Document:

Supply Agreement, dated August 23, 2005

 Exhibit 10.22 
  
 AMENDMENT NO. 1 
  
 TO 
  
 NOTE PURCHASE AND LINE OF CREDIT AGREEMENT 
  
 This AMENDMENT NO. 1 TO NOTE PURCHASE AND LINE OF CREDIT AGREEMENT (as amended, restated and otherwise modified from time to time, this
“Amendment”) is entered into as of May 25, 2004 and effective as of March 3, 2003 (the “Effective Date”), by and between SUNPOWER CORPORATION a California corporation (“Company”) with its principal
executive office at 430 Indio Way, Sunnyvale, California 94085 and CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation (“Purchaser”). 
  
 RECITALS 
  
 WHEREAS, Purchaser and Company are party to that certain Note Purchase and Line of Credit Agreement, dated as of May 30, 2002 (as amended, restated
or modified from time to time, the “Agreement”), pursuant to which, among other things: (i) Purchaser agreed to purchase certain unsecured senior convertible promissory notes from Company (each a “Note” and collectively
the “Notes”) under the terms set forth in Section 1 of the Agreement; (ii) Purchaser agreed to provide Company with cash borrowings, capital equipment, lines of credit or guarantees, up to an aggregate principal amount not to exceed
$25,000,000 (the “Maximum Amount”), as provided in Section 2 of the Agreement; and (iii) Company agreed to issue one or more warrants to purchase equity securities of Company under the terms and conditions set forth in the
Agreement. 
  
 WHEREAS, as of the date hereof, Company has
issued nine Notes in favor of Purchaser in an aggregate principal amount of $3,600,000 and pursuant to the terms of the Agreement, Company is no longer able to request borrowings from Purchaser pursuant to Section 1 of the Agreement. 
  
 WHEREAS, Purchaser has previously extended amounts pursuant to Section
2 of the Agreement pursuant to demand notes (the “Demand Notes”), which amounts are in the aggregate, in excess of the Maximum Amount, and now Company and Purchaser desire to amend certain provisions of the Agreement to: (i)
increase the Maximum Amount to $30,000,000; (ii) provide for the amendment and restatement of the Demand Notes into a single new note (as amended, restated or otherwise modified from time to time, the “Line of Credit Note”) to
reflect the increase in the Maximum Amount, and to revise and supplement certain other terms of the Demand Notes; (iii) provide for the issuance of a warrant to purchase common stock of Company relating to the increase in the Maximum Amount and in
replacement of any warrants previously issued under the Agreement and no longer outstanding; and (iv) make certain other amendments and modifications to the Agreement to reflect the terms of the lending arrangements between Company and Purchaser.

  
 AGREEMENT 
  
 NOW THEREFORE, in consideration of the foregoing, and the representations,
covenants and conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows: 
  
 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings, if any, assigned to such terms in the
Agreement. 

 2. Amendment of Agreement. Subject to the terms and conditions hereof, effective as of the
Effective Date, the Agreement is amended as follows: 
  
 (a)
Recital B to the Agreement is hereby amended by replacing “$25,000,000” in the third line of the recital with “$30,000,000 (the “Maximum Principal Amount).”. 
  
 (b) Section 1(a) of the Agreement is hereby amended by replacing the
words “Exhibit A” at the end of the third line, with the language “Exhibit A-1”. 
  
 (c) Section 2(a) of the Agreement is hereby amended by: (i) deleting the first sentence and replacing it with the following, “In addition to
the Notes referred to in Section 1 hereof, Purchaser may in its sole discretion, to the extent requested by Company: (i) provide cash advances to Company; (ii) provide Company with capital equipment for Company’s planned manufacturing facility
(“Capital Equipment”); (iii) provide Company with a line of credit, on commercially reasonable terms, to purchase Capital Equipment; (iv) provide guarantees to the Company for (A) one or more lines of credit for Company to purchase
Capital Equipment or (B) other purposes to be permitted in the sole discretion of the Purchaser; or (v) any combination of the foregoing. Each of the foregoing types of advances (each an “Advance” and collectively the
“Advances”) shall count towards the Maximum Principal Amount and shall be valued at the face or actual amount, including any guarantees, which shall reflect the face amount of the underlying obligations.”; and (ii) deleting the
remainder of Section 2(a). 
  
 (d) Section 2(b) is hereby
deleted in its entirety and replaced with the following: 
  
 “(b) Line of Credit Note. The Advances referred to it Section 2(a), above, will be made pursuant to a promissory note to be executed by Company in favor of Purchaser in substantially the form of Exhibit A-2 to this
Agreement (as amended, restated or modified from time to time, the “Line of Credit Note” and taken together with the Notes, the “Company Notes”), in an amount not to exceed the Maximum Principal Amount and
containing such terms and conditions as more fully set forth in the Line of Credit Note.” 
  
