##### 








---



##### 



TABLE OF CONTENTS
 PageARTICLE I DEFINITIONS
    
    
    1ARTICLE II PURCHASE AND SALE; CLOSING
    
    
    72.1
    
    Sale of the ABS Shares
    
    
    72.2
    
    Consideration
    
    
    82.3
    
    Closing
    
    
    82.4
    
    Deliveries of Seller at Closing
    
    
    82.5
    
    Deliveries of Purchaser at Closing
    
    
    82.6
    
    Additional Acts
    
    
    9ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
    
    
    93.1
    
    Organization of Seller
    
    
    93.2
    
    Organization and Capitalization of ABS
    
    
    93.3
    
    Organization and Capitalization of the ABS Subsidiaries
    
    
    93.4
    
    Authorization
    
    
    103.5
    
    No Conflicting Agreements; Consents
    
    
    113.6
    
    Financial Statements
    
    
    113.7
    
    Absence of Undisclosed Liabilities
    
    
    123.8
    
    Absence of Certain Changes
    
    
    123.9
    
    Legal Proceedings, etc
    
    
    133.10
    
    Contracts; No Defaults
    
    
    133.11
    
    Title to Property
    
    
    133.12
    
    Employees; Labor Matters; Employee Benefit Plans; ERISA
    
    
    153.13
    
    Bank Accounts
    
    
    163.14
    
    Taxes
    
    
    173.15
    
    Insurance
    
    
    193.16
    
    Intellectual Property
    
    
    193.17
    
    Compliance with Laws
    
    
    193.18
    
    Environmental Matters
    
    
    193.19
    
    Books and Records
    
    
    203.20
    
    No Material Adverse Change
    
    
    203.21
    
    Brokers
    
    
    203.22
    
    HIPAA Matters
    
    
    203.23
    
    Medical Waste
    
    
    213.24
    
    Certificates of Need
    
    
    213.25
    
    Medicare Participation; Accreditation
    
    
    213.26
    
    Compliance Program
    
    
    213.27
    
    Regulatory Compliance
    
    
    223.28
    
    Medical Staff Matters
    
    
    233.29
    
    Third Party Payor Cost Reports
    
    
    233.30
    
    Reimbursement
    
    
    233.31
    
    Statutory Funds
    
    
    243.32
    
    Controlled Substances
    
    
    243.33
    
    Statements and Other Documents Not Misleading
    
    
    24ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER
    
    
    244.1
    
    Organization
    
    
    244.2
    
    Corporate Authorization
    
    
    244.3
    
    No Conflicting Agreements; Consents
    
    
    244.4
    
    Legal Proceedings, etc
    
    
    254.5
    
    Financial Capability
    
    
    25
 i




---



##### 



Page4.6
    
    Brokers
    
    
    254.7
    
    Investment Representations
    
    
    254.8
    
    Statements and Other Documents Not Misleading
    
    
    25ARTICLE V COVENANTS OF SELLER
    
    
    265.1
    
    Regulatory Approvals; Consents
    
    
    265.2
    
    Conduct Prior to the Closing
    
    
    265.3
    
    Employee Matters
    
    
    275.4
    
    Access by Purchaser
    
    
    275.5
    
    Financial Statements and Reports
    
    
    275.6
    
    Closing Conditions
    
    
    285.7
    
    Transfer of Assets
    
    
    285.8
    
    Encumbrances
    
    
    285.9
    
    Condition of Assets
    
    
    285.10
    
    Intercompany Accounts
    
    
    285.11
    
    Exclusivity
    
    
    285.12
    
    Resignations
    
    
    295.13
    
    Company Plans
    
    
    295.14
    
    Restrictive Covenants Agreement
    
    
    295.15
    
    Standstill
    
    
    295.16
    
    Third Party Payor Cost Reports
    
    
    295.17
    
    Qualifacts Agreement
    
    
    295.18
    
    Indebtedness
    
    
    295.19
    
    Texas Assets and Operations
    
    
    29ARTICLE VI COVENANTS OF PURCHASER; CERTAIN ADDITIONAL COVENANTS OF THE PARTIES
    
    
    306.1
    
    Notice of Certain Occurrences
    
    
    306.2
    
    Regulatory Approvals
    
    
    306.3
    
    Public Announcements
    
    
    306.4
    
    Closing Conditions
    
    
    306.5
    
    Employee Matters
    
    
    306.6
    
    WARN Act Compliance; COBRA
    
    
    316.7
    
    Tax Matters
    
    
    316.8
    
    Tax Indemnification
    
    
    336.9
    
    Consents Not Obtained by Closing
    
    
    346.10
    
    Consultative Process
    
    
    346.11
    
    Confidentiality
    
    
    346.12
    
    Books and Records
    
    
    346.13
    
    Section 338 Election
    
    
    346.14
    
    Seller Minimum Net Worth; Restrictions on Seller Transfers
    
    
    356.15
    
    Shared Services Agreement; Agreements between Acquired Entities and RX Innovations
    
