers named in Schedule I to the foregoing Agreement. SIGNATURE PAGE TO THE PURCHASE AGREEMENT