 (e) Section 2(c) is hereby deleted in its entirety and replaced with the following: 
  
 “(c) Advances. Company may request Advances under the Line of Credit Note from time to time in writing. Company may request Advances through
the earlier of March 1, 2005 or the occurrence of an Event of Default (as defined in the Line of Credit Note). Advances may be repaid at any time without penalty. Advances made under Section 2(a)(i) and Section 2(a)(ii) may not be repaid and
reborrowed, however, Advances under Section 2(a)(iii), (iv) or (v) (except to the extent including a portion under Sections 2(a)(i) or Section 2(a)(ii)) may be repaid reborrowed at such time that the line of credit or the obligation underlying the
guarantee is repaid, released and terminated in its entirety. “ 
  

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 (f) A new Section 3, is hereby added as follows, and the remaining Sections of the Agreement are
correspondingly renumbered: 
  
 “3. Warrant.

  
 Company shall issue Purchaser a warrant (the
“Warrant”) to purchase Company common stock, substantially in the form of Exhibit B hereto. As more fully set forth in the Warrant, the Warrant shall be exercisable for that number of shares of Company common stock equal to the quotient
obtained by dividing ten percent (10%) of the Maximum Principal Amount by $0.70, with a per share exercise price of $0.07.” 
  
 (g) Section 5 (as renumbered) is hereby amended to replace any references to “Note” or “Notes”, with references to
“Company Notes” and with such grammatical changes as necessary to reflect such amended references. 
  
 (h) The preamble to Section 6 (as renumbered) is hereby amended and restated in its entirety to read as follows: “Purchaser’s obligation
to purchase Notes at each Closing and to make any Advance under the Line of Credit Note under this Agreement, is subject to the satisfaction of all of the following conditions, any of which may be waived in whole or in part by the Purchaser:”.

  
 (i) Section 6(b) (as renumbered) is hereby amended by
replacing the term “Note” at the end of the Section with the language, “Company Note”. 
  
 (j) Section 6(c) (as renumbered) is hereby amended by: (i) replacing the word “Note” and the beginning of the second line with the
following, “Company Note” and (ii) replacing the words “the Note” at the end of the second line with the following language, “each Company Note”. 
  
 (k) Section 6(d) (as renumbered) is hereby amended and restated in its entirety to read as follows: 
  
 “(d) Company Notes. Each Company Note being purchased pursuant to this
Agreement, in the form attached hereto as Exhibit A-1 or Exhibit A-2, respectively, shall have been duly executed and delivered by the Company.” 
  
 (l) Section 7 (as renumbered) is hereby amended replacing each reference to “Notes” with a reference to “Company Notes” with
such grammatical changes as necessary to reflect such amended references. 
  
 (m) The heading to Exhibit A to the Agreement is hereby amended by replacing the words “Exhibit A” with the language “Exhibit A-1. 
  
 (n) A new Exhibit A-2, the Line of Credit Note, is hereby added as
Exhibit A-2 to the Agreement, in the form attached to this Amendment as Exhibit A. 
  
 (o) Exhibit B to the Agreement is hereby deleted in its entirety and replaced with the form of Warrant attached as Exhibit B to this Amendment. 
  
 3. Line of Credit Note and Warrant. Concurrently with the execution of
this Amendment, Purchaser and Company hereby agree to execute and deliver the Line of Credit Note and Company agrees to execute and deliver the Warrant. 
  

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 4. Reservation of Rights. Company acknowledges and agrees that neither the execution nor delivery
by Purchaser of this Amendment shall be deemed to create a course of dealing or otherwise obligate Purchaser to execute similar amendments under the same or similar circumstances in the future. 
  
 5. Limited Amendment/Execution. Except as expressly stated herein
above, Company and Purchaser intend that the terms and provisions of the Agreement remain unchanged and in full force and effect. 
  
 6. Miscellaneous. 
  
 (a) This Amendment shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns. No third
party beneficiaries are intended in connection with this Amendment. 
  
 (b) This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Transmission of signatures of any party by
facsimile shall for all purposes be deemed the delivery of original, executed counterparts thereof. 
  
 (c) This Amendment may not be amended except in accordance with the provisions of Section 6(a) of the Agreement. 
  
 (d) If any term or provision of this Amendment shall be deemed prohibited by
or invalid under any applicable law, such provision shall be invalidated without affecting the remaining provisions of this Amendment or the Agreement, respectively. 
  
 [Remainder of this page intentionally left blank] 
  

 4 

 IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by their
proper and duly authorized officers as of the date first written above and effective as of the Effective Date. 
  

			
	COMPANY:
	
	 SUNPOWER CORPORATION
 a California
corporation

		
	By:	 	/s/ Jay Peir
	Name:	 	Jay Peir
	Title:	 	Chief Financial Officer
	
	PURCHASER:
	
	CYPRESS SEMICONDUCTOR CORPORATION
		
	By:	 	/s/ Neil H. Weiss
	Name:	 	Neil H. Weiss
	Title:	 	Vice President, Treasurer

  

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 EXHIBIT A 
  

FORM OF LINE OF CREDIT NOTE 

 THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO COMPANY THAT SUCH REGISTRATION IS’ NOT
REQUIRED. 
  