    
    356.16
    
    Corporate Office Lease
    
    
    356.17
    
    Cash Management
    
    
    356.18
    
    Severance Payments
    
    
    35ARTICLE VII CONDITIONS TO OBLIGATIONS OF PURCHASER
    
    
    357.1
    
    Representations and Warranties
    
    
    367.2
    
    Compliance with Agreement
    
    
    367.3
    
    Closing Certificates
    
    
    367.4
    
    Secretarys Certificates
    
    
    367.5
    
    Opinion of Counsel
    
    
    367.6
    
    Consents, Authorizations, Etc
    
    
    367.7
    
    No Action or Proceeding
    
    
    367.8
    
    Constituent Documents
    
    
    37
 ii




---



##### 



Page7.9
    
    Resignation of Boards of Directors and Officers
    
    
    377.10
    
    Good Standing Certificates
    
    
    377.11
    
    Title Policies, Surveys and Environmental Site Assessments
    
    
    377.12
    
    Termination of Guarantees
    
    
    377.13
    
    Restrictive Covenants Agreements
    
    
    377.14
    
    FIRPTA
    
    
    377.15
    
    Joinder
    
    
    377.16
    
    Shared Services Agreement
    
    
    377.17
    
    Qualifacts Agreement
    
    
    387.18
    
    No Material Adverse Change
    
    
    387.19
    
    Absence of Liens
    
    
    387.20
    
    2005 Audited Financials
    
    
    387.21
    
    Waiver of Conditions
    
    
    38ARTICLE VIII CONDITIONS TO OBLIGATIONS OF SELLER
    
    
    388.1
    
    Representations and Warranties
    
    
    388.2
    
    Compliance with Agreement
    
    
    388.3
    
    Closing Certificates
    
    
    388.4
    
    Secretarys Certificate
    
    
    388.5
    
    Opinion of Counsel
    
    
    398.6
    
    Consents, Authorizations, Etc
    
    
    398.7
    
    No Action or Proceeding
    
    
    398.8
    
    Good Standing Certificate
    
    
    398.9
    
    Restricted Stock Agreement
    
    
    398.10
    
    Waiver of Conditions
    
    
    39ARTICLE IX INDEMNIFICATION
    
    
    399.1
    
    Indemnification by Seller
    
    
    399.2
    
    Indemnification by Purchaser
    
    
    399.3
    
    Claims Procedures
    
    
    409.4
    
    Limitations on Claims
    
    
    409.5
    
    Miscellaneous
    
    
    41ARTICLE X TERMINATION
    
    
    4110.1
    
    Termination
    
    
    4110.2
    
    Effect of Termination
    
    
    41ARTICLE XI NOTICES
    
    
    4211.1
    
    Notices
    
    
    42ARTICLE XII MISCELLANEOUS
    
    
    4312.1
    
    Fees and Expenses
    
    
    4312.2
    
    Entire Agreement
    
    
    4312.3
    
    Waiver
    
    
    4312.4
    
    Amendment
    
    
    4312.5
    
    Counterparts; Facsimile Signatures
    
    
    4412.6
    
    No Third Party Beneficiary
    
    
    4412.7
    
    GOVERNING LAW, CONSTRUCTION; WAIVER OF JURY TRIAL
    
    
    4412.8
    
