Document:

EX-10.2

Exhibit 10.2

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

	 	 	 	 	 
	 	 	 	 	 
	IN RE: BEAZER HOMES USA, INC.
	 	)	 	 
	SECURITIES LITIGATION
	 	)	 	 
	 
	 	)	 	 
	 	 	 	 	 
	This Document Relates To:
	 	)	 	Master File No:
	 
	 	)	 	1:07-cv-725-CC
	ALL ACTIONS
	 	)	 	 
	 
	 	)	 	 
	 	 	 	 	 

STIPULATION AND AGREEMENT OF SETTLEMENT

     This Stipulation and Agreement of Settlement (the “Stipulation”) is submitted pursuant to Rule
23 of the Federal Rules of Civil Procedure. Subject to the approval of the Court, this Stipulation
is entered into among Lead Plaintiffs, Glickenhaus & Co. and Carpenters Pension Trust Fund for
Northern California, on behalf of themselves and the Class (as hereinafter defined) and (i)
Defendant Beazer Homes (USA), Inc. (“Beazer”), (ii) Individual Defendants Ian J. McCarthy
(“McCarthy”), James O’Leary (“O’Leary”); Michael T. Rand (“Rand”), and Michael H. Furlow (“Furlow”)
(Beazer and the Individual Defendants are collectively referred to hereinafter as the “Beazer
Defendants”), and (iii) Defendant Deloitte & Touche LLP (“Deloitte”) (Beazer, the Individual
Defendants and Deloitte are collectively referred to hereinafter as the “Defendants”), by and
through their respective counsel.

 

 

     WHEREAS:

     A. The above-captioned action was initially filed in this Court on or about March 29, 2007,
and is hereinafter referred to as the “Action”;

     B. This is a federal securities fraud class action, and is currently pending before Judge
Clarence Cooper in the United States District Court for the Northern District of Georgia. The
causes of action asserted against Defendants in this matter are founded, in whole or in part, on
Sections 10(b), 20(a), and 20(A) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule
10b-5 promulgated thereunder;

     C. Lead Plaintiffs, Glickenhaus & Co. (an institutional investment advisor firm) and
Carpenters Pension Trust Fund for Northern California (a fund providing retirement benefits for
members of the United Brotherhood of Carpenters and Joiners of America within the 46 Northern
California Counties), seek to represent a class of investors who purchased the securities of Beazer
at allegedly artificially inflated prices during the putative Class Period (January 27, 2005
through May 12, 2008);

     D. Defendant Beazer, a Delaware corporation, is a large Atlanta-based homebuilder that went
public in 1994. Beazer offered mortgage services through a wholly-owned mortgage origination
subsidiary (“Beazer Mortgage”) until February 2008;

- 2 -

 

     E. The Amended and Consolidated Class Action Complaint for Violation of the Federal Securities
Laws, dated June 27, 2008 (the “Complaint”), alleges that Lead Plaintiffs and other Class Members
purchased the common stock of Beazer during the Class Period at prices artificially inflated as a
result of the Defendants’ dissemination of materially false and misleading statements. The
Complaint asserts claims under Sections 10(b), 20(a), and 20(A) of the Securities Exchange Act of
1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder;

     F. The Defendants deny any liability in connection with the Action and the claims asserted by
Plaintiffs in the Complaint, and Deloitte specifically denies any wrongdoing or liability with
respect to each and all of the claims that were alleged or could have been alleged by Lead
Plaintiffs or Class Members, including, but not limited to, all contentions concerning Deloitte’s
conduct, as well as contentions that such conduct constitutes wrongdoing or gives rise to legal
liability or has caused damages to Lead Plaintiffs or Class Members. This Stipulation shall in no
event be construed or deemed to be evidence of or an admission or concession on the part of any
Defendant with respect to any claim or of any fault or liability or wrongdoing or damage
whatsoever, or of any infirmity in the defenses that the Defendants have asserted. The parties to
this Stipulation recognize, however, that the litigation has been filed by Plaintiffs and defended
by Defendants in good faith and with adequate basis in fact under Federal Rule of

- 3 -

 

Civil Procedure 11 and that the litigation is being voluntarily settled after advice of
counsel. This Stipulation shall not be construed or deemed to be a concession by any Plaintiff of
any infirmity in the claims asserted in the Action;

     G. Plaintiffs’ Co-Lead Counsel have conducted an investigation relating to the claims and the
underlying events and transactions alleged in the Complaint. Plaintiffs’ Co-Lead Counsel have
analyzed the evidence adduced during pretrial investigation and have researched the applicable law
with respect to the claims of Lead Plaintiffs and the Class against the Defendants and the
potential defenses thereto, and Plaintiffs have opposed Defendants’ motions to dismiss;

     H. With the assistance of retired Superior Court Judge Daniel Weinstein of JAMS acting as a
mediator, Lead Plaintiffs, by their counsel, have conducted discussions and arm’s length
negotiations with counsel for Defendants with respect to a compromise and settlement of the Action
with a view to settling the issues in dispute and achieving the best relief possible consistent
with the best interests of the Class; and

     I. Based upon their investigation as set forth above, Plaintiffs’ Co-Lead Counsel have
concluded that the terms and conditions of this Stipulation are fair, reasonable and adequate to
Lead Plaintiffs and the Class, and in their best interests, and have agreed to settle the claims
alleged in the Action pursuant to the terms and provisions of this Stipulation, after considering
(1) the substantial benefits that

- 4 -

 

Lead Plaintiffs and the members of the Class will receive from settlement of the Action, (2)
the attendant risks of litigation, and (3) the desirability of permitting the Settlement to be
consummated as provided by the terms of this Stipulation.

     NOW THEREFORE, without any admission or concession on the part of Lead Plaintiffs of any lack
of merit of the Action whatsoever, and without any admission or concession of any liability or
wrongdoing or lack of merit in the defenses whatsoever by Defendants, it is hereby STIPULATED AND
AGREED, by and among the parties to this Stipulation, through their respective attorneys, subject
to approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in
consideration of the benefits flowing to the parties hereto from the Settlement, that all Settled
Claims (as defined below) as against the Released Parties (as defined below) and all Settled
Defendants’ Claims (as defined below) shall be compromised, settled, released, and dismissed with
prejudice, upon and subject to the following terms and conditions:

CERTAIN DEFINITIONS

     1. As used in this Stipulation, the following terms shall have the following meanings:

          (a) “Authorized Claimant” means a Class Member who submits a timely and valid Proof of Claim
form to the Claims Administrator.

- 5 -

 

          (b) “Beazer Defendants” means Beazer and the Individual Defendants.

          (c) “Cash Settlement Amounts” means the sum of Twenty Nine Million Five Hundred and Fifty
Thousand Dollars ($29,550,000.00 US$) to be paid on behalf of the Beazer Defendants by their
directors’ and officers’ liability insurance carriers, and the sum of Nine Hundred and Fifty
Thousand Dollars ($950,000.00 US$) to be paid by Deloitte.

          (d) “Claims Administrator” means the firm of The Garden City Group, Inc., which shall
administer the Settlement.

          (e) “Class” means, for the purposes of this Settlement only, all persons or entities who
purchased the common stock of Beazer during the Class Period. Excluded from the Class are the
Defendants, members of the immediate families (parents, spouses, siblings, and children) of each of
the Individual Defendants, all directors, officers, parents, subsidiaries and affiliates of Beazer,
all members, partners, principals and affiliates of Deloitte, any person, firm, trust, corporation
or entity in which any Defendant during the Class Period had a controlling interest or which is
related to or affiliated with any of the Defendants, and the legal representatives, heirs,
successors in interest or assigns of any such excluded party. Also excluded from the Class are any
putative Class Members

- 6 -

 

who exclude themselves by filing a request for exclusion in accordance with the requirements
set forth in the Notice.

          (f) “Class Member” means a member of the Class.

          (g) “Class Period” means, for the purposes of this Settlement only, the period January 27,
2005 through and including May 12, 2008.

          (h) “Defendants” means Beazer, the Individual Defendants and Deloitte.

          (i) “Defendants’ Counsel” means the law firms of Cravath, Swaine & Moore LLP and Troutman
Sanders LLP for Defendants Beazer, McCarthy and O’Leary; Rogers and Hardin LLP for Defendant Rand;
Covington & Burling LLP and Hartman Simons Spielman & Wood LLP for Defendant Furlow; and Sutherland
Asbill & Brennan LLP for Deloitte.

          (j) “Effective Date” means the date upon which the Settlement contemplated by this Stipulation
shall become effective, as set forth in ¶ 25 below.

          (k) “Final,” with respect to the Order and Final Judgment, means: (a) if no appeal is filed,
the expiration date of the time for filing or noticing of any appeal from the Court’s Judgment
approving the Settlement substantially in the form of Exhibit B hereto, i.e. thirty (30) days after
entry of the Judgment; or (b) if there is an appeal, the date of final dismissal of any appeal from
the Judgment, or the final dismissal of any proceeding on certiorari to review the Judgment; or (c)

- 7 -

 

the date of final affirmance on an appeal of the Judgment, the expiration of the time to file
a petition for a writ of certiorari, or the denial of a writ of certiorari to review the Judgment,
and, if certiorari is granted, the date of final affirmance of the Judgment following review
pursuant to that grant. Any proceeding or order, or any appeal or petition for a writ of
certiorari pertaining solely to any plan of allocation and/or application for attorneys’ fees,
costs or expenses, shall not in any way delay or preclude the Judgment from becoming Final.

          (l) “Gross Settlement Fund” means the respective Defendants’ Cash Settlement Amounts, as
defined in paragraph 1(c), plus any income or interest earned thereon.

          (m) “Individual Defendants” means Ian J. McCarthy, James O’Leary, Michael T. Rand, and Michael
H. Furlow.

          (n) “Net Settlement Fund” has the meaning defined in ¶ 5 hereof.

          (o) “Notice” means the Notice of Pendency of Class Action and Proposed Settlement, Motion for
Attorneys’ Fees and Settlement Fairness Hearing, which is to be sent to members of the Class
substantially in the form attached hereto as Exhibit 1 to Exhibit A.

          (p) “Order and Final Judgment” means the proposed order to be entered approving the Settlement
substantially in the form attached hereto as Exhibit B.

- 8 -

 

          (q) “Order for Notice and Hearing” means the proposed order preliminarily approving the
Settlement and directing notice thereof to the Class substantially in the form attached hereto as
Exhibit A.

          (r) “Plaintiffs’ Counsel” means Plaintiffs’ Co-Lead Counsel and all other counsel representing
any Plaintiffs or Class Member in the Action.

          (s) “Plaintiffs’ Co-Lead Counsel” means the law firms of Bernstein Liebhard LLP, Chitwood
Harley Harnes LLP and Milberg LLP.

          (t) “Publication Notice” means the summary notice of proposed Settlement and hearing for
publication substantially in the form attached as Exhibit 3 to Exhibit A.

          (u) “Released Parties” means any and all of the Defendants; Beazer and any of its past,
present, and future direct or indirect parent companies, subsidiaries, subcontractors, divisions,
affiliates, predecessors, successors, partners, principals, members, managers, attorneys,
administrators, auditors, investment advisors, officers, directors, trusts, accountants, employees,
stockholders, owners, agents, subrogees, insurers, reinsurers, servants, representatives, heirs,
executors, personal representatives, legal representatives, transferees and assignees, and
successors in interest of assigns; Deloitte & Touche LLP, Deloitte LLP (formerly known as Deloitte
& Touche USA LLP), Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax
LLP,

- 9 -

 

Deloitte Services LP, and any of their past, present, and future direct or indirect parent
companies, subsidiaries, subcontractors, divisions, affiliates, predecessors, successors, partners,
principals, members, managers, attorneys, administrators, auditors, investment advisors, officers,
directors, trusts, accountants, employees, stockholders, owners, agents, subrogees, insurers,
reinsurers, servants, representatives, heirs, executors, personal representatives, legal
representatives, transferees and assignees, and successors in interest of assigns; the Individual
Defendants’ legal representatives, heirs, successors in interest, or assigns; and any person,
firm, trust, corporation, officer, director or other individual or entity in which any of the
foregoing persons or entities has a controlling interest or which is related to or affiliated with
any of them, and any and all persons natural or corporate in privity with them or acting in concert
with them or any of them. The Released Parties are express third-party beneficiaries of this
Stipulation and Agreement of Settlement.

          (v) “Settled Claims” means any and all claims, debts, suits, demands, rights or causes of
action or liabilities, dues, sums of money, accounts, bonds, bills, covenants, contracts,
controversies, agreements, promises, judgments, variances, executions, obligations, demands,
rights, liabilities, losses, fees, and costs of any kind, nature and/or description whatsoever
(including, but not limited to, any claims for damages, interest, attorneys’ fees, expert or
consulting fees, and

- 10 -

 

any other costs, expenses or liability whatsoever), whether based on federal, state, local,
statutory or common law or any other law, rule or regulation, whether fixed or contingent, accrued
or un-accrued, liquidated or un-liquidated, at law or in equity, matured or un-matured, suspected
or unsuspected, contingent or non-contingent, whether or not asserted, threatened, alleged or
litigated, at law, equity or otherwise, including without limitation, claims for contribution or
indemnification, or for costs, expenses (including, without limitation, amounts paid in settlement)
and attorneys’ fees, claims for negligence, fraud, breach of fiduciary duty, or violations of any
federal, state or local statutes, common law, rules or regulations, that now exist or heretofore
existed, whether class or individual in nature, including both known claims and Unknown Claims, (i)
that have been asserted in this Action by the Class Members or any of them against any of the
Released Parties, (ii) that could have been asserted in any forum by the Class Members, now or in
the future, or any of them against any of the Released Parties that relate to, or that in any way
arise out of, or are based upon, the allegations, transactions, facts, matters or occurrences,
acts, disclosures, statements, representations, omissions, or failures to act involved, set forth,
or referred to in the Complaint, and that relate to the purchase, sale or other disposition of
shares of the common stock of Beazer during the Class Period, or (iii) that relate to the purchase,
sale or other disposition of shares of the common stock of Beazer during

- 11 -

 

 the Class Period. “Settled Claims” does not mean or include the derivative claims asserted in
In re Beazer Homes USA, Inc. Derivative Litigation, Civil Action No. 1:07-CV-842-CC (N.D. Ga.), or
claims, if any, against the Released Parties arising under the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”).

          (w) “Settled Defendants’ Claims” means any and all claims, rights or causes of action or
liabilities whatsoever, whether based on federal, state, local, statutory or common law or any
other law, rule or regulation, including both known claims and Unknown Claims, that have been or
could have been asserted in the Action or any forum by the Defendants or any of them or the
successors and assigns of any of them against any of the Lead Plaintiffs, other Class Members or
their attorneys, which arise out of or relate in any way to the institution, prosecution, or
settlement of the Action (except for claims to enforce the Settlement).

          (x) “Settlement” means the settlement contemplated by this Stipulation.