 SUNPOWER CORPORATION 
  
 LINE OF CREDIT NOTE 
  
 This line of credit note (this “Note”) amends and restates in
their entirety each of those certain demand notes dated as of March 3, 2003, April 1, 2003, April 23, 2003, June 10, 2003, July 9, 2003, August 7, 2003, September 10, 2003, October 22, 2003 and January 26, 2004, issued by Company (as defined below)
in favor of Holder (as defined below). This Note is the “Line of Credit Note” under the Note Purchase Agreement (as defined below) and is effective as of May 30, 2002 (the “Effective Date”). 
  

  

			
	$30,000,000	  	 May 25, 2004
 San Jose, California

  
 FOR VALUE RECEIVED,
SUNPOWER CORPORATION, a California corporation (“Company”) promises to pay to CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation (“Holder”), or its registered assigns, the aggregate principal amount of Thirty Million
Dollars ($30,000,000) (the “Maximum Principal Amount”) or such lesser amount outstanding as of the date of payment, together with accrued interest thereon as provided in Section 3 of this Note. The aggregate outstanding principal amount of
this Note plus accrued and unpaid interest thereon shall be due and payable on the earlier to occur of the Maturity Date or such time when the Obligations are accelerated in accordance with the terms of this Note following an Event of Default
hereunder. 
  
 The parties hereto may from time to time indicate
each Advance on Schedule I to this Note, but which shall not be dispositive evidence as to the outstanding indebtedness hereunder without the written confirmation of Holder. 
  
 1. Definitions. As used in this Note, the following capitalized terms have the following meanings: 

 
 (a) “Advance” has the meaning given to
such term in the Note Purchase Agreement. 
  
 (b)
“Affiliate,” with respect to any Person, means (i) any director, officer or employee of such Person, (ii) any Person directly or indirectly controlling or controlled by or under 

 
direct or indirect common control with such Person, and (iii) any Person beneficially owning or holding 5% or more of any class of voting securities of such
Person or any corporation of which such Person beneficially owns or holds, in the aggregate, 5% or more of any class of voting securities. The term “control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 (c) “Event of Default” has the meaning given to such term in Section 6 hereof. 
  
 (d) “Holder” shall mean the Person
specified in the Recitals to this Note or any Person who shall at the time be the registered holder of this Note. 
  
 (e) “Lien” shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or
other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, capital lease or other title retention agreement, or any agreement to
provide any of the foregoing, and the filing of any financing statement or similar instrument under the Uniform Commercial Code of the State of California or comparable law of any jurisdiction. 
  
 (f) “Note Purchase Agreement” shall mean
the Note Purchase and Line of Credit Agreement, dated May 30, 2002, as amended, modified or, supplemented from time to time, entered into by and between Company and Holder. 
  
 (g) “Obligations” shall mean and include all loans, advances, debts, liabilities and
obligations, howsoever arising, owed by Company to Holder of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), now existing or hereafter arising under or pursuant to the
terms of this Note and the Note Purchase Agreement, including all interest, fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by Company hereunder and thereunder, in each case,
whether direct or indirect, absolute or contingent, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U.S.C. Section 101 et seq), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding. 
  
 (h) “Person” shall mean and include an individual, a partnership, a corporation (including a business trust), a joint
stock company, a limited liability company, an unincorporated association, a joint venture or other entity or a governmental authority. 
  
 (i) “Senior Indebtedness” shall mean the principal of (and premium, if any), unpaid interest on and amounts reimbursable,
fees, expenses, costs of enforcement and other amounts due in connection with, (i) indebtedness of Company to banks, commercial finance lenders, insurance companies, leasing or equipment financing institutions or other lending institutions regularly
engaged in the business of lending money (excluding venture capital, investment banking or similar institutions which sometimes engage in lending activities but which are primarily engaged in investments in equity securities), which is for money
borrowed, or purchase or leasing of equipment in the case of lease or other equipment financing, whether or not secured, and (ii) any such 

  

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indebtedness or any debentures, notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness, or any indebtedness arising from the
satisfaction of such Senior Indebtedness by a guarantor. 
  
 (j) “SVB Agreement” shall mean the Loan and Security Agreement dated as of September 25, 2003, entered into by and between Holder and Silicon Valley Bank. 
  
 2. Advances. Company may request and Holder shall make an
Advance as provided in the Note Purchase Agreement. In no event will Holder be obligated to make any Advance (i) if an Event of Default has occurred and is continuing, and/or (ii) after March 31, 2005 and/or (ii) to the extent the aggregate
principal amount of all outstanding Advances would exceed the Maximum Principal Amount. 
  