    Binding Effect
    
    
    4412.9
    
    No Assignment
    
    
    4412.10
    
    Headings; Gender, Etc
    
    
    4412.11
    
    Access to Information
    
    
    4412.12
    
    Severability; Invalid Provisions
    
    
    4412.13
    
    Cooperation
    
    
    4512.14
    
    Further Assurance Clause
    
    
    4512.15
    
    Documents to be Provided to Purchaser
    
    
    45
 iii




---



##### 



STOCK PURCHASE AGREEMENT
 Agreement Seller Purchaser
 RECITALS:
     ARTICLE I
DEFINITIONS
  ABS
 ABS Shares Section 3.2(b)
 ABS Subsidiaries Section 3.3(a)
 ABS Subsidiary Shares Section
3.3(d)
 Acquired Entities
 Acquisition Proposal
 Affiliate control
 Affiliated Group
 Agreement
 Applications Section 3.24
 Balance Sheet Date




---



##### 



Books and Records
 Break-up Fee Section 10.2(d)
 Business Associate Agreements Section
3.22(c)
 Business Day
 Certificate of Need Section 3.24
 Claim Section 9.3
 Closing
 Closing Date Section 2.3
 Closing Statement Section 2.2
 COBRA Section 3.12(i)
 Code
 Company
 Company Financial Statements Section
3.6(a)
 Company Intellectual Property Section
3.16
 Company Permits Section 3.17
 Company Plans employee benefit plan
 Confidentiality Agreement
 Constituent Documents
 2




---



##### 



Contract
 Controlled Group Member
 Corporate Office Lease
 Court Order
 Covered Entities Section 3.22(a)
 Credit Facilities
 Damages
 Destruction Notice Section 6.12
 Effective Time Section 2.3
 Election Forms Section 6.13(b)
 Environmental Claim
 Environmental Laws
 3




---



##### 



et seq et seq et seq et seq et seq
 ERISA
 ERISA Affiliate
 Excluded Assets Section 2.1
 Excluded Liabilities Section 2.1
 Excluded Subsidiaries ABS LINCS TX
 Exemption Certificate Section 3.24
 Federal Privacy Regulations Section
3.22(a)
 Federal Transaction Regulations Section
3.22(a)
 FTC Section 7.7
 GAAP
 Governmental Authority
 Hazardous Substances hazardous substance toxic substance toxic pollutant
 HIPAA Section 3.22(a)
 HSR Act
 Indebtedness
 Indemnifying Party Section 9.3
 Indemnitee Section 9.3
 Intellectual Property Section 3.16
 4




---



##### 



IRS
 JCAHO Section 3.25
 Knowledge Schedule 1.1 Schedule 1.2
 Laws
 Leases Section 3.11(c)
 Liability Threshold Section 9.4(a)
 Lien
 Liquidated Damages
 Material Adverse Effect
 Material Contracts Section 3.10
 Materials of Environmental Concern
 Medical Waste Medical
Waste
 Medical Waste Law et seq.
 5




---



##### 



et seq.
 Multiemployer Plan multiemployer plan
 MWTA et seq
 OSHA et seq
 PCBs Section 3.18(f)
 Permits
 Permitted Liens
 Person
 Pre-Closing Period Section
6.7(a)(i)
 Pre-Closing Period Tax Returns Section
6.7(a)(i)
 Programs Section 3.25
 Provider Agreements Section 3.25
 Provider Numbers Section 3.25
 Purchase Price Section 2.2
 Purchaser
 Purchaser Indemnitee Section 9.1
 Purchaser Material Breach Section
10.1(c)
 Qualifacts Agreement
 Real Property Section 3.11(b)
 6