          (y) “Unknown Claims” means any and all Settled Claims which any Lead Plaintiff or Class Member
does not know or suspect to exist in his, her or its favor at the time of the release of the
Released Parties, and any Settled Defendants’ Claims which any Defendant does not know or suspect
to exist in his,

- 12 -

 

her or its favor, which if known by him, her or it might have affected his, her or its
decision(s) with respect to the Settlement. With respect to any and all Settled Claims and Settled
Defendants’ Claims, the parties stipulate and agree that upon the Effective Date, the Lead
Plaintiffs and the Defendants shall expressly waive, and each Class Member shall be deemed to have
waived, and by operation of the Judgment shall have expressly waived, any and all provisions,
rights and benefits conferred by any law of any state or territory of the United States, or
principle of common law, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542,
which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

Lead Plaintiffs and Defendants acknowledge, and all other Class Members by operation of law shall
be deemed to have acknowledged, that the inclusion of “Unknown Claims” in the definition of Settled
Claims and Settled Defendants’ Claims was separately bargained for and was a key element of the
Settlement.

- 13 -

 

SCOPE AND EFFECT OF SETTLEMENT

     2. The obligations incurred pursuant to this Stipulation shall be in full and final
disposition of the Action and any and all Settled Claims as against all Released Parties and any
and all Settled Defendants’ Claims.

     3. (a) Upon the Effective Date of this Settlement, Lead Plaintiffs and all the other members
of the Class on behalf of themselves, their heirs, executors, administrators, predecessors,
successors and assigns, shall, with respect to each and every Settled Claim, release and forever
discharge, and shall forever be barred and enjoined from initiating, continuing, filing or
otherwise prosecuting, any Settled Claims against any of the Released Parties, whether or not Lead
Plaintiffs and Class Members have executed and delivered a Proof of Claim, participated in the
Settlement, filed an objection to the Settlement, the Proposed Plan of Allocation, or any
application by Lead Plaintiffs’ counsel for an award of Attorneys’ Fees and Expenses, and whether
or not the claims of such Class Members have been approved or allowed. Nothing herein shall,
however, bar any action or claim to enforce the terms of this Stipulation and Agreement of
Settlement or the Order and Final Judgment.

          (b) Upon the Effective Date of this Settlement, each of the Defendants, on behalf of
themselves, their heirs, executors, administrators, predecessors, successors and assigns, and the
other Released Parties, shall release

- 14 -

 

and forever discharge each and every of the Settled Defendants’ Claims, and shall forever be
enjoined from prosecuting the Settled Defendants’ Claims against Lead Plaintiffs, all other Class
Members and their counsel. Nothing contained herein shall, however, bar any action or claim to
enforce the terms of this Stipulation and Agreement of Settlement or the Order and Final Judgment.

THE SETTLEMENT CONSIDERATION

     4. As consideration for the release of the Settled Claims, Defendants shall pay, and/or, with
respect to the Beazer Defendants, cause their insurers to pay, their respective Cash Settlement
Amounts, as defined in paragraph 1(c), into escrow for the benefit of Plaintiffs and the Class,
within eleven (11) business days of entry of an Order for Notice and Hearing, substantially in the
form annexed hereto as Exhibit A. The payments shall be made to the “Beazer Homes Securities
Litigation Settlement Fund,” which has been assigned IRS Taxpayer Identification Number 26-4730772,
in accordance with wire instructions to be sent to Defendants’ Counsel by Plaintiffs’ Co-Lead
Counsel prior to the entry of the Order for Notice and Hearing, or by check payable to the “Beazer
Homes Securities Litigation Settlement Fund.” Upon deposit of any of the Cash Settlement Amounts
into escrow, the Cash Settlement Amounts and any income or interest earned thereon shall be the
“Gross Settlement Fund.” In no event shall the Defendants or their insurers be required to pay any
amounts, other than specified in this

- 15 -

 

paragraph and in paragraph 1(c), including without limitation, payment to the Class Members of
their attorneys’ fees or reimbursement of any other expenses.

     5. (a) The Gross Settlement Fund, net of any Taxes (as defined below) on the income thereof,
shall be used to pay (i) the Notice and Administration Costs referred to in ¶¶ 6-7 hereof, (ii) the
attorneys’ fee and expense award referred to in ¶ 8-9 hereof, and (iii) the remaining
administration expenses referred to in ¶ 10 hereof. The balance of the Gross Settlement Fund after
the above payments shall be the “Net Settlement Fund.” The Net Settlement Fund shall be
distributed to the Authorized Claimants as provided in ¶¶ 11-13 hereof. Any sums required to be
held in escrow hereunder prior to the Effective Date shall be held by Plaintiffs’ Co-Lead Counsel
as Escrow Agents for the Gross Settlement Fund pursuant to the terms of this Stipulation in an
escrow account in the name of the “Beazer Homes Securities Litigation Settlement Fund” at Signature
Bank, 565 Fifth Avenue, New York, New York 10017, and no withdrawals shall be permitted from the
account without the signatures of an authorized representative from each of the three (3) firms of
Co-Lead Counsel. The parties agree that the escrow account shall be maintained in accordance with
applicable New York State law and in compliance with the form of the escrow agreement governing
such escrow account, attached hereto as Exhibit C. Prior to the Effective Date, Defendants’
Counsel shall receive copies of all bank statements

- 16 -

 

relating to the Beazer Homes Securities Litigation Settlement Fund account. The Released
Parties shall not bear any risk or have any liability for losses related to the investment of the
Gross Settlement Fund. All funds held by the Escrow Agents shall be deemed to be in the custody of
the Court and shall remain subject to the jurisdiction of the Court until such time as the funds
shall be distributed or returned to the persons paying the same pursuant to this Stipulation and/or
further order of the Court. The parties acknowledge and agree that, once placed in the Settlement
Fund escrow account, the Defendants in general (and Beazer in particular) have no rights to any
escrow property, except as provided herein in the event of a termination of this Stipulation. The
Escrow Agents shall invest any funds held in escrow in short-term United States Agency or Treasury
Securities (or a mutual fund invested solely in such instruments) or in a non-interest bearing
account with a FDIC insured bank which is fully guaranteed by the US Government, and shall collect
and reinvest any interest as is accrued thereon. The parties hereto agree that the Settlement Fund
is intended to be a Qualified Settlement Fund within the meaning of Treasury Regulation § 1.468B-1
and that the Escrow Agents, as administrator of the Settlement Fund within the meaning of Treasury
Regulation §1.468B-2(k)(3), shall be responsible for filing tax returns for the Settlement Fund and
paying from the Settlement Fund any Taxes owed with respect to the Settlement Fund. The parties
hereto agree that the Settlement fund shall be treated

- 17 -

 

as a Qualified Settlement Fund from the earliest date possible, and agree to any relation-back
election required to treat the Settlement Fund as a Qualified Settlement Fund from the earliest
date possible. Defendants’ Counsel agree to provide promptly to the Escrow Agents the statement
described in Treasury Regulation § 1.468B-3(e).

          (b) All (i) taxes on the income of the Gross Settlement Fund and (ii) expenses and costs
incurred in connection with the taxation of the Gross Settlement Fund (including, without
limitation, expenses of tax attorneys and accountants) (collectively “Taxes”) shall be paid out of
the Gross Settlement Fund, shall be considered to be a cost of administration of the settlement and
shall be timely paid by the Escrow Agents without prior Order of the Court. The Escrow Agents
shall be responsible for filing tax returns for the Gross Settlement Fund and paying from the Gross
Settlement Fund any Taxes owed with respect to the Gross Settlement Fund. Prior to the Effective
Date, the Escrow Agents shall respond to Defendants’ Counsel’s reasonable requests for information
about such tax payments.

ADMINISTRATION

     6. The Claims Administrator shall administer the Settlement subject to the jurisdiction of the
Court. Except as stated in ¶ 15 hereof, Defendants shall have no responsibility for the
administration of the Settlement and shall have no liability

- 18 -

 

to the Class in connection with such administration. Defendants’ Counsel shall cooperate in
the administration of the Settlement to the extent reasonably necessary to effectuate its terms.
Beazer will provide, as soon as possible, to the Claims Administrator all information from Beazer’s
transfer records concerning the identity of Beazer’s shareholders, and their transactions, during
the Class Period. Any charges, fees or expenses incurred by Beazer for providing this information
will be deemed Administrative Costs (referred to in ¶¶ 6-7) and shall be promptly reimbursed to
Beazer by the Escrow Agent upon presentation of an invoice therefore.

     7. Plaintiffs’ Co-Lead Counsel may pay from the Cash Settlement Amounts, without further
approval from the Defendants, up to $150,000 for the reasonable costs and expenses associated with
identifying members of the Class and effecting mail Notice and Publication Notice to the Class, and
the administration of the Settlement, including without limitation, the actual costs of
publication, printing and mailing the Notice, reimbursements to nominee owners for forwarding
notice to their beneficial owners, and the administrative expenses incurred and fees charged by the
Claims Administrator in connection with providing notice and processing the submitted claims
(“Administrative Costs”).

- 19 -

 

ATTORNEYS’ FEES AND EXPENSES

     8. Plaintiffs’ Co-Lead Counsel will apply to the Court for an award from the Gross Settlement
Fund of attorneys’ fees and reimbursement of expenses. Notwithstanding the existence of any
timely-filed objections, or potential appeal therefrom, or collateral attack on the Settlement or
any part thereof, the fees and expenses, as awarded by the Court, shall be payable to Plaintiffs’
Co-Lead Counsel exclusively from the Gross Settlement Fund after the Court (a) enters the Order and
Final Judgment and (b) executes an order awarding such fees and expenses. Before any of the three
(3) Plaintiffs’ Co-Lead Counsel firms can withdraw any funds for their fees and expenses out of the
Gross Settlement Fund prior to the Effective Date, such firm must provide to Defendants an
undertaking, providing security with respect to repayment of such funds for fees and expenses to
the Gross Settlement Fund in the event that the Settlement is cancelled or terminated for any
reason, or the order making the fee and expense award is reversed or modified, which shall be
subject to Defendants’ approval, in their sole discretion. Absent Defendants’ providing such
approval, such Plaintiffs’ Co-Lead Counsel firm may not withdraw any funds for its fees and
expenses out of the Gross Settlement Fund prior to the Effective Date. Plaintiffs’ Co-Lead Counsel
accepting any such fee and expense payment agrees by such acceptance to be subject to the
jurisdiction of the Court to enforce their repayment obligations hereunder.

- 20 -

 

     9. Plaintiffs’ Co-Lead Counsel shall allocate the attorneys’ fees amongst Plaintiffs’ Counsel
in a manner in which they in good faith believe reflects the contributions of such counsel to the
prosecution and settlement of the Action with Defendants. Defendants have no liability or
obligation to Lead Plaintiffs, the other members of the Class, or Plaintiffs’ Counsel, with respect
to any attorneys’ fees, costs or expenses other than Defendants’ obligation to pay or cause to be
paid their respective Cash Settlement Amounts, as defined in paragraph 1(c). It is not a condition
of this Stipulation that any particular attorneys’ fees, costs or expenses be awarded by the Court.

DISTRIBUTION TO AUTHORIZED CLAIMANTS

     10. Plaintiffs’ Counsel will apply to the Court, on notice to Defendants’ Counsel, for an
order (the “Class Distribution Order”) approving the Claims Administrator’s determinations
concerning the acceptance and rejection of the claims submitted herein and approving any fees and
expenses not previously applied for, including the fees and expenses of the Claims Administrator,
and, if the Effective Date has occurred, directing payment of the Net Settlement Fund to Authorized
Claimants.

     11. The Claims Administrator shall determine each Authorized Claimant’s pro rata share of the
Net Settlement Fund based upon each Authorized

- 21 -

 

Claimant’s Recognized Claim (as defined in the Plan of Allocation described in the Notice
annexed hereto as Exhibit 1 to Exhibit A, or in such other Plan of Allocation as the Court
approves); provided, however, that the Claims Administrator shall reserve an appropriate amount if
either the Claims Administrator or Plaintiffs’ Co-Lead Counsel has been made aware of an unresolved
dispute with any taxing authority concerning the amount of taxes due from the Gross Settlement
Fund, until such dispute is fully and finally resolved

     12. The Plan of Allocation proposed in the Notice is not a necessary term of this Stipulation
and it is not a condition of this Stipulation that any particular Plan of Allocation be approved.
Reversal of any plan of allocation approved by the Court shall not constitute grounds for
terminating the Settlement, shall not act to terminate the Settlement, and shall have no impact on
the releases granted herein to the Defendants and the Released Parties.

     13. Each Authorized Claimant shall be allocated a pro rata share of the Net Settlement Fund
based on his or her Recognized Claim compared to the total Recognized Claims of all accepted
claimants. This is not a claims-made settlement. The entire Net Settlement Fund shall be
distributed to the Authorized Claimants. The Defendants shall not be entitled to get back any of
the settlement monies once the Settlement becomes Final. The Defendants shall have no involvement
in reviewing or challenging claims.

- 22 -

 

ADMINISTRATION OF THE SETTLEMENT

     14. Any member of the Class who does not submit a valid Proof of Claim will not be entitled to
receive any of the proceeds from the Net Settlement Fund but will otherwise be bound by all of the
terms of this Stipulation and the Settlement, including the terms of the Order and Final Judgment
to be entered in the Action and the releases provided for herein, and will be barred from bringing
any action against the Released Parties concerning the Settled Claims.

     15. The Claims Administrator shall process the Proofs of Claim and, after entry of the Class
Distribution Order, distribute the Net Settlement Fund to the Authorized Claimants. Except for the
Defendants’ obligation to pay, or to cause their insurers to pay, their respective Cash Settlement
Amounts, as defined in paragraph 1(c), and except for Beazer’s obligation to cooperate in the
production of information with respect to the identification of Class Members from Beazer’s
shareholder transfer records, as provided herein, Defendants shall have no liability, obligation or
responsibility for the administration of the Settlement or disbursement of the Net Settlement Fund.
Plaintiffs’ Co-Lead Counsel shall have the right, but not the obligation, to advise the Claims
Administrator to waive what Plaintiffs’ Co-Lead Counsel deem to be formal or technical defects in
any Proofs of Claim submitted in the interests of achieving substantial justice.