 3. Interest. 
  
 (a) General. Interest shall accrue on the outstanding principal amount of this Note at an annual rate of seven percent simple interest, until the outstanding principal amount of this Note shall be paid in full.

  
 (b) Guarantees. Advances constituting
guarantees made pursuant to Section 2(a)(iv) of the Note Purchase Agreement shall not bear interest (but shall be considered part of the aggregate principal amount hereof for all other purposes) with respect to a particular guarantee for so long as
such guarantee remains undrawn and Holder is not required to make any payment or otherwise advance funds with respect thereto. At such time as Holder is required to make any payment or other advance of funds with respect such guaranty, the entire
amount paid or advanced by Holder shall bear interest as provided in Section 3(a), above. 
  
 4. Payment. From the Effective Date through May 1, 2004, interest will accrue on this Note as provided in Section 3 hereof. Beginning on June 1, 2004 and on the first business day of each month
thereafter through May 1, 2007, Company will make payments to Holder of accrued interest on the outstanding aggregate principal amount of this Note (subject to Section 3(b)) for the preceding month, based on a month of thirty-days and a year of
twelve thirty-day months. Thereafter, the outstanding principal balance under this Note plus accrued and unpaid interest thereon (subject to Section 3(b)) shall be fully amortized and payable in sixty (60) consecutive equal monthly payments. Each
such principal and interest payment shall be payable on the first business day of each month commencing June 2007 with the last payment to be made on the first business day of May 2012. 
  
 5. Prepayment. 
  
 (a) General. Upon ten (10) days prior written notice to Holder, Company may prepay this Note in whole or in part without penalty or
premium; provided, however, that Company may not make partial prepayments more frequently than once in any given calendar quarter. Any prepayment shall include the interest accumulated since the last payment under the Note on the principal being
prepaid. Amounts prepaid may not be reborrowed except as provided in the Note Purchase Agreement. 
  

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 (b) Optional Prepayment Upon an Equity Financing. If after the Effective Date
Company raises in an equity financing gross proceeds in excess of Ten Million Dollars ($ 10,000,000) (excluding therefrom proceeds attributable to the sale of equity to Holder or any of its successors, assigns or Affiliates), then, upon the election
of Holder made within ten (10) days of notice by Company to Holder of the closing of such financing, such amount of the outstanding principal balance of this Note as may be determined in the sole discretion of Holder, but not to exceed fifty percent
(50%) of the net proceeds received by Company from such equity financing, shall be prepaid within five (5) days after receipt by Company of Holder’s election. As used in this Section 5(b) “net proceeds” means the proceeds received by
Company after deducting the fees and costs incurred by Company and paid or payable to investment banking, legal, and accounting professionals in connection with the equity financing. 
  
 6. Events of Default. The occurrence of any of the following shall constitute an “Event of Default”
under this Note: 
  
 (a) Failure to Pay.
Company shall fail to pay when due any principal or interest payment and such payment shall not have been made within five (5) days thereafter; 
  
 (b) Other Notes. A default or event of default shall occur and be continuing under any other Company Note (as defined in the Note
Purchase Agreement); 
  
 (c) Voluntary
Bankruptcy or Insolvency Proceedings. Company or any of its Subsidiaries shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable,
or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or
interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vii) take any action for the purpose of effecting
any of the foregoing; 
  
 (d) Involuntary
Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Company or any of its Subsidiaries or of all or a substantial part of the property thereof, or an involuntary case or other
proceedings seeking liquidation, reorganization or other relief with respect to Company or any of its Subsidiaries or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order
for relief entered or such proceeding shall not be dismissed or discharged within thirty (30) days of commencement; 
  
 (e) SVB Agreement Covenant Default. Company causes Holder to default on its SVB Agreement due to violating a covenant in Section 7
of the SVB Agreement; or 
  
 (f)
Acquisition. If (i) Company merges with or into or consolidates with another Person in which Company is not the surviving entity (other than a merger effectuated solely for the 

  

 4 

 
purpose of changing Company’s jurisdiction of formation), (ii) Company sells, exclusively licenses or leases all or substantially all of Company’s
assets and properties, or (iii) any other form of corporate reorganization occurs in which the shareholders of Company immediately prior to such corporate reorganization do not own a majority of the outstanding shares of the surviving corporation by
virtue of their shares in Company. 
  
 7. Rights of Holder
upon Default. Upon the occurrence or existence of any Event of Default other than described in Section 6(c) or Section 6(d), and at any time thereafter during the continuance of such Event of Default, Holder may by written notice to Company,
declare all outstanding Obligations payable by Company hereunder to be immediately due. Upon the occurrence or existence of any Event of Default described in Section 6(c) or Section 6(d), immediately and without notice, all outstanding Obligations
payable by Company hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary
notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right power or remedy granted to it by this Note or otherwise permitted to it by law, either by suit in
equity or by action at law, or both. 
  