---



##### 



Restrictive Covenants Agreements Section 5.14
 Section 338 Election Section
6.13(a)
 Securities Act
 Seller
 Seller Indemnitee Section 9.2
 Seller Material Breach Section
10.1(c)
 Shared Services Agreement
 Straddle Period Section 6.7(a)(ii)
 Straddle Period Tax Returns Section
6.7(a)(ii)
 Tax Taxes
 Tax Indemnification Agreement Section
3.14(e)
 Tax Proceeding Section 6.7(c)(i)
 Tax Return
 Termination Expenses Section
10.2(c)
 Transfer Taxes Section 6.7(b)
 2005 Audited Financial Statements Section 5.5(a)
 WARN Act
 ARTICLE II
PURCHASE AND SALE; CLOSING
 Sale of the ABS Shares
 7




---



##### 



Section 2.1 Excluded Assets Excluded Liabilities Schedule 2.1
 Consideration Purchase Price Section
2.2 Section 2.3 Schedule 2.2 Schedule 2.2 Closing Statement
 Closing Closing Date Effective
Time
 Deliveries of Seller at Closing
    Deliveries of Purchaser at Closing
 Section 2.2 Schedule 2.2
  8




---



##### 



Additional Acts
 ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
  Organization of Seller
 Organization and Capitalization of ABS
 Schedule 3.2(a)
 ABS Shares
   Organization and Capitalization of the ABS Subsidiaries
 Schedule 3.3(a) ABS Subsidiaries
 9




---



##### 



Schedule 3.3(b) Schedule 3.3(b)
 Schedule 3.3(c)
 ABS Subsidiary Shares
  Authorization
   10




---



##### 



No Conflicting Agreements; Consents Schedule
3.5
   Section 5.1 Section 6.2
  Financial Statements
 Schedule 3.6 Company Financial
Statements Schedule 3.6
  11




---



##### 



Absence of Undisclosed Liabilities Schedule 3.7
 Absence of Certain Changes Schedule 3.8
      Schedule 3.12(i)
   12




---



##### 



Legal Proceedings, etc. Schedule 3.9 Schedule 3.9
 Contracts; No Defaults Schedule 3.10 Material Contracts Schedule 3.10
 Title to Property
   13




---



##### 



Real Property Schedule 3.11(b)
 Schedule 3.11(c) Leases
   as-built
  Schedule
3.11(h)
 Schedule 3.11(i)
 14




---



##### 



Employees; Labor Matters; Employee Benefit Plans; ERISA
  Schedule 3.12(b)
  Schedule 3.12(d) reportable event prohibited transaction
 15




---



##### 



COBRA Schedule 3.12(i)
  Bank Accounts Schedule 3.13
 16




---



##### 



Taxes
 Schedule 3.14 reportable transaction
 Schedule 3.14 Schedule 3.14
 Schedule 3.14
  Schedule 3.14 Tax Indemnification Agreement
 Schedule 3.14
 17




---



##### 



Schedule 3.14 Schedule 3.14
 excess parachute
payments
    Schedule 3.14 Schedule 3.14
  Schedule 3.14
   18




---



##### 



Insurance Schedule 3.15
 Intellectual Property Schedule 3.16 Intellectual
Property Company Intellectual Property Schedule 3.16 Schedule 3.16 Schedule 3.16 Schedule 3.16 off the shelf
 Compliance with Laws Company Permits Schedule 3.17 Schedule 3.17
 Environmental Matters Schedule 3.18
     19




---



##### 



PCBs
 Books and Records
 No Material Adverse Change
 Brokers
 HIPAA Matters
 Covered Entities HIPAA Federal Privacy Regulations Federal Transaction Regulations
  Business Associate
Agreements
  20




---



##### 



Medical Waste
 Certificates of Need Schedule 3.24 Applications Schedule 3.24 Certificate of Need Exemption Certificate
 Medicare Participation; Accreditation Programs Provider Agreements Schedule 3.25 Provider Numbers JCAHO Schedule 3.25
 Compliance Program
 21




---



##### 



compliance program
 Regulatory Compliance Schedule 3.27(a)
    Schedule 3.27(d)
 22