- 23 -

 

     16. For purposes of determining the extent, if any, to which a Class Member shall be entitled
to be treated as an “Authorized Claimant”, the following conditions shall apply:

          (a) Each Class Member shall be required to submit a Proof of Claim (see attached Exhibit 2 to
Exhibit A), supported by such documents as are designated therein, including proof of the
transactions claimed and the losses incurred thereon, or such other documents or proof as the
Claims Administrator, in its discretion may deem acceptable;

          (b) All Proofs of Claim must be submitted by the date specified in the Notice, unless such
period is extended by Order of the Court. Any Class Member who fails to submit a Proof of Claim by
such date shall be forever barred from receiving any payment pursuant to this Stipulation (unless,
by Order of the Court, a later submitted Proof of Claim by such Class Member is approved), but
shall in all other respects be bound by all of the terms of this Stipulation and the Settlement,
including the terms of the Order and Final Judgment to be entered in the Action and the releases
provided for herein, and will be barred from bringing any action against the Released Parties
concerning the Settled Claims. Provided that it is received before the motion for the Class
Distribution Order is filed, a Proof of Claim shall be deemed to have been submitted when posted,
if received with a postmark indicated on the envelope and if mailed by first-class mail and

- 24 -

 

addressed in accordance with the instructions thereon. In all other cases, the Proof of Claim
shall be deemed to have been submitted when actually received by the Claims Administrator;

          (c) Each Proof of Claim shall be submitted to and reviewed by the Claims Administrator, who
shall determine in accordance with this Stipulation and the approved Plan of Allocation the extent,
if any, to which each claim shall be allowed, subject to review by the Court pursuant to
subparagraph (e) below;

          (d) Proofs of Claim that do not meet the submission requirements may be rejected. Prior to
rejection of a Proof of Claim, the Claims Administrator shall communicate with the claimant in
order to attempt to remedy the curable deficiencies in the Proof of Claim submitted. The Claims
Administrator shall notify, in a timely fashion and in writing, each claimant whose Proof of Claim
it proposes to reject in whole or in part, setting forth the reasons therefor, and shall indicate
in such notice that the claimant whose claim is to be rejected has the right to a review by the
Court if the claimant so desires and complies with the requirements of subparagraph (e) below;

          (e) If any claimant whose claim has been rejected in whole or in part desires to contest such
rejection, the claimant must, within twenty (20) days after the date of mailing of the notice
required in subparagraph (d) above, serve upon the Claims Administrator a notice and statement of
reasons indicating the

- 25 -

 

claimant’s grounds for contesting the rejection along with any supporting documentation, and
requesting a review thereof by Plaintiffs’ Co-Lead Counsel. If a dispute concerning a claim cannot
be otherwise resolved, Plaintiffs’ Co-Lead Counsel shall thereafter present the request for review
to the Court on notice to the claimant; and

          (f) The administrative determinations of the Claims Administrator accepting and rejecting
claims shall be presented to the Court, on notice to Defendants’ Counsel, for approval by the Court
in the Class Distribution Order.

     17. Each claimant shall be deemed to have submitted to the jurisdiction of the Court with
respect to the claimant’s claim, and the claim will be subject to investigation and discovery under
the Federal Rules of Civil Procedure, provided that such investigation and discovery shall be
limited to that claimant’s status as a Class Member and the validity and amount of the claimant’s
claim. No discovery shall be allowed on the merits of the Action or Settlement in connection with
processing of the Proofs of Claim.

     18. Payment pursuant to this Settlement shall be deemed final and conclusive against all Class
Members. All Class Members whose claims are not approved by the Court shall be barred from
participating in distributions from the Net Settlement Fund, but otherwise shall be bound by all of
the terms of this Stipulation and the Settlement, including the terms of the Order and Final

- 26 -

 

Judgment to be entered in the Action and the releases provided for herein, and will be barred
from bringing any action against the Released Parties concerning the Settled Claims whether or not
such Class Member has filed an objection to the Settlement, the proposed Plan of Allocation, or any
application by any of the Plaintiffs’ Co-Lead Counsel for an award of attorney’s fees and expenses.

     19. Lead Plaintiffs and any and all Class Members shall be bound by all the terms of this
Stipulation including the terms of the Order and Final Judgment entered in the Action and the
releases provided for herein, and will be barred from bringing any action against the Defendants
concerning the Settled Claims whether or not Lead Plaintiffs or Class Members participated in the
Net Settlement Fund, and whether or not the claims of Lead Plaintiffs or such Class Members have
been approved or allowed.

     20. All proceedings with respect to the administration, processing and determination of claims
described by ¶ 16 of this Stipulation and the determination of all controversies relating thereto,
including disputed questions of law and fact with respect to the validity of claims, shall be
subject to the jurisdiction of the Court.

     21. The Net Settlement Fund shall be distributed to Authorized Claimants by the Claims
Administrator only after the Effective Date and after: (a) all timely Claims have been processed,
and all claimants whose Claims have been rejected or

- 27 -

 

disallowed, in whole or in part, have been notified and provided the opportunity to be heard
concerning such rejection or disallowance; (b) all objections with respect to all rejected or
disallowed claims have been resolved by the Court, and all appeals therefrom have been resolved or
the time therefor has expired, or a reserve has been made to cover the potential payment to such
claimants; (c) all matters with respect to attorneys’ fees, costs, and disbursements have been
resolved by the Court, all appeals therefrom have been resolved or the time therefor has expired,
or a reserve has been made to cover the potential payment with respect to such attorneys’ fees,
costs, and disbursements; and (d) all costs of administration have been paid or provided for.

TERMS OF ORDER FOR NOTICE AND HEARING

     22. Promptly after this Stipulation has been fully executed, Plaintiffs’ Co-Lead Counsel and
Defendants’ Counsel jointly shall apply to the Court for entry of an Order for Notice and Hearing,
substantially in the form annexed hereto as Exhibit A. The parties shall request that the Order
for Notice and Hearing provide that requests for exclusion must be postmarked at least seven (7)
calendar days prior to the Settlement Fairness Hearing date. Upon receiving any request(s) for
exclusion pursuant to the Notice, the Claims Administrator shall promptly send copies of such
exclusion requests to Plaintiffs’ Co-Lead Counsel and counsel for Defendants.

- 28 -

 

TERMS OF ORDER AND FINAL JUDGMENT

     23. If the Settlement contemplated by this Stipulation is approved by the Court, counsel for
the parties shall request that the Court enter an Order and Final Judgment substantially in the
form annexed hereto as Exhibit B.

OPT-OUT TERMINATION RIGHT

     24. Beazer, on behalf of the Beazer Defendants, or Deloitte individually, may terminate their
or its participation in this Settlement if potential Class Members who in total purchased in excess
of four percent (4%) of the shares of Beazer common stock purchased during the Class Period exclude
themselves from the Class. Except as otherwise provided herein, the election of either Beazer, on
behalf of the Beazer Defendants, or Deloitte individually to terminate this Settlement shall not
impact the Settlement as to the non-terminating party. In the event of a termination by Beazer, on
behalf of the Beazer Defendants, or Deloitte individually, this Stipulation as to the terminating
party shall become null and void and of no further force and effect except for the provisions of ¶
28. If Beazer, on behalf of the Beazer Defendants, or Deloitte individually, elects to terminate
this Settlement pursuant to this paragraph written notice of such termination must be provided to
Plaintiffs’ Co-Lead Counsel on or before three (3) calendar days prior to the Settlement Fairness
Hearing. Plaintiffs’ Co-Lead Counsel shall have the right to communicate with Class Members
regarding their decisions to opt-out. If

- 29 -

 

a sufficient number of Class Members withdraw their requests for exclusion such that the total
number of remaining shares requesting exclusion falls below the four percent (4%) threshold noted
above, Plaintiffs’ Co-Lead Counsel shall so advise Defendants’ Counsel in writing and provide proof
of the withdrawal from the Class Members, and any notice by Defendants of termination of the
Settlement shall automatically and immediately become null and void.

EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION

     25. The “Effective Date” of Settlement shall be the date when all the following shall have
occurred:

          (a) approval by the Court of the Settlement, following notice to the Class and a hearing, as
prescribed by Rule 23 of the Federal Rules of Civil Procedure; and

          (b) entry by the Court of an Order and Final Judgment, substantially in the form set forth in
Exhibit B annexed hereto, and the expiration of any time for appeal or review of such Order and
Final Judgment, or, if any appeal is filed and not dismissed, after such Order and Final Judgment
is upheld on appeal in all material respects and is no longer subject to review upon appeal or
review by writ of certiorari, or, in the event that the Court enters an order and final judgment in
a form other than that provided above (“Alternative Judgment”) and

- 30 -

 

none of the parties hereto elect to terminate this Settlement, the date that such Alternative
Judgment becomes Final and no longer subject to appeal or review.

     26. Beazer, on behalf of the Beazer Defendants, or Deloitte individually, and Lead Plaintiffs
shall each have the right to terminate the Settlement and this Stipulation by providing written
notice of their election to do so (“Termination Notice”) to all other parties hereto within thirty
(30) days of: (a) the Court’s declining to enter the Order for Notice and Hearing in any material
respect; (b) the Court’s refusal to approve this Stipulation or any material part of it; (c) the
Court’s declining to enter the Order and Final Judgment in any material respect; (d) the date upon
which the Order and Final Judgment is modified or reversed in any material respect by the Court of
Appeals or the Supreme Court; or (e) the date upon which an Alternative Judgment is modified or
reversed in any material respect by the Court of Appeals or the Supreme Court. In the event that
the respective Cash Settlement Amount for the Beazer Defendants, collectively, or Deloitte,
individually, is not fully paid within sixteen (16) business days from the entry of the Order for
Notice and Hearing, Plaintiffs’ Co-Lead Counsel shall have the right to provide a Termination
Notice to such Defendant, who shall have ten (10) business days to cure its non-payment by paying
its respective Cash Settlement Amount, plus interest at a two percent (2%) per annum rate for the
period from 11 business days after the entry of the Order for Notice and Hearing to

- 31 -

 

the date of actual payment. In the event that the respective Defendant does not cure its
non-payment, and its respective Cash Settlement Amount is not fully paid within twenty-six (26)
business days from the entry of the Order of Notice and Hearing, Plaintiffs’ Co-Lead Counsel shall,
for a period of ten (10) business days thereafter, in addition to any other rights hereunder, have
the right to terminate the Settlement and this Stipulation as to that respective Defendant, or, if
the amount of such nonpayment exceeds $1,000,000, in its entirety.

     27. In the event that any party elects to terminate this Settlement as to fewer than all
Defendants, the settling Defendants and the Plaintiffs agree to obtain entry of a contribution bar
order pursuant to the provisions of Private Securities Litigation Reform Act of 1995 and 15 U.S.C.
§ 78u-4(f)(7)(A). The order shall, among other things, bar all future claims for contribution
arising out of the action by any person, including the non-settling parties, against the settling
Defendants.

     28. Except as otherwise provided herein, in the event the Settlement is terminated, then the
parties to this Stipulation shall be deemed to have reverted to their respective status in the
Action as of April 10, 2009 and, except as otherwise expressly provided, the parties shall proceed
in all respects as if this Stipulation and any related orders had not been entered, and the
respective Defendants’ Cash Settlement Amounts, as defined in paragraph 1(c), previously paid by or
on behalf of Defendants, together with any interest earned on each of the respective Cash

- 32 -

 

Settlement Amounts thereon, less a pro rata share (based on the respective Cash Settlement
Amounts) of any Taxes due with respect to such income, and less a pro rata share based on the
respective Cash Settlement Amounts of up to $150,000 of the costs of administration and notice
actually incurred and paid or payable from the Cash Settlement Amounts, shall be returned by the
Escrow Agents to the entities paying the same within five (5) business days, unless the funds are
invested in a manner in which expedited withdrawal would be financially detrimental and then with
respect to that portion, as soon as the funds can be reasonably withdrawn and distributed without
penalty or detriment.

NO ADMISSION OF WRONGDOING

     29. This Stipulation, whether or not consummated, and any proceedings taken pursuant to it:

          (a) shall not be offered or received against any Defendant as evidence of or construed as or
deemed to be evidence of any presumption, concession, or admission by any Defendant with respect to
the truth of any fact alleged by any of the plaintiffs or the validity of any claim that has been
or could have been asserted in the Action or in any litigation, or the deficiency of any defense
that has been or could have been asserted in the Action or in any litigation, or of any liability,
negligence, fault, or wrongdoing of any Defendant;

- 33 -

 

          (b) shall not be offered or received against any Defendant as evidence of a presumption,
concession or admission of any fault, misrepresentation or omission with respect to any statement
or written document approved or made by any Defendant;

          (c) shall not be offered or received against any Defendant as evidence of a presumption,
concession or admission with respect to any liability, negligence, fault or wrongdoing, or in any
way referred to for any other reason as against any Defendant, in any other civil, criminal or
administrative action or proceeding, other than such proceedings as may be necessary to effectuate
the provisions of this Stipulation; provided, however, that if this Stipulation is approved by the
Court, the Defendants may refer to it to effectuate the liability protection granted them
hereunder;

          (d) shall not be construed against any Defendant as an admission or concession that the
consideration to be given hereunder represents the amount which could be or would have been
recovered after trial; and

          (e) shall not be construed as or received in evidence as an admission, concession or
presumption against Lead Plaintiffs or any of the other Class Members that any of their claims are
without merit, or that any defenses asserted by any Defendants have any merit, or that damages
recoverable under the Complaint would not have exceeded the Gross Settlement Fund.

- 34 -

 

MISCELLANEOUS PROVISIONS

     30. All of the exhibits attached hereto are hereby incorporated by reference as though fully
set forth herein.

     31. Bankruptcy Matters:

          (a) In the event of a Beazer bankruptcy before the Order and Final Judgment is entered, Beazer
agrees not to take any action or bring any proceeding to (i) oppose approval of the Stipulation
after the filing, (ii) seek to delay approval of the Stipulation, (iii) seek to delay or take any
action with regard to performance of the Stipulation whether before or after approval of the
Settlement, and/or (iv) take any other action or bring any proceeding which affects, limits or
restrains the rights and duties of all other parties to the Stipulation.

          (b) In the event of a Beazer bankruptcy before the Defendants’ respective Cash Settlement
Amounts are paid into escrow as described in ¶¶ 4 and 5, the obligation of Defendants and/or their
insurers to fund their respective Cash Settlement Amounts and the distribution from the escrow
account of any funds from the Gross Settlement Fund will be contingent upon the approval of the
bankruptcy court. The requirement for such approval shall not be deemed a concession that such
approval is legally necessary or that the bankruptcy court has jurisdiction over the Cash
Settlement Amounts or the Gross Settlement Fund.

- 35 -

 

          (c) In the event of a Beazer bankruptcy after the funding of escrow but before the Order and
Final Judgment is entered, no distribution will be made to Class Members prior to the later of:
(1) one year after the payment of the Cash Settlement Amounts into escrow, or (2) if in such Beazer
bankruptcy, a proceeding is brought seeking to assert a fraudulent transfer or preferential
transfer claim with respect to any part of the Cash Settlement Amounts or a claim that the payment
of such Cash Settlement Amounts violates the automatic stay within the one year after the payment
of the Cash Settlement Amounts into escrow, a final determination has been made with respect to
that claim, provided that no distributions shall be made that are prohibited by such final
determination.

          (d) Each Defendant paying its respective Cash Settlement Amount, as defined in paragraph 1(c),
represents as to itself that as of the date of this Stipulation, it is not insolvent (within the
meaning of and/or for the purposes of the United States Bankruptcy Code, including §§ 101 and 547),
and represents that as of the date of this Stipulation, it does not believe that the funding of its
respective Cash Settlement Amount, by itself or on its behalf by its insurers, will cause it to
become insolvent. Beazer further represents that the proceeds of the insurance policies under
which its insurers are paying funds to the Gross Settlement Fund are not Beazer’s property. These
warranties are made by each such Defendant and not by such Defendant’s Counsel.