 8. No
Subordination. Except for Company’s obligations for the Senior Indebtedness (as specifically defined in this Note), to which the indebtedness evidenced by this Note is expressly subordinated, the repayment obligations of Company set
forth in this Note and the indebtedness evidenced hereby shall be senior in right of payment to, and shall not subordinate to or be subject to the prior payment of interest, principal or otherwise (whether in cash or cash equivalents), or to the
maturity of, any existing or future indebtedness of Company. The indebtedness evidenced by this Note is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of all of
Company’s Senior Indebtedness. 
  
 (a)
Insolvency Proceedings. If there shall occur any receivership, insolvency, assignment for the benefit of creditors, bankruptcy, reorganization, or arrangements with creditors (whether or not pursuant to bankruptcy or other insolvency laws),
sale of all or substantially all of the assets, dissolution, liquidation, or any other marshaling of the assets and liabilities of Company, (i) no amount shall be paid by Company in respect of the principal of, interest on or other amounts due with
respect to this Note at the time outstanding, unless and until the principal of and interest on the Senior Indebtedness then outstanding shall be paid in full, and (ii) no claim or proof of claim shall be filed with Company by or on behalf of Holder
of this Note which shall assert any right to receive any payments in respect of the principal of and interest on this Note except subject to the payment in full of the principal of and interest on all of the Senior Indebtedness then outstanding.

  
 (b) Default on Senior Indebtedness. If
there shall occur an event of default which has been declared in writing with respect to any Senior Indebtedness, as defined therein, or in the instrument under which it is outstanding, permitting the holder to accelerate the maturity thereof and
Holder shall have received written notice thereof from the holder of such Senior Indebtedness, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, or all Senior Indebtedness shall have been
paid in full, no payment shall be made in respect of the principal of or interest on this Note, unless within one hundred eighty (180) days after the happening of such event of default, the’ maturity of such Senior Indebtedness shall not have
been accelerated. Not more than one notice may be given to Holder pursuant to the terms of this Section 8(b) during any 360-day period. 
  

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 (c) Further Assurances. By acceptance of this Note, Holder agrees to execute and
deliver customary forms of subordination agreement requested from time to time by holders of Senior Indebtedness, and as a condition to Holder’s rights hereunder, Company may require that Holder execute such forms of subordination agreement;
provided that such forms shall not impose on Holder terms less favorable than those provided herein. 
  
 (d) Other Indebtedness. No future indebtedness shall be senior in any respect to the indebtedness represented by this Note without
the consent of Holder. Also, Company shall not enter into any debt financing representing obligations or potential obligations in excess of five hundred thousand ($500,000) without the prior written consent of Holder. Exhibit A, to this Note lists
all Company debt that is senior to this Note as of the Effective Date and the date hereof. 
  
 (e) Subrogation. Subject to the payment in full of all Senior Indebtedness, Holder shall be subrogated to the rights of the
holder(s) of such Senior Indebtedness (to the extent of the payments or distributions made to the holder(s) of such Senior Indebtedness pursuant to the provisions of this Section 8) to receive payments and distributions of assets of Company
applicable to the Senior Indebtedness. No such payments or, distributions applicable to the Senior Indebtedness shall, as between Company and its creditors, other than the holders of Senior Indebtedness and Holder, be deemed to be a payment by
Company to or on account of this Note; and for purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness to which Holder would be entitled except for the provisions of this Section 8 shall, as between Company
and its creditors, other than the holders of Senior Indebtedness and Holder, be deemed to be a payment by Company to or on account of the Senior Indebtedness. 
  

(f) No Impairment. Subject to the rights, if any, of the holders of Senior Indebtedness under this Section 8 to receive cash,
securities or other properties otherwise payable or deliverable to Holder, nothing contained in this Section 8 shall impair, as between Company and Holder, the obligation of Company, subject to the terms and conditions hereof, to pay to Holder the
principal hereof and interest hereon as and when the same become due and payable, or shall prevent Holder, upon default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by applicable law. 
  
 (g) Lien Subordination. Any Lien of Holder, whether
now or hereafter existing in connection with the amounts due under this Note, on any assets or property of Company or any proceeds or revenues therefrom which Holder may have at any time as security for any amounts due and obligations under this
Note shall be subordinate to all Liens now or hereafter granted to a holder of Senior Indebtedness by Company or by law, notwithstanding the date, order or method of attachment or perfection of any such Lien or the provisions of any applicable law.

  
 (h) Reliance of Holders of Senior
Indebtedness. Holder, by its acceptance hereof, shall be deemed to acknowledge and agree that the foregoing subordination provisions are, and are intended to be, an inducement to and a consideration of each holder of Senior Indebtedness, whether
such Senior Indebtedness was created or acquired before or after the creation of the indebtedness 

  

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evidenced by this Note, and each such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring
and holding, or in continuing to hold, such Senior Indebtedness. 
  
 9. Successors and Assigns. Subject to the restrictions on transfer described in Sections 11 and 12 below, the rights and obligations of Company and Holder of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties. 
  