---



##### 



Medical Staff Matters
   Third Party Payor Cost Reports Schedule 3.29 Schedule 3.29 Schedule 3.29
 Reimbursement
 23




---



##### 



Statutory Funds
 Controlled Substances
 Statements and Other Documents Not Misleading
 ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
  Organization
 Corporate Authorization
   No Conflicting Agreements; Consents Schedule 4.3
 Purchaser or one of its Affiliates Acquired Entities
 24




---



##### 



Section 5.1 Section 6.2
 Legal Proceedings, etc
 Financial Capability
 Brokers
 Investment Representations
     Statements and Other Documents Not Misleading
 25




---



##### 



ARTICLE V
COVENANTS OF SELLER
 Regulatory Approvals; Consents Schedule 5.1 Schedule 5.1 Schedule 3.5 Section 6.2 Section 6.2
 Conduct Prior to the Closing Schedule 5.2
    Section
2.1
  26




---



##### 



Section 5.10
    Schedule 6.5
 Employee Matters Schedule
5.3 Schedule 6.5 Section 5.3
 Access by Purchaser
 Financial Statements and Reports
 2005 Audited Financial Statements
 27




---



##### 



Schedule 3.6
   Closing Conditions
 Transfer of Assets Section 2.1
 Encumbrances
 Condition of Assets
 Intercompany Accounts Schedule 5.10 Schedule 5.10
 Exclusivity
 28




---



##### 



Section 2.1
 Resignations
 Company Plans
 Restrictive Covenants Agreement Schedule 5.14 Exhibit 5.14 Restrictive
Covenants Agreement
 Standstill Section 5.15 Section 5.15
 Third Party Payor Cost Reports
 Qualifacts Agreement
 Indebtedness
 Texas Assets and Operations
 29




---



##### 



ARTICLE VI
COVENANTS OF PURCHASER; CERTAIN ADDITIONAL
COVENANTS OF THE PARTIES
 Notice of Certain Occurrences Section 6.1
 Regulatory Approvals Schedule
6.2 Schedule 6.2 Section 5.1 Section 5.1
 Public Announcements
 Closing Conditions
 Employee Matters
 30




---



##### 



WARN Act Compliance; COBRA
 Tax Matters
 Preparation and Filing of Tax Returns; Payment of Taxes
 Pre-Closing Period Pre-Closing Period Tax Returns
 Straddle
Period Straddle Period Tax Returns Section 6.7(a)
  31




---



##### 



Transfer Taxes Transfer Taxes
 Post-Closing Audits and Other Procedures
 Tax Proceeding Section 6.7 Section 6.8
  Section 6.7(c)(ii)
 32




---



##### 



Section
6.8
 Section 6.7 Section
6.8
 Cooperation
 Termination of Tax Indemnification Agreements
 Consolidated Return Principles
 Survival Section 6.7 Section 6.8
 Tax Indemnification Section 6.7 Section 6.7 Section
3.14 Section 2.1 Section 6.8
 33




---



##### 



Section 6.8 Section 6.8
 Consents Not Obtained by Closing Section 5.1 Section 7.6 Section 8.6 Schedule 3.5
 Consultative Process Section 6.10
 Confidentiality
 Books and Records Destruction Notice
 Section 338 Election
 Section 338 Election
 Election Forms
  34




---



##### 



Seller Minimum Net Worth; Restrictions on Seller Transfers Section 9.3 Organic Transaction Section 6.14
 Shared Services Agreement; Agreements between Acquired Entities and RX
Innovations
   Corporate Office Lease
 Cash Management
 Severance Payments
 35




---



##### 



ARTICLE VII
CONDITIONS TO OBLIGATIONS OF PURCHASER
  Representations and Warranties
 Compliance with Agreement
 Closing Certificates Sections 7.1 and 7.2
 Secretarys Certificates
    Opinion of Counsel Exhibit
7.5
 Consents, Authorizations, Etc Schedules 5.1 and 6.2 Schedule 3.5
 No Action or Proceeding FTC
 36