- 36 -

 

     32. If a case is commenced in respect of any Defendant paying their respective Cash Settlement
Amounts, as defined in paragraph 1(c), (or any insurer contributing funds to the respective Cash
Settlement Amounts, as defined in paragraph 1(c), on behalf of any Defendant) under Title 11 of the
United States Code (Bankruptcy), or a trustee, receiver, conservator, or other fiduciary is
appointed under any similar law, and in the event of the entry of a final order of a court of
competent jurisdiction determining the transfer of money to the Gross Settlement Fund or any
portion thereof by or on behalf of such Defendant to be a preference, voidable transfer, fraudulent
transfer or similar transaction and any portion thereof is required to be returned, and such amount
is not promptly deposited to the Gross Settlement Fund by others, then, at the election of
Plaintiffs’ Co-Lead Counsel, the parties shall jointly move the Court to vacate and set aside the
releases given and any judgment entered in favor of the Defendants pursuant to this Stipulation,
which releases and judgment shall be null and void, and the parties shall be restored to their
respective positions in the litigation as of April 10, 2009 and any Cash Settlement Amounts in the
Gross Settlement Fund shall be returned as provided in ¶ 28 above.

     33. The parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could be asserted by the Class Members against the
Released Parties with respect to the Settled Claims.

- 37 -

 

Accordingly, Lead Plaintiffs and Defendants agree not to assert in any forum that the
litigation was brought by Plaintiffs or defended by Defendants in bad faith or without a reasonable
basis. The parties hereto shall assert no claims of any violation of Rule 11 of the Federal Rules
of Civil Procedure relating to the prosecution, defense, or settlement of the Action. The parties
agree that the amount paid and the other terms of the Settlement were negotiated at arm’s length in
good faith by the parties, and reflect a settlement that was reached voluntarily after consultation
with experienced legal counsel.

     34. This Stipulation may not be modified or amended, nor may any of its provisions be waived
except by a writing signed by all parties hereto or their successors-in-interest.

     35. The headings herein are used for the purpose of convenience only and are not meant to have
legal effect.

     36. The administration and consummation of the Settlement as embodied in this Stipulation
shall be under the authority of the Court and the Court shall retain jurisdiction for the purpose
of entering orders providing for awards of attorneys’ fees and expenses to Plaintiffs’ Co-Lead
Counsel and enforcing the terms of this Stipulation.

- 38 -

 

     37. The waiver by one party of any breach of this Stipulation by any other party shall not be
deemed a waiver of any other prior or subsequent breach of this Stipulation.

     38. This Stipulation and its exhibits constitute the entire agreement among the parties hereto
concerning the Settlement of the Action, and no representations, warranties, or inducements have
been made by any party hereto concerning this Stipulation and its exhibits other than those
contained and memorialized in such documents.

     39. This Stipulation may be executed in one or more counterparts. All executed counterparts
and each of them shall be deemed to be one and the same instrument.

     40. This Stipulation shall be binding upon, and inure to the benefit of, the successors and
assigns of the parties hereto.

     41. The construction, interpretation, operation, effect and validity of this Stipulation, and
all documents necessary to effectuate it, shall be governed by the internal laws of the State of
Georgia without regard to conflicts of laws, except to the extent that federal law requires that
federal law governs. Nothing in this Paragraph 40 shall be construed to contradict the fact that
the escrow agreement reflected in Exhibit C shall be governed by New York law.

- 39 -

 

     42. No opinion or advice concerning the tax consequences of the proposed Settlement to
individual Class Members is being given or will be given by Plaintiffs’ Co-Lead Counsel or counsel
for the Defendants; nor is any representation or warranty in this regard made by virtue of this
Stipulation. Each Class Member’s tax obligations, and the determination thereof, are the sole
responsibility of the Class Member, and it is understood that the tax consequences may vary
depending on the particular circumstances of each individual Class Member.

     43. This Stipulation shall not be construed more strictly against one party than another
merely by virtue of the fact that it, or any part of it, may have been prepared by counsel for one
of the parties, it being recognized that it is the result of arm’s-length negotiations between the
parties and all parties have contributed substantially and materially to the preparation of this
Stipulation.

     44. All counsel and any other person executing this Stipulation and any of the exhibits
hereto, or any related settlement documents, warrant and represent that they have the full
authority to do so and that they have the authority to take appropriate action required or
permitted to be taken pursuant to the Stipulation to effectuate its terms.

     45. Plaintiffs’ Co-Lead Counsel and Defendants’ Counsel agree to cooperate fully with one
another in seeking Court approval of the Order for Notice

- 40 -

 

and Hearing, the Stipulation and the Settlement, and to promptly agree upon and execute all
such other documentation as may be reasonably required to obtain final approval by the Court of the
Settlement.

Dated: May 4, 2009

	 	 	 	 	 	 	 
	 	 	CHITWOOD HARLEY HARNES LLP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Martin D. Chitwood

Georgia Bar No. 124950

Robert W. Killorin

Georgia Bar No. 417775

Krissi T. Gore

Georgia Bar No. 687020

2300 Promenade II

1230 Peachtree Street, NE

Atlanta, GA 30309

Telephone: (404) 873-3900

Facsimile: (404) 876-4476

mchitwood@chitwoodlaw.com

rkillorin@chitwoodlaw.com

kgore@chitwoodlaw.com	 	 
	 
	 	 	 	 	 	 
	 	 	MILBERG LLP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Matthew Gluck

Christopher S. Polaszek

Leigh Smith

Kristi Stahnke McGregor

Georgia Bar No. 674012

One Penn Plaza

New York, NY 10119

Telephone: (212) 594-5300

Facsimile: (212) 868-1229

mgluck@milberg.com	 	 

- 41 -

 

	 	 	 	 	 	 	 
	 	 	cpolaszek@milberg.com

lsmith@milberg.com

kmcgregor@milberg.com	 	 
	 
	 	 	 	 	 	 
	 	 	BERNSTEIN LIEBHARD LLP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Jeffrey M. Haber

Joseph R. Seidman, Jr.

Gregory M. Egleston

10 East 40th Street

22nd Floor

New York, NY 10016

Telephone: (212) 779-1414

Facsimile: (212) 779-3218

haber@bernlieb.com

seidman@bernlieb.com

egleston@bernlieb.com

Co-Lead Counsel for the Class	 	 

Counsel for Defendants:

	 	 	 	 	 
	Troutman Sanders LLP	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	John J. Dalton

J. Timothy Mast

Jaime L. Theriot

600 Peachtree Street, N.E., Suite 5200

Atlanta, GA 30308-2216

Telephone: (404) 885-3000

Facsimile: (404) 885-3900	 	 

- And -

- 42 -

 

	 	 	 	 	 
	Cravath, Swaine & Moore LLP	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Richard W. Clary

Michael A. Paskin

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019-7475

Telephone: (212) 474-1000

Facsimile: (212) 474-3700	 	 
	 
	 	 	 	 
	Attorneys for Defendants Beazer 

Homes USA, Inc.,
Ian J. McCarthy, 

and James
O’Leary	 	 
	 
	 	 	 	 
	Rogers & Hardin LLP	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Tony G. Powers

Kimberly L. Myers

2700 International Tower

Peachtree Center

229 Peachtree St. N.E.

Atlanta, GA 30303

Telephone: (404) 522-4700

Facsimile: (404) 525-2224	 	 
	 
	 	 	 	 
	Attorneys for Defendant Michael T. Rand	 	 
	 
	 	 	 	 
	Hartman, Simons, Spielman & Wood LLP	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Scott M. Ratchick

Christopher Scott Badeaux

6400 Powers Ferry Road, N.W.,

Suite 400	 	 

- 43 -

 

	 	 	 	 	 
	Atlanta, GA 30339

Telephone: (770) 955-3555

Facsimile: (678) 391-9958

- and —	 	 
	 
	 	 	 	 
	covington & burling llp	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Bruce A. Baird

Dimple Gupta

1201 Pennsylvania Avenue

Washington, DC 20004

Telephone: (202) 662-6000

Facsimile: (202) 662-6291

Attorneys for Michael Furlow	 	 

- 44 -

 

	 	 	 	 	 
	Sutherland Asbill & Brennan LLP	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Amelia Toy Rudolph

Patricia A. Gorham

999 Peachtree Street, N.E., Suite 2300

Atlanta, GA 30309-3996

Telephone: (404) 853-8393

Facsimile: (404) 853-8806

amelia.rudolph@sutherland.com

patricia.gorham@sutherland.com

Attorneys for Deloitte& Touche LLP	 	 

- 45 -EX-4.1

Exhibit 4.1

Psychiatric Solutions, Inc.

$120,000,000

73/4% Senior Subordinated Notes due 2015

PURCHASE AGREEMENT

dated May 4, 2009

Banc of America Securities LLC

Barclays Capital Inc.

Citigroup Global Markets Inc.

J.P. Morgan Securities Inc.

RBC Capital Markets Corporation

 

 

PURCHASE AGREEMENT

May 4, 2009

Banc of America Securities LLC

     as Representative of the Initial Purchasers named in Schedule A

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

     Introductory. Psychiatric Solutions, Inc., a corporation organized under the laws of Delaware
(the “Company”), proposes to issue and sell to the several Initial Purchasers named in Schedule A
(the “Initial Purchasers”), acting severally and not jointly, the respective amounts set forth in
such Schedule A of $120,000,000 aggregate principal amount of the Company’s 73/4% Senior Subordinated
Notes due 2015 (the “Notes”, and together with the Guarantees (as defined below), the
“Securities”). Banc of America Securities LLC has agreed to act as the representative of the
several Initial Purchasers (the “Representative”) in connection with the offering and sale of the
Securities.

     The Securities will be issued pursuant to an indenture, to be dated as of the Closing Date (as
defined below) (the “Indenture”), among the Company, each of the Guarantors (as defined below) and
U.S. Bank National Association, as trustee (the “Trustee”). The Securities will be issued only in
book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the
“Depositary”), pursuant to a letter of representations, to be dated on or before the Closing Date
(the “DTC Agreement”), among the Company, the Guarantors, the Trustee and the Depositary.

     The holders of the Securities will be entitled to the benefits of a registration rights
agreement, to be dated as of the Closing Date (the “Registration Rights Agreement”), among the
Company, each of the Guarantors and the Representative, pursuant to which the Company and the
Guarantors may be required to file with the Securities and Exchange Commission (the “Commission”),
under the circumstances set forth therein, (i) a registration statement under the Securities Act of
1933 (as amended, the “Securities Act”, which term, as used herein, includes the rules and
regulations of the Commission thereunder) relating to another series of debt securities of the
Company with terms substantially identical to the Securities (the “Exchange Securities”) to be
offered in exchange for the Securities (the “Exchange Offer”) and (ii) to the extent required by
the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 of the
Securities Act relating to the resale by certain holders of the Securities, and in each case, to
use its reasonable best efforts to cause such registration statements to be declared effective.
All references herein to the Exchange Securities and the Exchange Offer are only applicable if the
Company and the Guarantors are in fact required to consummate the Exchange Offer pursuant to the
terms of the Registration Rights Agreement.

 

 

     The payment of principal of and premium, if any, on the Notes will be fully and
unconditionally guaranteed (the “Guarantees”) on a senior subordinated unsecured basis, jointly and
severally by each of the Company’s direct and indirect domestic subsidiaries set forth on Schedule
B hereto (the “Guarantors”) and (ii) any subsidiary of the Company formed or acquired after the
Closing Date that executes an additional guarantee in accordance with the terms of the Indenture,
and their respective successors and assigns.

     The Company understands that the Initial Purchasers propose to make an offering of the
Securities on the terms and in the manner set forth herein and in the Pricing Disclosure Package
(as defined below) and agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (the “Subsequent Purchasers”) on the
terms set forth in the Pricing Disclosure Package (the first time when sales of the Securities are
made is referred to as the “Time of Sale”). The Securities are to be offered and sold to or
through the Initial Purchasers without being registered with the Commission under the Securities
Act, in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the
Indenture, investors who acquire Securities shall be deemed to have agreed that the Securities may
only be resold or otherwise transferred, after the date hereof, if such Securities are registered
for sale under the Securities Act or if an exemption from the registration requirements of the
Securities Act is available (including the exemptions afforded by Rule 144A under the Securities
Act (“Rule 144A”) or Regulation S under the Securities Act (“Regulation S”)).

     The Company has prepared and delivered to each Initial Purchaser copies of a Preliminary
Offering Memorandum, dated May 4, 2009 (the “Preliminary Offering Memorandum”), and has prepared
and delivered to each Initial Purchaser copies of a Pricing Supplement, dated May 4, 2009 (the
“Pricing Supplement”), describing the terms of the Securities, each for use by such Initial
Purchaser in connection with its solicitation of offers to purchase the Securities. The
Preliminary Offering Memorandum and the Pricing Supplement are herein referred to as the “Pricing
Disclosure Package.” Promptly after this Agreement is executed and delivered, the Company will
prepare and deliver to each Initial Purchaser a final offering memorandum, dated the date hereof
(the “Final Offering Memorandum”). The Company hereby confirms that it has authorized the use of
the Pricing Disclosure Package and the Final Offering Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial Purchasers.

     All references herein to the terms “Pricing Disclosure Package” and “Final Offering
Memorandum” shall be deemed to mean and include all information filed under the Securities Exchange
Act of 1934 (as amended, the “Exchange Act,” which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder) prior to the Time of Sale and incorporated by
reference in the Pricing Disclosure Package (including the Preliminary Offering Memorandum) or the
Final Offering Memorandum (as the case may be), and all references herein to the terms “amend,”
“amendment” or “supplement” with respect to the Final Offering Memorandum shall be deemed to mean
and include all information filed under the Exchange Act after the Time of Sale and incorporated by
reference in the Final Offering Memorandum.

-2-

 

     The Company hereby confirms its agreements with the Initial Purchasers as follows:

     SECTION 1. Representations and Warranties. Each of the Company and the Guarantors, jointly
and severally, hereby represents, warrants and covenants to each Initial Purchaser that, as of the
date hereof and as of the Closing Date (references in this Section 1 to the “Offering Memorandum”
are to (x) the Pricing Disclosure Package in the case of representations and warranties made as of
the date hereof and (y) the Pricing Disclosure Package and the Final Offering Memorandum in the
case of representations and warranties made as of the Closing Date):

     (a) No Registration Required. Subject to compliance by the Initial Purchasers with the
representations and warranties set forth in Section 2 hereof and with the procedures set forth in
Section 7 hereof, it is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by
this Agreement and the Offering Memorandum to register the Securities under the Securities Act or,
until such time as the Exchange Securities are issued pursuant to an effective registration
statement, to qualify the Indenture under the Trust Indenture Act of 1939 (the “Trust Indenture
Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated
thereunder).

     (b) No Integration of Offerings or General Solicitation. None of the Company, its affiliates
(as such term is defined in Rule 501 under the Securities Act) (each, an “Affiliate”), or any
person acting on its or any of their behalf (other than the Initial Purchasers, as to whom the
Company makes no representation or warranty) has, directly or indirectly, solicited any offer to
buy or offered to sell, or will, directly or indirectly, solicit any offer to buy or offer to sell
any security which is or would be integrated with the sale of the Securities in a manner that would
require the Securities to be registered under the Securities Act. None of the Company, its
Affiliates, or any person acting on its or any of their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation or warranty) has engaged or will engage, in
connection with the offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502 under the Securities Act. With respect to those
Securities sold in reliance upon Regulation S, (i) none of the Company, its Affiliates or any
person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company
makes no representation or warranty) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S and (ii) each of the Company and its Affiliates and any person
acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no
representation or warranty) has complied and will comply with the offering restrictions set forth
in Regulation S.