 10.
Waiver and Amendment. Any provision of this Note may be amended, waived or modified upon the written consent of Company and Holder. 
  
 11. Transfer of this Note. This Note may be transferred to an Affiliate of Holder. With respect to any other offer, sale or other
disposition of this Note, Holder will give written notice to Company prior thereto, describing briefly the manner thereof, together with a written opinion of Holder’s counsel, to the effect that such offer, sale or other distribution may be
effected without registration or qualification (under any federal or state law then in effect). Upon receiving such written notice and a reasonably satisfactory opinion of counsel, if so requested, Company, as promptly as practicable, shall notify
Holder that Holder may sell or otherwise dispose of this Note, all in accordance with the terms of the notice delivered to Company. If a determination has been made pursuant to this Section 12 that the opinion of counsel for Holder is not reasonably
satisfactory to Company, Company shall so notify Holder promptly after such determination has been made. Upon transfer this Note shall retain the legend as to the applicable restrictions on transferability in order to ensure compliance with the
Securities Act of 1933, as amended (the “Act”), unless in the opinion of counsel for Company such legend is not required in order to ensure compliance with the Act. Company may issue stop transfer instructions to its transfer agent in
connection with such restrictions. Subject to the foregoing, transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of Company. Prior to presentation of this Note for registration of transfer,
Company shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and
Company shall not be affected by notice to the contrary. 
  
 12.
Assignment by Company. Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by Company without the prior written consent of Holder.

  
 13. Notices. Any notice, request or other
communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or by recognized overnight courier or personal delivery
at the respective addresses of the parties as set forth on the register maintained by Company. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given when
received. 
  
 14. Pari Passu Notes. Holder
acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to (i) all other Company Notes (as defined in
the Note 
  

 7 

 
Purchase Agreement) issued pursuant to the Note Purchase Agreement and (ii) that promissory note issued by Company to Holder dated February 11, 2003 in the
principal amount of $2,500,000. 
  
 15. Payment.
Payment shall be made in lawful currency of the United States. 
  
 16. Expenses; Waivers. If action is instituted to collect this Note, Company promises to pay all costs and expenses, including, without limitation, reasonable attorneys’ fees and costs, incurred in connection with such
action. Except as otherwise provided herein, Company hereby waives notice of default, presentment or demnd for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument. 
  
 17. Governing Law. This Note and all actions arising out of or
in connection with this Note shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions of the State of California, or of any other state. 
  
 [Remainder of this page intentionally left blank] 
  

 8 

 IN WITNESS WHEREOF, the undersigned have caused this Note to be issued as of the date first written
above. 
  

			
	COMPANY:
	
	SUNPOWER CORPORATION
		
	By:	 	 /s/ Jay Peir

	Title:	 	Chief Financial Officer
	
	AGREED AND ACCEPTED:
	
	HOLDER:
	
	CYPRESS SEMICONDUCTOR CORPORATION
		
	By:	 	 /s/ Neil H. Weiss

	Title:	 	Vice President, Treasurer

  

 9 

 SCHEDULE 1 
  

To Line of Credit Note 
  

							
	 DATE
 ADVANCE
 FUNDED

	  	 PRINCIPAL
 AMOUNT OF
 ADVANCE

	  	 COMPANY
 ACKNOWLEDGMENT

	  	 HOLDER
 ACKNOWLEDGMENT

	03/03/03	  	530,862.00	  	 	  	 
	04/01/03	  	600,000.00	  	 	  	 
	04/23/03	  	860,000.00	  	 	  	 
	06/10/03	  	1,500,000.00	  	 	  	 
	07/09/03	  	1,100,000.00	  	 	  	 
	08/07/03	  	6,300,000.00	  	 	  	 
	09/10/03	  	4,600,000.00	  	 	  	 
	10/22/03	  	7,600,000.00	  	 	  	 
	1/26/04	  	5,500,000.00	  	 	  	 

 EXHIBIT A 
  
 SUNPOWER CORPORATION - EXISTING SENIOR INDEBTEDNESS 
  
 None. 

 EXHIBIT B 
  
 Warrant 

 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SECURITIES AND ANY SECURITIES OR SHARES ISSUED HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES. 
  

			
	 No. WC-  
	 	4,285,715 shares

  
 WARRANT TO PURCHASE
COMMON STOCK 
 OF 
 SUNPOWER
CORPORATION 
  
 This certifies that, for value received, to wit
the purchase of an unsecured promissory note dated                     , 2003 (the “Note”) of SUNPOWER CORPORATION, a California
corporation (the “Company”), CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation (“Holder”) is entitled, subject to the terms and conditions set forth below, to purchase from the Company, in whole or in part, up to
4,285,715 fully paid and nonassessable shares of Common Stock of the Company (the “Warrant Shares”) at a purchase price per share of $0.07 (the “Exercise Price”). The rights, preferences, privileges and restrictions of the
Warrant Shares are set forth in the Company’s Amended and Restated Articles of Incorporation as in effect on the date hereof. The number, character and Exercise Price of such shares of Common Stock are subject to adjustment as provided below
and all references to “Warrant Shares” and “Exercise Price” herein shall be deemed to include any such adjustment or series of adjustments. The term “Warrant” as used herein shall mean this Warrant, and any warrants
delivered in substitution or exchange therefor as provided herein. 
  