---



##### 



Constituent Documents
 Resignation of Boards of Directors and Officers Section 5.12
 Good Standing Certificates
 Title Policies, Surveys, and Environmental Site Assessments
 Schedule 3.11(b) Schedule 3.11(c)
  as built Schedule 3.11(b) Schedule
3.11(c)
 Schedule 3.11(b) Schedule 3.11(c)
 Termination of Guarantees Schedule
7.12
 Restrictive Covenants Agreements Schedule
5.14
 FIRPTA
 Joinder Exhibit 7.15 Exhibit 7.15 Section 6.14 Section 6.14
 Shared Services Agreement
 37




---



##### 



Qualifacts
 No Material Adverse Change
 Absence of Liens
 2005 Audited Financials
 Waiver of Conditions
 ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
  Representations and Warranties
 Compliance with Agreement
 Closing Certificates Sections 8.1 and 8.2
 Secretarys Certificate
   38




---



##### 



Opinion of Counsel Exhibit 8.5
 Consents, Authorizations, Etc Schedules 5.1 and 6.2 Schedule
3.5
 No Action or Proceeding
 Good Standing Certificate
 Restricted Stock Agreement Exhibit
8.9
 Waiver of Conditions
 ARTICLE IX
INDEMNIFICATION
 Indemnification by Seller Purchaser Indemnitee Section 3.14 Sections 6.7 and 6.8 Schedule 9.1 Section 3.14 Section 6.7 Section 6.8
 Indemnification by Purchaser Seller Indemnitee
 39




---



##### 



Claims Procedures Indemnitee Indemnifying Party Claim
 Limitations on Claims
 Liability Thresholds Section
9.4(a) Liability Threshold Section 9.1(a), 9.1(b), 9.1(d), 9.2(a), 9.2(b) or 9.2(c) Sections 6.8, 9.1(c), 9.1(e)
and 9.2(d)
 Subrogation
 Survival of Representations and Warranties; Limitation of Time to Bring Claims Sections 3.1, 3.2, 3.3, 3.4, 3.11(a), 3.11(b), 4.1 and 4.2 Sections 3.12, 3.14, 3.18, 3.22, 3.26, 3.27,
 40




---



##### 



3.28, 3.29, 3.30 and 3.32 Section 9.4(c)
 Miscellaneous
   Article IX
 ARTICLE X
TERMINATION
 Termination
   Section 7.7 Seller Material
Breach
 Section 10.1(f)
 Section 8.7 Purchaser
Material Breach
   41




---



##### 



Effect of Termination
 Section 10.1 Sections 5.15, 6.11, 10.2, 12.1, 12.2, 12.5, 12.6, 12.7, 12.8, 12.9, 12.10
and 12.12
 Sections 10.2 and 12.1
 Section
10.1(e) Termination Expenses Sections
10.1(c) or 10.1(g)
 Section 10.1(d) Break-up Fee Section
10.2(d)
 Section 10.1(c)
 Section
10.1(c) Section 10.1(e) Section 10.2(c)
 ARTICLE XI
NOTICES
 Notices
  
 42




---



##### 



Section 11.1
 ARTICLE XII
MISCELLANEOUS
 Fees and Expenses
 Entire Agreement
 Waiver
 Amendment
 43




---



##### 



Counterparts; Facsimile Signatures
 No Third Party Beneficiary
 GOVERNING LAW, CONSTRUCTION; WAIVER OF JURY TRIAL
 Binding Effect
 No Assignment provided however
 Headings; Gender, Etc. hereof herein hereby Article Section Schedule Exhibit
 Access to Information
 Severability; Invalid Provisions
 44




---



##### 



Cooperation
 Further Assurance Clause
 Documents to be Provided to Purchaser
 [The following page is the signature page.]
 45




---



##### 



PSYCHIATRIC SOLUTIONS, INC.By:
    
    /s/ Brent TurnerName:
    
    Brent TurnerTitle:
    
    Executive Vice President, Finance and AdministrationFHC HEALTH SYSTEMS, INC.By:
    
    /s/ Edward C. IrbyName:
    
    Edward C. IrbyTitle:
    
    Vice President
 46