     (c) Eligibility for Resale Under Rule 144A. The Securities are eligible for resale pursuant
to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S.
automated interdealer quotation system.

-3-

 

     (d) The Pricing Disclosure Package and Offering Memorandum. The Preliminary Offering
Memorandum, as of its date, did not contain or include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; neither the Pricing
Disclosure Package, as of the Time of Sale, nor the Final Offering Memorandum, as of its date or
(as amended or supplemented in accordance with Section 3(a), as applicable) as of the Closing Date,
contains or includes an untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from the Preliminary Offering Memorandum, the Pricing
Disclosure Package, the Final Offering Memorandum or any amendment or supplement thereto made in
reliance upon and in conformity with information furnished to the Company in writing by any Initial
Purchaser through the Representative expressly for use in the Pricing Disclosure Package, the Final
Offering Memorandum or amendment or supplement thereto, as the case may be. The Pricing Disclosure
Package contains, and the Final Offering Memorandum will contain, all the information specified in,
and meeting the requirements of, Rule 144A. The Company has not distributed and will not
distribute, prior to the later of the Closing Date and the completion of the Initial Purchasers’
distribution of the Securities, any offering material in connection with the offering and sale of
the Securities other than the Pricing Disclosure Package and the Final Offering Memorandum.

     (e) Company Additional Written Communications. The Company has not prepared, made, used,
authorized, approved or distributed, and will not prepare, make, use, authorize, approve or
distribute, any written communication that constitutes an offer to sell or solicitation of an offer
to buy the Securities (each such communication by the Company or its agents and representatives
(other than a communication referred to in clauses (i) and (ii) below) a “Company Additional
Written Communication”) other than (i) the Pricing Disclosure Package, (ii) the Final Offering
Memorandum and (iii) any electronic road show or other written communications, in each case used in
accordance with Section 3(a). Each such Company Additional Written Communication, when taken
together with the Pricing Disclosure Package, at the Time of Sale did not, and at the Closing Date
will not, contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from each such Company Additional Written Communication made in
reliance upon and in conformity with information furnished to the Company in writing by any Initial
Purchaser through the Representative expressly for use in any Company Additional Written
Communication.

     (f) No Other Compensation. 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 Notes (except as contemplated by this Agreement or as described in or
contemplated by the Pricing Disclosure Package, any Company Additional Written Communication and
the Final Offering Memorandum).

-4-

 

     (g) No Stabilization. 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) Incorporation and Good Standing. Each of the Company, the Guarantors and its or their
respective subsidiaries has been duly incorporated, organized or formed 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 Pricing Disclosure Package, any
Company Additional Written Communication and the Final Offering Memorandum, except such failures to
be qualified or in good standing as would not, either individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, and, in the case of the Company
and the Guarantors, to enter into and perform their obligations under each of this Agreement, the
Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange Securities and the
Indenture. Each of the Company, the Guarantors and its or their respective subsidiaries 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 be qualified or in
good standing as would not, either individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole.

     (i) No Violation. 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, 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 necessary to the ownership of its
property or to the conduct of its business, except in the case of clauses (ii) and (iii) 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 DTC
Agreement, or the consummation of any of the transactions contemplated hereby and thereby, or (b)
could not reasonably be expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company, the Guarantors and their
respective 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”).

-5-

 

     (j) Capitalization. The Company has an authorized capitalization as set forth in the Pricing
Disclosure Package, any Company Additional Written Communication and the Final Offering 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 Guarantor are owned directly or indirectly by the
Company or the Guarantors (except for the stock of Laurelwood Associates, Inc.), free and
clear of all liens, encumbrances, equities or claims, other than liens, encumbrances, equities or
claims under or permitted by the Company’s existing senior secured credit facilities.

     (k) Purchase Agreement. 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, and is a valid and binding agreement
of, the Company and the Guarantors, enforceable in accordance with its terms (assuming due
authorization, execution and delivery by the Initial Purchasers), except as rights to
indemnification and contribution hereunder may be limited by applicable law and except as the
enforcement thereof may be limited by 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.

     (l) Indenture. Each of the Company and the Guarantors has all requisite corporate, limited
liability company or partnership power and authority to enter into the Indenture. 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 (assuming
due authorization, execution and delivery by the Trustee), except as rights to indemnification and
contribution hereunder may be limited by applicable law and except as the enforcement thereof may
be limited by 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) Notes and Guarantees. Each of the Company and the Guarantors has all requisite corporate,
limited liability company or partnership power and authority to enter into the Notes and the
Guarantees, as applicable. The Notes have been duly authorized by the Company and the Guarantees
have been duly authorized by each of the Guarantors, and when duly executed by the Company and each
of the Guarantors, as applicable, and the Notes are 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, 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).

-6-

 

     (n) Exchange Notes and Exchange Guarantees. Each of the Company and the Guarantors has all
requisite corporate, limited liability company or partnership power and authority to enter into the
Exchange Notes and the Exchange Guarantees, as applicable. The Exchange Notes have been duly
authorized by the Company and the Exchange Guarantees have been duly authorized by each of the
Guarantors, as applicable, and when the Exchange Notes are 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, the Exchange Notes and the Exchange Guarantees will have been duly
executed and delivered by the Company and the Guarantors, respectively, and will constitute legal,
valid and binding obligations of the Company and 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).

     (o) Registration Rights Agreement. Each of the Company and the Guarantors has all requisite
corporate, limited liability company or partnership power and authority to enter into the
Registration Rights Agreement. 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).

     (p) Description of the Securities and the Indenture. The Securities, the Exchange Securities
and the Indenture will conform in all material respects to the respective statements relating
thereto contained in the Offering Memorandum.

     (q) No Material Adverse Change. Except as otherwise disclosed in the Offering Memorandum,
subsequent to the respective dates as of which information is given in the Offering Memorandum
exclusive of any amendment or supplement thereto: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, results of operations or
prospects, whether or not arising from transactions in the ordinary course of business, of the
Company and its subsidiaries, considered as one entity (any such change is called a “Material
Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have not
incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in the ordinary
course of business; and (iii) there has been no dividend or distribution of any kind declared, paid
or made by the Company or, except for dividends paid to the Company or other subsidiaries, any of
its subsidiaries on any class of capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock.

-7-

 

     (r) No Further Authorizations or Approvals Required. No consent, approval, authorization or
other order of, or registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s and the Guarantors’ execution, delivery and
performance of this Agreement, the Registration Rights Agreement, the DTC Agreement or the
Indenture, or the issuance and delivery of the Securities or the Exchange Securities, or
consummation of the transactions contemplated hereby and thereby and by the Offering Memorandum,
except such as have been obtained or made by the Company and the Guarantors
and are in full force and effect under the Securities Act, applicable securities laws of the
several states of the United States or provinces of Canada and except such as may be required by
the securities laws of the several states of the United States or provinces of Canada with respect
to the Company’s and the Guarantors’ obligations under the Registration Rights Agreement.

     (s) No Conflicts. None of the execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement and the DTC Agreement, the issuance and sale of the
Securities or the Exchange 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, (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 of their properties or assets,
except, with respect to clauses (i) and (iii), for such conflicts, breaches, violations or defaults
that do not have a Material Adverse Effect.

     (t) Historical Financial Statements. The historical financial statements of the Company
(including the related notes and supporting schedules) included in or incorporated by reference in
the Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering
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) Selected Financial Data. The selected financial data set forth under the caption
“Selected Consolidated Financial and Operating Data” in the Pricing Disclosure Package, any Company
Additional Written Communication and the Final Offering Memorandum fairly present in all material
respects, on the basis stated in the Pricing Disclosure Package, any Company Additional Written
Communication and the Final Offering Memorandum, the information included therein.

-8-

 

     (v) Other Financial Data and Statistical Information. The other financial data, operating
data and statistical information and data of the Company included in or incorporated by reference
in the Pricing Disclosure Package, any Company Additional Written Communication and the Final
Offering 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.

     (w) Independent Accountants. Ernst & Young LLP, who has certified certain historical
financial statements of the Company, whose reports are incorporated by reference in the Pricing
Disclosure Package, any Company Additional Written Communication and the Final Offering Memorandum
and who (a) has delivered the initial letter referred to in Section 5(a) hereof and (b) will
deliver on the Closing Date the bring-down letter referred to in Section 5(a) hereof, is an
independent registered public accounting firm within the meaning of Regulation S-X under the
Securities Act and the Exchange Act and the rules of the Public Company Accounting Oversight Board
during the periods covered by the financial statements on which it reported that were or are
incorporated by reference in the Pricing Disclosure Package, any Company Additional Written
Communication and the Final Offering Memorandum. Any non-audit services provided by Ernst & Young
LLP to the Company or any of the Guarantors have been approved by the Audit Committee of the Board
of Directors of the Company.

     (x) No Material Actions or Proceedings. 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 Company’s knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.

     (y) Intellectual Property. Except as would not have a Material Adverse Effect, the Company,
the Guarantors and 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.

     (z) Property. 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 Pricing Disclosure Package, any Company Additional Written
Communication and the Final Offering 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

-9-

 

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 in each case except as disclosed in
the Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering
Memorandum.

     (aa) No Taxes. 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.

     (bb) No Prohibition or Dividends. No subsidiary of the Company or any Guarantor 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 Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering
Memorandum (exclusive of any amendment or supplement thereto).

     (cc) All Necessary Permits, etc. Except as set forth in or contemplated in the Pricing
Disclosure Package, any Company Additional Written Communication and the Final Offering Memorandum
(exclusive of any amendment or supplement thereto) and except as would not have a Material Adverse
Effect, the Company, the Guarantors and each of its and their respective subsidiaries possess such
valid and current certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies 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, or non-compliance with,
any such certificate, authorization or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

     (dd) Accounting Controls. The Company, the Guarantors and its and their respective
subsidiaries maintain a system of internal accounting controls that is in compliance in all
material respects with the Sarbanes-Oxley Act (as defined below) and is 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.

-10-

 

     (ee) Tax Law Compliance. 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 (except in any case in which the failure to do so would not have a
Material Adverse Effect) and has paid all taxes due thereon, except with respect to any assessment
that is currently being contested in good faith or as would not have a Material Adverse Effect, and
no tax deficiency has been determined adversely to the Company, the Guarantors or any of its or
their respective subsidiaries 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. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in Section 1(t) hereof in respect of
all federal, state and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally determined.

     (ff) Insurance. To the extent not self-insured, 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; and to the extent the
Company or any of its subsidiaries is self-insured, such entity is self-insured against losses in a
manner that such entity believes is commercially reasonable. The Company has no reason to believe
that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted and at a cost that would not
result in a Material Adverse Effect. Neither of the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.

     (gg) Solvency. The Company and the Guarantors on a consolidated basis are, and immediately
after the Closing Date will be, Solvent. As used herein, the term “Solvent” means, with respect to
any person on a particular date, that on such date (i) the fair market value of the assets of such
person is greater than the total amount of liabilities (including contingent liabilities) of such
person, (ii) the present fair salable value of the assets of such person is greater than the amount
that will be required to pay the probable liabilities of such person on its debts as they become
absolute and matured, (iii) such person is able to realize upon its assets and pay its debts and
other liabilities, including contingent obligations, as they mature and (iv) such person does not
have unreasonably small capital.

     (hh) Labor Matters. 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 reasonably be
expected to have a Material Adverse Effect.

     (ii) ERISA Matters. 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

-11-

 

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 reasonably be expected to 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 reasonably be expected to cause the loss of such
qualification. Set forth on Exhibit A hereto is a list of each employee pension or benefit plan
with respect to which the Company or any Guarantor is a party in interest or disqualified person.

     (jj) Regulations T, U, X. None of the Company, the Guarantors or any of their respective
subsidiaries or any agent thereof acting on their behalf has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Securities to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

     (kk) Compliance with Environmental Laws. Except for such matters as would not, individually
or in the aggregate, either result in a Material Adverse Effect or require disclosure in the
Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering
Memorandum, the Company, the Guarantors and its or their respective subsidiaries (or, to the
knowledge of the Company, any of their predecessors in interest) (i) are conducting and have
conducted their businesses, operations and facilities in compliance with Environmental Law (as
defined below); (ii) possess, and are in compliance with, any and all permits, licenses or
registrations required under Environmental Law (“Environmental Permits”); (iii) 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
(iv) 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 (x)
emissions, discharges, releases or threatened releases of, or exposure to, Hazardous Substances,
(y) the generation, manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances, or (z) 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.

-12-

 

     (ll) Medicare, Medicaid, etc. Except as set forth or incorporated by reference in the Pricing
Disclosure Package, any Company Additional Written Communication and the Final Offering 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 (i) 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 program and corresponding regulations,
the Federal False Claims Act 31 U.S.C. § 3729-3733, the Federal Criminal False Claims Act, 18
U.S.C. Section 287, False Statements Relating to Health Care Matters, 18 U.S.C. Section 1035,
Health Care Fraud, 18 U.S.C. Section 1347, or the privacy, security and transactions provisions of
the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191), 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; (ii) has had a
civil monetary penalty assessed against it under Section 1128A of the Social Security Act (“SSA”);
(iii) 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 (iv) has been convicted (as that
term is defined in 42 C.F.R. § 1001.2) of any of the categories of offenses described in SSA
Section 1128(a) and (b)(1), (2) and (3).

     (mm) Except as set forth or incorporated by reference in the Pricing Disclosure Package, any
Company Additional Written Communication and the Final Offering Memorandum (exclusive of any
amendment or supplement thereto), (i) the Company, the Guarantors and their respective subsidiaries
possess all required permits, licenses, provider numbers, certificates, approvals (including,
without limitation, certificate of need approvals), consents, orders, certifications (including,
without limitation, certification under the Medicare, Medicaid, Tricare programs and other
governmental healthcare programs in which they participate), accreditations (including, without
limitation, accreditation by The Joint Commission) and other authorizations (collectively,
“Governmental Licenses”) issued by, and have made all required declarations and filings
with, the appropriate federal, state or local regulatory agencies or bodies and accreditation
organizations necessary to conduct the business now operated by them, except where the failure to
possess such Governmental Licenses or to make such declarations and filings would not reasonably be
expected to result in a Material Adverse Effect; (ii) the Company, the Guarantors and their
respective subsidiaries are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; (iii) all of the Governmental
Licenses are valid and in full force and effect, except where the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force and effect would not
reasonably be expected to result in a Material Adverse Effect and (iv) none of the Company, the
Guarantors or any of their respective subsidiaries has received any notice of proceedings relating
to the revocation or

-13-

 

modification of any such Governmental Licenses which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be
expected to result in a Material Adverse Effect.

     (nn) Investment Company Act. The Company has been advised of the rules and requirements under
the Investment Company Act of 1940, as amended (the “Investment Company Act,” which term, as used
herein, includes the rules and regulations of the Commission promulgated thereunder). None of the
Company, the Guarantors or any of their respective subsidiaries is, or after giving effect to the
offering and sale of the Notes and the application of the proceeds thereof as described in the
Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering Memorandum will be required to register as an “investment
company” as defined in the Investment Company Act.