 1.
Exercisability of Warrant. Subject to the terms and conditions set forth herein, this Warrant shall be exercisable during the term commencing on the date hereof and ending at 5:00 p.m., Pacific Standard Time, on
                    , 2113 (the “Warrant Expiration Date”). At any time prior to the Warrant Expiration Date, this Warrant may be
exercised in whole or in part, cumulatively as to that percentage of the Warrant Shares equal to the quotient obtained by dividing the largest unpaid principal balance outstanding under the Note on any date subsequent to the date set forth on page 8
below by $30,000,000; provided, however, that this Warrant shall become exercisable as to all of the remaining Warrant Shares (a) if prior to the first business day in March, 2005, the Company has not requested to borrow monies from Holder under the
Note such that if Holder had acceded to such requests the largest unpaid principal balance under the Note from the date of the Note through the first business day in March, 2005, would be $30,000,000 or (b) if, prior to the first business day in
March, 2005, either the Company conducts an initial public offering of its stock registered with the SEC or all or substantially all of the assets of the Company or more than eighty percent (80%) of the outstanding stock of the Company is sold,
including via merger, to a person or entity other than Cypress or an affiliate of Cypress as the term affiliate is defined in SEC Rule 405. 

 2. Exercise of Warrant. This Warrant may be exercised by the Holder by the surrender of this Warrant to the
Company, with the Notice of Exercise annexed hereto duly completed and executed on behalf of the Holder, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder appearing on
the books of the Company) during the Exercise Period, and: 
  
 A.
If the Holder elects to exercise this Warrant in cash, the delivery of payment to the Company, for the account of the Company, by cash, wire transfer of immediately available funds to a bank account specified by the Company, or by certified or bank
cashier’s check, of the Exercise Price for the number of Warrant Shares specified in the Exercise Notice in lawful money of the United States of America; or 
  
 B. If the Holder elects to make a Net Issue Exercise without the payment of cash, the election to receive a number of shares
equal to the value (as determined below) of this Warrant (or the portion thereof being canceled), as set forth on the Exercise Notice and calculated using the following formula: 
  

							
	X	 	=	 	(Y)(A – B)	  	 
	 	 	      A

  

					
	Where:	  	X -	 	The number of shares of Common Stock to be issued to Holder.
			
	 	  	Y -	 	The number of shares of Common Stock subject to this Warrant at the date of exercise or, if only a portion of the Warrant is being exercised, the portion of the Warrant being
cancelled.
			
	 	  	A -	 	The fair market value of one share of Common Stock.
			
	 	  	B -	 	Exercise Price (as adjusted to the date of such calculations)

  
 For purposes of this
Section 2(B), if the Common Stock is traded in a public market, the fair market value of the Common Stock shall be the closing price of the Common Stock reported for the business day immediately before Holder delivers its Notice of Exercise to the
Company. If the Common Stock is not traded in a public market, the Company’s Board of Directors shall determine fair market value in their good faith judgment. 
  
 The Company agrees that such Warrant Shares shall be deemed to be issued to the Holder as the record holder of such Warrant
Shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for the Warrant Shares as aforesaid. A stock certificate or certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Holder as promptly as practicable, and in any event within 10 days, thereafter. If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of the stock certificate or certificates, deliver to
the Holder a new Warrant evidencing the rights to purchase the remaining Warrant Shares, which new Warrant shall in all other respects be identical with this Warrant. No adjustments shall be made on Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common Stock prior to the date as of which the Holder shall be deemed to be the record holder of such Warrant Shares. 
  

 -2- 

 3. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation
of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount. 
  
 4. Rights of Warrant Holder. Subject to Sections 7 and 9 of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of
Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant
shall have been exercised as provided herein. 
  
 5. Transfer of Warrant.

  
 A. Warrant Register. The Company will maintain a
register (the “Warrant Register”) containing the name and address of the Holder. The Holder of this Warrant may change its address as shown on the Warrant Register by written notice to the Company requesting such change. Any notice or
written communication required or permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant Register and at the address shown on the Warrant Register. Until this Warrant is transferred on the
Warrant Register of the Company, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary. 
  
 B. Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 5(A) above, issuing the Warrant Shares or other securities then issuable upon the exercise of this Warrant, exchanging this Warrant, replacing this Warrant,
or any or all of the foregoing. Thereafter, any such registration, issuance, exchange, or replacement, as the case may be, shall be made at the office of such agent. 
  