     (oo) Minutes. The minute books and records of the Company relating to proceedings of its
stockholders, board of directors and committees of its board of directors made available to Cahill
Gordon and Reindel llp, counsel for the Initial Purchaser, are the original minute books
and records or are true, correct and complete copies thereof, with respect to all proceedings of
said stockholders, board of directors and committees since April 30, 2006, through the date hereof.
In the event that definitive minutes have not been prepared with respect to any proceedings of
such stockholders, board of directors or committees, the Company has provided Cahill Gordon and
Reindel 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.

     (pp) Disclosure Requirements. The statements contained or incorporated by reference in (i)
the Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering
Memorandum under the captions “Description of the Notes”, “Description of Other Indebtedness”,
“Notice to Investors”, “Plan of Distribution” and “Certain 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, 2008 under the caption “Regulation and Other Factors”, in each case as amended and
supplemented by statements contained in the Pricing Disclosure Package, any Company Additional
Written Communication and the Final Offering Memorandum or documents incorporated by reference in
the Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering
Memorandum (exclusive in each case of any amendment or supplement thereto) insofar as such sections
purport to constitute a summary of the terms of the Securities, legal matters, agreements,
documents or proceedings discussed therein are accurate in all material aspects and comply in all
material respects with the requirements of the Exchange Act.

     (qq) Exchange Act Compliance. The Company is subject to and in compliance in all material
respects 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.

-14-

 

     (rr) Effectiveness of Disclosure Controls. The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-14 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.

     (ss) Evaluation of Disclosure Controls and Procedures. Based on the most recent 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. 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 could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and material weaknesses.

     (tt) Sarbanes-Oxley Compliance. 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 in all
material respects 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 Sections 302 and 906 related to certifications.

     (uu) No Brokerage Fees. Except as disclosed or incorporated by reference in the Pricing
Disclosure Package, any Company Additional Written Communication and the Final Offering 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.

     (vv) Statistical Data. The statistical, market-related and industry data and forward-looking
statements included or incorporated by reference in the Pricing Disclosure Package, any Company
Additional Written Communication and the Final Offering Memorandum are based upon estimates by the
Company derived from sources that the Company believes to be reliable and accurate in all material
respects and represent their good faith estimates that are made on the basis of data derived from
such sources.

     (ww) Related Party Transactions. No relationship, direct or indirect, exists between or among
the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders
or other affiliates of the Company or any of its subsidiaries, on the other, that would

-15-

 

be required
by the Securities Act to be described in a registration statement to be filed with the Commission
and that is not so described in each of the Pricing Disclosure Package and the Final Offering
Memorandum.

     (xx) No Unlawful Contributions or Other Payments. Except as otherwise disclosed or
incorporated by reference in the Pricing Disclosure Package, any Company Additional Written
Communication and the Final Offering Memorandum, none of the Company, the Guarantors nor any of
their respective subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company
or any subsidiary, has made any contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of the character necessary to be
disclosed or incorporated by reference in the Pricing Disclosure Package, any Company Additional Written Communication and the Final Offering Memorandum in order to make the
statements therein not misleading.

     (yy) No Default in Senior Indebtedness. No event of default exists under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or instrument constituting
Senior Indebtedness (as defined in the Indenture).

     (zz) No Conflict with Money Laundering Laws. The operations of the Company, the Guarantors or
any of their respective subsidiaries are and have been conducted at all times in material
compliance with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all
applicable jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company, the
Guarantors or any of their respective subsidiaries with respect to the Money Laundering Laws is
pending or, to the Company’s knowledge, threatened.

     (aaa) No Conflict with OFAC Laws. None of the Company, the Guarantors or any of their
respective subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee
or Affiliate of the Company, the Guarantors or any of their respective subsidiaries is currently
subject to any sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering of the Notes hereunder, or lend, contribute or otherwise make available
such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose
of financing the activities of any person currently subject to any U.S. sanctions administered by
OFAC.

     (bbb) No Conflict with FCPA Laws. None of (i) the Company, the Guarantors or any of its or
their subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or
Affiliate of the Company, the Guarantors or any of its or their subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the
“FCPA”), including, without limitation, making use of the mails or any means or

-16-

 

instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA; and (ii) the Company, the Guarantors, its or their subsidiaries and, to
the knowledge of the Company, any Affiliate of the Company have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and procedures designed to
ensure, and which are reasonably expected to continue to ensure, continued compliance therewith,
except in the case of clauses (i) and (ii), as would not have a Material Adverse Effect.

     (ccc) Regulation S. The Company, the Guarantors and their respective affiliates and all
persons acting on their behalf (other than the Initial Purchasers, as to whom the Company and the
Guarantors make no representation) have complied with and will comply with the offering
restrictions requirements of Regulation S in connection with the offering of the Securities outside
the United States and, in connection therewith, the Offering Memorandum will contain the disclosure
required by Rule 902. Each of the Company and the Guarantors is a “reporting issuer”, as defined
in Rule 902 under the Securities Act.

     Any certificate signed by an officer of the Company or any Guarantor and delivered to the
Initial Purchasers or to counsel for the Initial Purchasers, in connection with the transactions
contemplated by this Agreement, shall be deemed to be a representation and warranty by the Company
or such Guarantor to the Initial Purchasers as to the matters set forth therein.

     SECTION 2. Purchase, Sale and Delivery of the Securities.

     (a) The Securities. Each of the Company and the Guarantors agrees to issue and sell to the
Initial Purchasers, severally and not jointly, all of the Notes, and the Initial Purchasers agree,
severally and not jointly, to purchase from the Company and the Guarantors the aggregate principal
amount of Notes set forth opposite their names on Schedule A, at a purchase price of 86.895% of the
principal amount thereof payable on the Closing Date, in each case, on the basis of the
representations, warranties and agreements herein contained, and upon the terms, subject to the
conditions thereto, herein set forth.

     (b) The Closing Date. Delivery of certificates for the Notes in definitive form to be
purchased by the Initial Purchasers and payment therefor shall be made at the offices of Cahill
Gordon and Reindel llp, 80 Pine Street, New York, New York 10005 (or such other place as
may be agreed to by the Company and the Representative) at 9:00 a.m. New York City time, on May 7,
2009 or such other time and date as the Representative shall designate by notice to the Company
(the time and date of such closing are called the “Closing Date”).

     (c) Delivery of the Securities. The Company shall deliver, or cause to be delivered, to the
Representative for the accounts of the several Initial Purchasers certificates for the Notes at the
Closing Date against the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Notes shall be in

-17-

 

such
denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to
the DTC Agreement, and shall be made available for inspection on the business day preceding the
Closing Date at a location in New York City, as the Representative may designate. Time shall be of
the essence, and delivery at the time and place specified in this Agreement is a further condition
to the obligations of the Initial Purchasers.

     (d) Initial Purchasers as Qualified Institutional Buyers. Each Initial Purchaser, severally
and not jointly, represents and warrants to, and agrees with, the Company that it is a “qualified
institutional buyer” within the meaning of Rule 144A (a “Qualified Institutional Buyer”).

     SECTION 3. Additional Covenants. Each of the Company and the Guarantors further covenants and
agrees with each Initial Purchaser as follows:

     (a) Preparation of Final Offering Memorandum; Initial Purchasers’ Review of Proposed
Amendments and Supplements and Company Additional Written Communications. As promptly as
practicable following the Time of Sale and in any event not later than the second business day
following the date hereof, the Company will prepare and deliver to the Initial Purchasers the Final
Offering Memorandum, which shall consist of the Preliminary Offering Memorandum as modified only by
the information contained in the Pricing Supplement. The Company will not amend or supplement the
Preliminary Offering Memorandum or the Pricing Supplement. The Company will not amend or
supplement the Final Offering Memorandum prior to the Closing Date unless the Representative shall
previously have been furnished a copy of the proposed amendment or supplement at least two business
days prior to the proposed use or filing, and shall not have objected to such amendment or
supplement. Before making, preparing, using, authorizing, approving or distributing any Company
Additional Written Communication, the Company will furnish to the Representative a copy of such
written communication for review and will not make, prepare, use, authorize, approve or distribute
any such written communication to which the Representative reasonably objects.

     (b) Amendments and Supplements to the Final Offering Memorandum and Other Securities Act
Matters. If, prior to the later of (x) the Closing Date and (y) the completion of the placement of
the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the Final Offering
Memorandum, as then amended or supplemented, in order to make the statements therein, in the light
of the circumstances when the Final Offering Memorandum is delivered to a Subsequent Purchaser, not
misleading, or if it is otherwise necessary to amend or supplement the Final Offering Memorandum to
comply with law, the Company agrees to promptly prepare (subject to Section 3 hereof), and furnish
at its own expense to the Initial Purchasers, amendments or supplements to the Final Offering
Memorandum so that the statements in the Final Offering Memorandum as so amended or supplemented
will not, in the light of the circumstances at the Closing Date and at the time of sale of
Securities, be misleading or so that the Final Offering Memorandum, as amended or supplemented,
will comply with all applicable law.

-18-

 

     If required under the Registration Rights Agreement, following the consummation of the
Exchange Offer or the effectiveness of an applicable shelf registration statement and for so long
as the Securities are outstanding if, in the judgment of the Representative, the Initial Purchasers
or any of their affiliates (as such term is defined in the Securities Act) are required to deliver
a prospectus in connection with sales of, or market-making activities with respect to, the
Securities, to periodically amend the applicable registration statement so that the information
contained therein complies with the requirements of Section 10 of the Securities Act, to amend the
applicable registration statement or supplement the related prospectus or the documents
incorporated therein when necessary to reflect any material changes in the information provided
therein so that the registration statement and the prospectus will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing as of the date the prospectus is so delivered,
not misleading and to provide the Initial Purchasers with copies of each amendment or supplement filed
and such other documents as the Initial Purchasers may reasonably request.

     The Company hereby expressly acknowledges that the indemnification and contribution provisions
of Sections 8 and 9 hereof are specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to in this Section 3.

     (c) Copies of the Offering Memorandum. The Company agrees to furnish the Initial Purchasers,
without charge, as many copies of the Pricing Disclosure Package and the Final Offering Memorandum
and any amendments and supplements thereto as they shall reasonably request.

     (d) Blue Sky Compliance. Each of the Company and the Guarantors shall cooperate with the
Representative and counsel for the Initial Purchasers to qualify or register (or to obtain
exemptions from qualifying or registering) all or any part of the Securities for offer and sale
under the securities laws of the several states of the United States, the provinces of Canada or
any other jurisdictions designated by the Representative, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as required for the
distribution of the Securities. None of the Company or any of the Guarantors shall be required to
qualify as a foreign corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it would be subject
to taxation as a foreign corporation. The Company will advise the Initial Purchasers promptly of
the suspension of the qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, each of the Company and the Guarantors shall use its best
efforts to obtain the withdrawal thereof at the earliest possible moment.

     (e) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Securities
sold by it in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure
Package.

-19-

 

     (f) The Depositary. The Company will cooperate with the Initial Purchasers and use its
reasonable best efforts to permit the Securities to be eligible for clearance and settlement
through the facilities of the Depositary.

     (g) Additional Issuer Information. Prior to the completion of the placement of the Securities
by the Initial Purchasers with the Subsequent Purchasers, the Company shall file, on a timely
basis, with the Commission and the Nasdaq National Market all reports and documents required to be
filed under Section 13 or 15 of the Exchange Act. Additionally, at any time when the Company is
not subject to Section 13 or 15 of the Exchange Act, for the benefit of holders and beneficial
owners from time to time of the Securities, the Company shall furnish, at its expense, upon
request, to holders and beneficial owners of Securities and prospective purchasers of
Securities information (“Additional Issuer Information”) satisfying the requirements of
Rule 144A(d).

     (h) Agreement Not To Offer or Sell Additional Securities. During the period of 90 days
following the date hereof, the Company will not, without the prior written consent of Banc of
America Securities LLC (which consent may be withheld at the sole discretion of Banc of America
Securities LLC), directly or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any debt securities of the Company
or securities exchangeable for or convertible into debt securities of the Company (other than as
contemplated by this Agreement and to register the Exchange Securities).

     (i) Future Reports to the Initial Purchasers. At any time when the Company is not subject to
Section 13 or 15 of the Exchange Act and any Securities or Exchange Securities remain outstanding,
the Company will furnish to the Representative and, upon request, to each of the other Initial
Purchasers: (i) as soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the close of such fiscal
year and statements of income, stockholders’ equity and cash flows for the year then ended and the
opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon
as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the Financial Industry Regulatory Authority, Inc. (“FINRA”) or any
securities exchange; and (iii) as soon as available, copies of any report or communication of the
Company mailed generally to holders of its capital stock or debt securities (including the holders
of the Securities), if, in each case, such documents are not filed with the Commission within the
time periods specified by the Commission’s rules and regulations under Section 13 or 15 of the
Exchange Act.

     (j) No Integration. The Company agrees that it will not and will cause its Affiliates not to
make any offer or sale of securities of the Company of any class if, as a result of the doctrine of
“integration” referred to in Rule 502 under the Securities Act, such offer or sale would render
invalid (for the purpose of (i) the sale of the Securities by the Company to the Initial
Purchasers, (ii) the resale of the Securities by the Initial Purchasers to Subsequent

-20-

 

Purchasers or
(iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof or by Rule 144A or
by Regulation S thereunder or otherwise.

     (k) No General Solicitation or Directed Selling Efforts. None of the Company or any of its
affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as
to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by
means of any form of general solicitation or general advertising within the meaning of Rule 502(c)
of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act or (ii) engage in any directed selling efforts within the meaning of
Regulation S, and all such persons will comply with the offering restrictions requirement of
Regulation S.

     (l) No Restricted Resales. During the period of one year after the Closing Date, the Company
will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities
Act) to resell any of the Notes which constitute “restricted securities” under Rule 144 that have
been reacquired by any of them.

     (m) Legended Securities. Each certificate for a Security will bear the legend contained in
“Notice to Investors” in the Preliminary Offering Memorandum for the time period and upon the other
terms stated in the Preliminary Offering Memorandum.

     The Representative, on behalf of the several Initial Purchasers, may, in its sole discretion,
waive in writing the performance by the Company or any Guarantor of any one or more of the
foregoing covenants or extend the time for their performance.

     SECTION 4. Payment of Expenses. Each of the Company and the Guarantors, jointly and
severally, agrees to pay all costs, fees and expenses incurred in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated hereby,
including, without limitation, (i) all expenses incident to the issuance and delivery of the
Securities (including all printing and engraving costs), (ii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’ counsel, independent
public or certified public accountants and other advisors, (iv) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of the Pricing
Disclosure Package and the Final Offering Memorandum (including financial statements and exhibits),
and all amendments and supplements thereto, this Agreement, the Registration Rights Agreement, the
Indenture, the DTC Agreement and the Securities, (v) all filing fees, attorneys’ fees and expenses
incurred by the Company, the Guarantors or the Initial Purchasers in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of) all or any part of
the Securities for offer and sale under the securities laws of the several states of the United
States, the provinces of Canada or other jurisdictions designated by the Initial Purchasers
(including, without limitation, the cost of preparing, printing and mailing preliminary and final
blue sky or legal investment memoranda and any related supplements to the Pricing Disclosure
Package or the Final Offering Memorandum, (vi) the fees and expenses of the Trustee, including

-21-

 

the
fees and disbursements of counsel for the Trustee in connection with the Indenture, the Securities
and the Exchange Securities, (vii) any fees payable in connection with the rating of the Securities
or the Exchange Securities with the ratings agencies, (viii) any filing fees incident to the review
by FINRA, if any, of the terms of the sale of the Securities or the Exchange Securities, and (ix)
all fees and expenses (including reasonable fees and expenses of counsel) of the Company and the
Guarantors in connection with approval of the Securities by the Depositary for “book-entry”
transfer, and the performance by the Company and the Guarantors of their respective other
obligations under this Agreement counsel and (x) all expenses incident to the “road show” for the
offering of the Securities. Except as provided in this Section 4 and Sections 6, 8 and 9 hereof,
the Initial Purchasers shall pay their own expenses, including the fees and disbursements of
their counsel.

     SECTION 5. Conditions of the Obligations of the Initial Purchasers. The obligations of the
several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing
Date shall be subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Company of its covenants and
other obligations hereunder, and to each of the following additional conditions:

     (a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers shall have
received from Ernst & Young LLP, independent public or certified public accountants for the
Company, a “comfort letter” dated the date hereof addressed to the Initial Purchasers,
in form and substance satisfactory to the Representative, covering the financial information in the
Preliminary Offering Memorandum and the Pricing Supplement and other customary matters. In
addition, on the Closing Date, the Initial Purchasers shall have received from such accountants, a
“bring-down comfort letter” dated the Closing Date addressed to the Initial Purchasers, in form and
substance satisfactory to the Representative, in the form of the “comfort letter” delivered on the
date hereof, except that (i) it shall cover the financial information in the Final Offering
Memorandum and any amendment or supplement thereto and (ii) procedures shall be brought down to a
date no more than 5 days prior to the Closing Date.

     (b) No Material Adverse Change or Ratings Agency Change. For the period from and after the
date of this Agreement and prior to the Closing Date:

     (i) in the judgment of the Representative there shall not have occurred any Material
Adverse Change; and

     (ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded the Company
or any of its subsidiaries or any of their securities or indebtedness by any “nationally
recognized statistical rating organization” as such term is defined for purposes of Rule 436
under the Securities Act.

-22-

 

     (c) Opinion of Counsel for the Company. On the Closing Date the Initial Purchasers shall have
received the opinion of Waller Lansden Dortch & Davis, LLP, counsel for the Company, dated as of
such Closing Date, the form of which is attached as Exhibit B.

     (d) Opinion of Counsel for the Initial Purchasers. On the Closing Date the Initial Purchasers
shall have received the opinion of Cahill Gordon and Reindel llp, counsel for the Initial
Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably
requested by the Initial Purchasers.

     (e) Officers’ Certificate. On the Closing Date the Initial Purchasers shall have received a
written certificate executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and each Guarantor and the Chief Financial Officer or Chief Accounting Officer of the
Company and each Guarantor, dated as of the Closing Date, to the effect set forth in
Section 5(b)(ii) hereof, and further to the effect that:

     (i) for the period from and after the date of this Agreement and prior to the Closing
Date there has not occurred any Material Adverse Change;

     (ii) the representations, warranties and covenants of the Company set forth in
Section 1 hereof were true and correct in all material respects as of the date hereof and
are true and correct in all material respects as of the Closing Date with the same force and
effect as though expressly made on and as of the Closing Date; and

     (iii) the Company has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date.

     (f) Registration Rights Agreement. The Company shall have entered into the Registration
Rights Agreement and the Initial Purchasers shall have received executed counterparts thereof.

     (g) Depositary. The Securities shall be eligible for clearance and settlement through the
Depositary.

     (h) Additional Documents. On or before the Closing Date, the Initial Purchasers and counsel
for the Initial Purchasers shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance and sale of the
Securities as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or agreements, herein
contained.

     If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representative by notice to the Company at any
time on or prior to the Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Sections 4, 6, 8 and 9 hereof shall at all times be
effective and shall survive such termination.

-23-

 

     SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by
the Representative pursuant to Section 5 or 10 hereof, including if the sale to the Initial
Purchasers of the Securities on the Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein or to comply with
any provision hereof other than by reason of a default by any of the Initial Purchasers, the
Company agrees to reimburse the Initial Purchasers, severally, upon demand for all out-of-pocket
expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the
proposed purchase and the offering and sale of the Securities, including, without limitation, fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.

     SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on the one
hand, and the Company and each of the Guarantors, on the other hand, hereby agree to observe the
following procedures in connection with the offer and sale of the Securities:

     (A) Offers and sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof qualified to do so in the jurisdictions in which such offers or sales are
made. Each such offer or sale shall only be made to persons whom the offeror or seller
reasonably believes to be Qualified Institutional Buyers or non-U.S. persons outside the
United States to whom the offeror or seller reasonably believes offers and sales of the
Securities may be made in reliance upon Regulation S upon the terms and conditions set forth
in Annex I hereto, which Annex I is hereby expressly made a part hereof.

     (B) The Securities will be offered by approaching prospective Subsequent Purchasers on
an individual basis. No general solicitation or general advertising (within the meaning of
Rule 502 under the Securities Act) will be used in the United States in connection with the
offering of the Securities.

     (C) Upon original issuance by the Company, and until such time as the same is no longer
required under the applicable requirements of the Securities Act, the Securities (and all
securities issued in exchange therefor or in substitution thereof, other than the Exchange
Securities) shall bear the following legend:

“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A

-24-

 

THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN CLAUSE (A) ABOVE. NO REPRESENTATION CAN BE
MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE
OF THE SECURITY EVIDENCED HEREBY.”

     Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchasers shall not be liable or responsible to the
Company for any losses, damages or liabilities suffered or incurred by the Company, including any
losses, damages or liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.

     SECTION 8. Indemnification.

     (a) Indemnification of the Initial Purchaser. Each of the Company and the Guarantors, jointly
and severally, agrees to indemnify and hold harmless each Initial Purchaser, its directors,
officers and employees, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which such Initial Purchaser, director, officer, employee or controlling
person may become subject, under the Securities Act, the Exchange Act or other

-25-

 

federal or state
statutory law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the Company or without the
written consent of the Company as contemplated by Section 8(d)), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or
is based: (i) upon any untrue statement or alleged untrue statement of a material fact contained
in the Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional Written
Information or the Final Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; or (ii) in
whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iii) in whole or in part upon any failure of the
Company to perform its obligations hereunder or under law; or (iv) any act or failure to act or any
alleged act or failure to act by any Initial Purchaser in connection with, or relating in any
manner to, the offering contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter covered by clause
(i) above, provided that the Company shall not be liable under this clause (iv) to the extent that
a court of competent jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Initial Purchaser through its gross negligence or willful misconduct;
and to reimburse each Initial Purchaser and each such director, officer, employee or controlling
person for any and all expenses (including the fees and disbursements of counsel chosen by Banc of
America Securities LLC) as such expenses are reasonably incurred by such Initial Purchaser or such
director, officer, employee or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising out of or based upon
any untrue statement or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company by the Representative
expressly for use in the Preliminary Offering Memorandum, the Pricing Supplement, any Company
Additional Written Information or the Final Offering Memorandum (or any amendment or supplement
thereto). The indemnity agreement set forth in this Section 8(a) shall be in addition to any
liabilities that the Company may otherwise have.

     (b) Indemnification of the Company and the Guarantors. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, each Guarantor, each of
their respective directors, officers and employees and each person, if any, who controls the
Company or any Guarantor within the meaning of the Securities Act or the Exchange Act, against any
loss, claim, damage, liability or expense, as incurred, to which the Company, any Guarantor or any
such director, officer, employee or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is effected with the
written consent of such Initial Purchaser), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or is based

-26-

 

upon any
untrue statement or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, the Pricing Supplement, any Company Additional Written Information or the
Final Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Preliminary Offering Memorandum, the Pricing Supplement, any
Company Additional Written Information or the Final Offering Memorandum (or any amendment or
supplement thereto), in reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser through the Representative expressly for use therein; and to
reimburse the Company, any Guarantor and each such director,
officer, employee or controlling person for any and all expenses (including the fees and
disbursements of counsel) as such expenses are reasonably incurred by the Company, any Guarantor or
such director or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action. Each of the
Company and the Guarantors hereby acknowledges that the only information that the Initial
Purchasers through the Representative have furnished to the Company expressly for use in the
Preliminary Offering Memorandum, the Pricing Supplement, any Company Additional Written Information
or the Final Offering Memorandum (or any amendment or supplement thereto) are the statements set
forth in the third, seventh, eighth and tenth paragraphs and the second sentence under the sixth
paragraph under the caption “Plan of Distribution” in the Preliminary Offering Memorandum and the
Final Offering Memorandum. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that each Initial Purchaser may otherwise have.

     (c) Notifications and Other Indemnification Procedures. 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 an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 8 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the positions
of the indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate

-27-

 

counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party under this Section 8
for any legal or other expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one separate counsel (together
with local counsel), approved by the indemnifying party (Banc of America Securities LLC in the case
of Sections 8(b) and 9 hereof), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time after
notice of commencement of the action, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.

     (d) Settlements. The indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by this Section 8, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request or disputed in good faith the indemnified party’s entitlement to
such reimbursement prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement, compromise or consent to the
entry of judgment in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or consent (i) includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding and (ii) does not include any statements as to or any
findings of fault, culpability or failure to act by or on behalf of any indemnified party.

     SECTION 9. Contribution. If the indemnification provided for in Section 8 hereof is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Securities pursuant to this Agreement or (ii) if the allocation

-28-

 

provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
in connection with the statements or omissions or inaccuracies in the representations and
warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received by the Company and
the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in connection with
the offering of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Securities pursuant to
this Agreement (before deducting expenses) received by the Company, and the total discount received
by the Initial Purchasers bear to the aggregate initial offering price of the Securities. The
relative fault of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, shall be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company and the Guarantors, on the one hand, or the Initial Purchasers,
on the other hand, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or inaccuracy.

     The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8 hereof, any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however, that no additional notice shall
be required with respect to any action for which notice has been given under Section 8 hereof for
purposes of indemnification.

     The Company, the Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation even if
the Initial Purchasers were treated as one entity for such purpose or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
9.

     Notwithstanding the provisions of this Section 9, no Initial Purchasers shall be required to
contribute any amount in excess of the discount received by such Initial Purchaser in connection
with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to
contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective
commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each
director, officer and employee of an Initial Purchaser and each person, if any, who controls an
Initial Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as such Initial Purchaser, and each director, officer and employee of

-29-

 

the
Company or any Guarantor, and each person, if any, who controls the Company or any Guarantor with
the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution
as the Company and the Guarantors.

     SECTION 10. Termination of This Agreement. Prior to the Closing Date, this Agreement may be
terminated by the Representative by notice given to the Company if at any time: (i) trading or
quotation in any of the Company’s securities shall have been suspended or limited by the Commission
or by the Nasdaq Stock Market, or trading in securities generally on either the Nasdaq Stock Market
or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such quotation system or stock exchange by the
Commission or FINRA; (ii) a general banking moratorium shall have been declared by any of federal,
New York or Delaware authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change in the United States
or international financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the Representative
is material and adverse and makes it impracticable or inadvisable to proceed with the offering,
sale or delivery of the Securities in the manner and on the terms described in the Pricing
Disclosure Package or to enforce contracts for the sale of securities; (iv) in the judgment of the
Representative there shall have occurred any Material Adverse Change; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character
as in the judgment of the Representative may interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section 10 shall be without liability on the part of (i) the Company
or any Guarantor to any Initial Purchaser, except that the Company and the Guarantors shall be
obligated to reimburse the expenses of the Initial Purchasers pursuant to Sections 4 and 6 hereof,
(ii) any Initial Purchaser to the Company, or (iii) any party hereto to any other party except that
the provisions of Sections 8 and 9 hereof shall at all times be effective and shall survive such
termination.

     SECTION 11. Representations and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company, the Guarantors, their
respective officers and the several 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 any Initial Purchaser, the Company, any Guarantor or any of their partners, officers or
directors or any controlling person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement.

     SECTION 12. Notices. All communications hereunder shall be in writing and shall be mailed,
hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:

-30-

 

     If to the Initial Purchasers:

	 	 	 	Banc of America Securities LLC

One Bryant Park

New York, New York 10036

Facsimile: (212) 901-7897

Attention: Legal Department

     with a copy to:

	 	 	 	Cahill Gordon and Reindel llp

80 Pine Street

New York, New York 10005
	 	 	 	Facsimile: (212) 269-5420

Attention:      James J. Clark and William J. Miller

     If to the Company or the Guarantors:

	 	 	 	Psychiatric Solutions, Inc.

6640 Carothers Parkway, Suite 500

Franklin, Tennessee 37067

Facsimile: (615) 312-5711

Attention: Christopher L. Howard, Esq.

     with a copy to:

	 	 	 	Waller Lansden Dortch & Davis, LLP

511 Union Street, Suite 2700

Nashville, Tennessee 37219

Facsimile: (615) 244-6804

Attention: James H. Nixon III, Esq.

     Any party hereto may change the address or facsimile number for receipt of communications by
giving written notice to the others.

     SECTION 13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto, and to the benefit of the indemnified parties referred to in Sections 8 and 9
hereof, and in each case their respective successors, and no other person will have any right or
obligation hereunder. The term “successors” shall not include any Subsequent Purchaser of other
purchaser of the Securities as such from any of the Initial Purchasers merely by reason of such
purchase.

     SECTION 14. Authority of the Representative. Any action by the Initial Purchasers hereunder
may be taken by Banc of America Securities LLC on behalf of the Initial Purchasers,

-31-

 

and any such
action taken by Banc of America Securities LLC shall be binding upon the Initial Purchasers.

     SECTION 15. Partial Unenforceability. The invalidity or unenforceability of any section,
paragraph or provision of this Agreement shall not affect the validity or enforceability of any
other section, paragraph or provision hereof. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.

     SECTION 16. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

     Any legal suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of
the United States of America located in the City and County of New York or the courts of the State
of New York located in the City and County of New York (collectively, the “Specified Courts”), and
each party irrevocably submits to the exclusive jurisdiction (except for suits, actions, or
proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a
Related Proceeding a “Related Judgment”, as to which such jurisdiction is non-exclusive) of the
Specified Courts in any Related Proceeding. Service of any process, summons, notice or document by
mail to such party’s address set forth above shall be effective service of process for any Related
Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any Specified Proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that
any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum.
Each party not located in the United States irrevocably appoints CT Corporation System, as its
agent to receive service of process or other legal summons for purposes of any Related Proceeding
that may be instituted in any Specified Court.

     SECTION 17. Default of One or More of the Several Initial Purchasers. If any one or more of
the several Initial Purchasers shall fail or refuse to purchase Securities that it or they have
agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other
Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities
set forth opposite their respective names on Schedule A bears to the aggregate number of Securities
set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other
proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting
Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on the Closing Date. If any one or more of the
Initial Purchasers shall fail or refuse to purchase Securities and the

-32-

 

aggregate number of
Securities with respect to which such default occurs exceeds 10% of the aggregate number of
Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial
Purchasers and the Company for the purchase of such Securities are not made within 48 hours after
such default, this Agreement shall terminate without liability of any party to any other party
except that the provisions of Sections 4, 6, 8 and 9 hereof shall at all times be effective and
shall survive such termination. In any such case either the Initial Purchasers or the Company
shall have the right to postpone the Closing Date, as the case may be, but in no event for longer
than seven days in order that the required changes, if any, to the Final Offering Memorandum or any
other documents or arrangements may be effected.

     As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any person
substituted for a defaulting Initial Purchaser under this Section 17. Any action taken under this
Section 17 shall not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

     SECTION 18. No Advisory or Fiduciary Responsibility. Each of the Company and the Guarantors
acknowledges and agrees that: (i) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the offering price of the Securities and any related
discounts and commissions, is an arm’s-length commercial transaction between the Company and the
Guarantors, on the one hand, and the several Initial Purchasers, on the other hand, and the Company
and the Guarantors are capable of evaluating and understanding and understand and accept the terms,
risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with
each transaction contemplated hereby and the process leading to such transaction each Initial
Purchaser is and has been acting solely as a principal and is not the agent or fiduciary of the
Company, Guarantors or their respective affiliates, stockholders, creditors or employees or any
other party; (iii) no Initial Purchaser has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company or any Guarantor with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser
has advised or is currently advising the Company or any Guarantor on other matters) or any other
obligation to the Company and the Guarantors except the obligations expressly set forth in this
Agreement; (iv) the several Initial Purchasers and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the Company and the
Guarantors and that the several Initial Purchasers have no obligation to disclose any of such
interests by virtue of any fiduciary or advisory relationship; and (v) the Initial Purchasers have
not provided any legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company and the Guarantors have consulted their own legal, accounting,
regulatory and tax advisors to the extent they deemed appropriate.

     The Company and the Guarantors hereby waive and release, to the fullest extent permitted by
law, any claims that the Company and the Guarantors may have against the Initial Purchasers with
respect to any breach or alleged breach of fiduciary duty.

     SECTION 19. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous

-33-

 

oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. The section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.

-34-

 

     If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.

Very truly yours,

	 	 	 	 	 
	 	PSYCHIATRIC SOLUTIONS, INC.

 	 
	 	By:  	/s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Executive Vice President 	 
	 

-35-

 

GUARANTORS:

ABS LINCS DC, LLC

ABS LINCS KY, INC.

ABS LINCS NJ, INC.

ABS LINCS PA, INC.

ABS LINCS SC, INC.

ABS LINCS TN, INC.

ABS LINCS TX, INC.

ABS LINCS VA, INC.

ABS LINCS, LLC

ABS-FIRST STEP, INC.

ALLIANCE CROSSINGS, LLC

ALLIANCE HEALTH CENTER, INC.

ALTERNATIVE BEHAVIORAL SERVICES, INC.

ATLANTIC SHORES HOSPITAL, LLC

BEHAVIORAL EDUCATIONAL SERVICES, INC.

BEHAVIORAL HEALTHCARE LLC

BENCHMARK BEHAVIORAL HEALTH SYSTEM, INC.

BHC ALHAMBRA HOSPITAL, INC.

BHC BELMONT PINES HOSPITAL, INC.

BHC CEDAR VISTA HOSPITAL, INC.

BHC FAIRFAX HOSPITAL, INC.

BHC FORT LAUDERDALE HOSPITAL, INC.

BHC FOX RUN HOSPITAL, INC.

BHC FREMONT HOSPITAL, INC.

BHC HEALTH SERVICES OF NEVADA, INC.

BHC HERITAGE OAKS HOSPITAL, INC.

BHC HOLDINGS, INC.

BHC INTERMOUNTAIN HOSPITAL, INC.

BHC MANAGEMENT SERVICES OF LOUISIANA, LLC

BHC MANAGEMENT SERVICES OF NEW MEXICO, LLC

BHC MANAGEMENT SERVICES OF STREAMWOOD,LLC

BHC MESILLA VALLEY HOSPITAL, LLC

BHC MONTEVISTA HOSPITAL, INC.

BHC NORTHWEST PSYCHIATRIC HOSPITAL, LLC

BHC PINNACLE POINTE HOSPITAL, INC.

BHC PROPERTIES, LLC

BHC SIERRA VISTA HOSPITAL, INC.

BHC SPIRIT OF ST. LOUIS HOSPITAL, INC.

 

 

BHC STREAMWOOD HOSPITAL, INC.

HUGHES CENTER, LLC

BRENTWOOD ACQUISITION, INC.

BRENTWOOD ACQUISITION-SHREVEPORT, INC.

BRYNN MARR HOSPITAL, INC.

BY THE SEA PHYSICIAN PRACTICE, LLC

CALVARY CENTER, INC.

CANYON RIDGE HOSPITAL, INC.

CEDAR SPRINGS HOSPITAL, INC.

CENTENNIAL PEAKS HOSPITAL, LLC

CHILDREN’S TREATMENT SOLUTIONS, LLC

COLLABORATIVE CARE LLC

COLUMBUS HOSPITAL PARTNERS, LLC

COLUMBUS HOSPITAL, LLC

COMMUNITY CORNERSTONES, INC.

COMPASS HOSPITAL, INC.

CRAWFORD FIRST EDUCATION, INC.

CUMBERLAND HOSPITAL, LLC

CUMBERLAND HOSPITAL PARTNERS, LLC

DIAMOND GROVE CENTER, LLC

EMPLOYEE ASSISTANCE SERVICES, INC.

FHCHS OF PUERTO RICO, INC.

FIRST CORRECTIONS – PUERTO-RICO, INC.

FIRST HOSPITAL CORPORATION OF NASHVILLE

FIRST HOSPITAL CORPORATION OF VIRGINIA BEACH

FIRST HOSPITAL PANAMERICANO, INC.

FORT LAUDERDALE HOSPITAL, INC.

GREAT PLAINS HOSPITAL, INC.

GULF COAST TREATMENT CENTER, INC.

H.C. CORPORATION

HAVENWYCK HOSPITAL INC.

HHC AUGUSTA, INC.

HHC BERKELEY, INC.

HHC CONWAY INVESTMENT, INC.

HHC COOPER CITY, INC.

HHC DELAWARE, INC.

HHC FOCUS FLORIDA, INC.

HHC INDIANA, INC.

HHC KINGWOOD INVESTMENT, LLC

HHC OCONEE, INC.

HHC OHIO, INC.

-2-

 

HHC POPLAR SPRINGS, INC.

HHC RIVER PARK, INC.

HHC SERVICES, LLC

HHC SOUTH CAROLINA, INC.

HHC ST. SIMONS, INC.

HHC TOLEDO, INC.

HMHM OF TENNESSEE, LLC

HOLLY HILL HOSPITAL, LLC

HORIZON BEHAVIORAL SERVICES, LLC

HORIZON HEALTH AUSTIN, INC.

HORIZON HEALTH CORPORATION

HORIZON HEALTH HOSPITAL SERVICES, LLC

HORIZON HEALTH PHYSICAL REHABILITATION SERVICES, LLC

HORIZON MENTAL HEALTH MANAGEMENT, LLC

HSA HILL CREST CORPORATION

HSA OF OKLAHOMA, INC.

INDIANA PSYCHIATRIC INSTITUTES, LLC

INFOSCRIBER CORPORATION

KIDS BEHAVIORAL HEALTH OF UTAH, INC.

KINGWOOD PINES HOSPITAL, LLC

KMI ACQUISITION, LLC

KOLBURN SCHOOL, LLC

LAKELAND BEHAVIORAL, LLC

LAUREL OAKS BEHAVIORAL HEALTH CENTER, INC.

LAURELWOOD ASSOCIATES, INC.

LEBANON HOSPITAL PARTNERS, LLC

LIBERTY POINT BEHAVIORAL HEALTHCARE, LLC

MENTAL HEALTH OUTCOMES, LLC

MESILLA VALLEY HOSPITAL, INC.

MESILLA VALLEY MENTAL HEALTH ASSOCIATES, INC.

MICHIGAN PSYCHIATRIC SERVICES, INC.

MISSION VISTA BEHAVIORAL HEALTH SERVICES, INC.

NASHVILLE REHAB, LLC

NORTH SPRING BEHAVIORAL HEALTHCARE, INC.

NORTHERN INDIANA PARTNERS, LLC

OCALA BEHAVIORAL HEALTH, LLC

-3-

 

PALMETTO BEHAVIORAL HEALTH HOLDINGS, LLC

PALMETTO BEHAVIORAL HEALTH SOLUTIONS, LLC

PALMETTO BEHAVIORAL HEALTH SYSTEM, L.L.C.

PALMETTO LOWCOUNTRY BEHAVIORAL HEALTH, L.L.C.

PALMETTO PEE DEE BEHAVIORAL HEALTH, L.L.C.

PEAK BEHAVIORAL HEALTH SERVICES, LLC

PREMIER BEHAVIORAL SOLUTIONS OF FLORIDA, INC.

PREMIER BEHAVIORAL SOLUTIONS, INC.

PRIDE INSTITUTE, INC.

PSYCHIATRIC MANAGEMENT RESOURCES, INC.

PSYCHIATRIC SOLUTIONS HOSPITALS, LLC

PSYCHIATRIC SOLUTIONS OF VIRGINIA, INC.

PSYCHMANAGEMENT GROUP, INC.

RAMSAY MANAGED CARE, LLC

RAMSAY YOUTH SERVICES OF GEORGIA, INC.

RAMSAY YOUTH SERVICES PUERTO RICO, INC.

RED ROCK BEHAVIORAL HEALTH LLC

RED ROCK SOLUTIONS, LLC

RESOURCES FOR LIVING, LLC

RIVEREDGE HOSPITAL HOLDINGS, INC.

RIVEREDGE HOSPITAL, INC.

ROCKFORD ACQUISITION SUB, INC.

ROLLING HILLS HOSPITAL, LLC

SAMSON PROPERTIES, LLC

SERVICIOS CONDUCTUALES DEL CARIBE, INC.

SHADOW MOUNTAIN BEHAVIORAL HEALTH SYSTEM, LLC

SOMERSET, INCORPORATED

SP BEHAVIORAL, LLC

SPRINGFIELD HOSPITAL, INC.

SUMMIT OAKS HOSPITAL, INC.

SUNSTONE BEHAVIORAL HEALTH, LLC

TBD ACQUISITION, LLC

-4-

 

TBJ BEHAVIORAL CENTER, LLC

TEXAS HOSPITAL HOLDINGS, INC.

TEXAS HOSPITAL HOLDINGS, LLC

THE COUNSELING CENTER OF MIDDLE TENNESSEE, INC.

THE NATIONAL DEAF ACADEMY, LLC

THE PINES RESIDENTIAL TREATMENT CENTER, INC.

THE VASQUEZ GROUP, INC.

THERAPEUTIC SCHOOL SERVICES, L.L.C.

THREE RIVERS BEHAVIORAL HEALTH, LLC

THREE RIVERS HEALTHCARE GROUP, LLC

THREE RIVERS RESIDENTIAL TREATMENT | MIDLANDS CAMPUS, INC.

THREE RIVERS SPE HOLDING, LLC

THREE RIVERS SPE MANAGER, INC.

THREE RIVERS SPE, LLC

TRANSITIONAL CARE VENTURES, INC.

TUCSON HEALTH SYSTEMS, INC.

UNIVERSITY BEHAVIORAL, LLC

VALLE VISTA HOSPITAL PARTNERS, LLC

VALLE VISTA, LLC

VIRGIN ISLANDS BEHAVIORAL SERVICES, INC.

WEKIVA SPRINGS CENTER, LLC

WELLSTONE HOLDINGS, INC.

WELLSTONE REGIONAL HOSPITAL

ACQUISITION, LLC

WILLOW SPRINGS, LLC

WINDMOOR HEALTHCARE, INC.

WINDMOOR HEALTHCARE OF PINELLAS PARK, INC.

WORK & FAMILY BENEFITS, INC.

ZEUS ENDEAVORS, LLC

	 	 	 	 	 
	 	 	 
	 	By:  	                     /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 

-5-

 

	 	 	 	 	 
	 	H.C. PARTNERSHIP

BY: H.C. CORPORATION

        HSA HILL CREST CORPORATION

	 
	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 
	 
	 	SHC-KPH, LP

BY: HHC KINGWOOD INVESTMENT, LLC

	 
	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 
	 
	 	BY: KINGWOOD PINES HOSPITAL, LLC
 	 
	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 

-6-

 

	 	 	 	 	 
	 	BHC OF INDIANA, GENERAL PARTNERSHIP

BY: COLUMBUS HOSPITAL PARTNERS, LLC

       LEBANON HOSPITAL PARTNERS, LLC

       NORTHERN INDIANA PARTNERS, LLC

       VALLE VISTA HOSPITAL PARTNERS, LLC	 
	 	 	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 
	 
	 	BLOOMINGTON MEADOWS, GENERAL PARTNERSHIP
 	 
	 
	 	BY:
BHC OF INDIANA, GENERAL PARTNERSHIP	 
	 
	 	BY: COLUMBUS HOSPITAL PARTNERS, LLC

       LEBANON HOSPITAL PARTNERS, LLC

       NORTHERN INDIANA PARTNERS, LLC

       VALLE VISTA HOSPITAL PARTNERS, LLC	 
	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 
	 
	 	BY: INDIANA PSYCHIATRIC INSTITUTES, LLC	 
	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 

-7-

 

	 	 	 	 	 
	 	HICKORY TRAIL HOSPITAL, L.P.

HIGH PLAINS BEHAVIORAL HEALTH, L.P.

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: TEXAS HOSPITAL HOLDINGS, LLC,

      as General Partner	 
	 
	 	By:  	                       /s/ Christopher L. Howard
 	 
	 	 	Name:  	Christopher L. Howard 	 
	 	 	Title:  	Vice President 	 

     The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchaser as
of the date first above written.

	 	 	 	 	 
	Banc of America Securities LLC	 	 
	 
	 	 	 	 
	By:

	 	 /s/ Christopher Kelly Wall
 

Name: Christopher Kelly Wall
	 	 
	 

	 	Title: Principal	 	 
	 
	 	 	 	 
	Barclays Capital Inc. 	 	 
	 
	 	 	 	 
	By:

	 	 /s/ Frank Williams
 

Name: Frank Williams
	 	 
	 

	 	Title: Managing Director	 	 

-8-

 

	 	 	 	 	 
	Citigroup Global Markets Inc. 	 	 
	 
	 	 	 	 
	By:

	 	 /s/ Stuart G. Dickson
 

Name: Stuart G. Dickson
	 	 
	 

	 	Title: Director	 	 
	 
	 	 	 	 
	J.P. Morgan Securities Inc. 	 	 
	 
	 	 	 	 
	By:

	 	 /s/ Lauren Camp
 

Name: Lauren Camp
	 	 
	 

	 	Title: Managing Director	 	 
	 
	 	 	 	 
	RBC Capital Markets Corporation 	 	 
	 
	 	 	 	 
	By:

	 	 /s/ David B. Capaldi
 

Name: David B. Capaldi
	 	 
	 

	 	Title: Managing Director	 	 

-9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]