 C. Transferability and Nonnegotiability of Warrant. This Warrant may be transferred to a wholly owned subsidiary of
Holder, and, with the prior written consent of the Company, which may be granted or withheld in the sole discretion of the Company, to other entities or persons. This Warrant may not be transferred or assigned without compliance with all applicable
federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if such are requested by the Company). However, no
investment representation letter 

  

 -3- 

 
or opinion of counsel shall be required for any transfer of this Warrant or any shares of Common Stock issued upon exercise hereof or conversion thereof in
compliance with Rule 144 or Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). Subject to the provisions of this Warrant with respect to compliance with the Securities Act, title to this Warrant may be transferred
by endorsement (by the Holder executing the Assignment Form annexed hereto) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery. 
  
 D. Exchange of Warrant Upon a Transfer. On surrender of this Warrant for exchange, properly endorsed on the
Assignment Form and subject to the provisions of this Warrant with respect to compliance with the Securities Act and with the limitations on assignments and transfers as contained in this Section 5, the Company at its expense shall issue to or on
the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of Warrant Shares issuable upon exercise hereof.

  
 E. Compliance with Securities Laws. 
  
 i. The Holder of this Warrant, by acceptance hereof,
represents that it is an “accredited investor” within the meaning of Rule 501 under the Securities Act, as presently in effect. 
  
 ii. The Holder acknowledges that this Warrant and the shares of Common Stock to be issued upon exercise thereof are being acquired solely
for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise thereof except
under circumstances that will not result in a violation of the Securities Act or any applicable state securities laws. Upon exercise of this Warrant, the Holder shall, if requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the shares of Common Stock so purchased are being acquired solely for the Holder’s own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale. 
  
 iii. This Warrant and all shares of Common Stock issued upon
exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws): 
  

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES AND ANY SECURITIES OR SHARES ISSUED
HEREUNDER MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES. 
  

 -4- 

 The Company agrees to remove promptly, upon the request of the holder of this Warrant and Securities
issuable upon exercise of the Warrant, the legend set forth in Section 5(E)(iii) above from the documents/certificates for such securities upon full compliance with this Agreement and Rules 144 and 145. 
  
 6. Reservation of Stock. The Company represents, warrants and covenants that:

  
 A. The Company has reserved from its authorized and unissued
shares of Common Stock (or other shares issuable upon exercise of the Warrant) a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of this Warrant. 
  
 B. Upon issuance by the Company of the Warrant Shares pursuant to exercise of
this Warrant as provided herein and receipt by the Company of the Exercise Price, the Warrant Shares so purchased and issued shall be fully paid, non-assessable and free from all taxes, liens and charges in respect of the issue thereof (provided
that the Holder shall bear any taxes in respect of any contemporaneously occurring transfer thereof effected at the request of the Holder). 
  
 C. This Warrant has been duly authorized and executed by the Company, and is a valid and binding obligation of the Company enforceable in accordance with
its terms. The Company will not amend the rights, preferences, privileges or restrictions of the Common Stock without the affirmative consent of the Holder. 
  
 7. Notices. 
  
 A. Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted pursuant to Section 9 hereof, the Company shall issue a
certificate signed by its Chief Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Exercise Price and number of shares
purchasable hereunder after giving effect to such adjustment, and shall cause a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant. 
  
 B. In case: 
  
 i. the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right; 
  
 ii. of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger of
the Company with or into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation; 
  

 -5- 

 iii. of any voluntary dissolution, liquidation or winding-up of the Company; 

 
 iv. of the filing of the Company’s first
registration statement with the U.S. Securities and Exchange Commission (the “SEC”); 
  
 then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a notice specifying, as the case may be, (A) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, (B) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up, or (C) the anticipated date on which the Company expects its first registration statement with the SEC to become effective. Such notice
shall be mailed at least fifteen (15) days prior to the date therein specified. 
  
 C. All such notices, advices and communications shall be deemed to have been received (i) in the case of personal delivery, on the date of such delivery and (ii) in the case of mailing, on the third business day
following the date of such mailing if sent to a U.S. address and on the tenth (10th) business day following the date of such mailing if sent to an address outside the U.S. 
  
 8. Amendments. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing
signed by the Company or the Holder of the Warrant against which enforcement of such change, waiver, discharge or termination is sought. 
  
 9. Adjustments. The Exercise Price and the number of Warrant Shares purchasable hereunder are subject to adjustment from time to time as follows: 
  
 A. Reclassification, etc. If the Company, at any time while this
Warrant remains outstanding and unexpired by reclassification of securities or otherwise, shall change the Common Stock into the same or a different number of securities of any other class or classes, the Warrant shall thereafter be similarly
changed, subject to further adjustment as provided in this Section 9. 
  
 B. Split, Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall split, subdivide or combine the Common Stock into a different number of securities of the same
class, then (i) in the case of a split or subdivision, the Exercise Price shall be proportionately decreased and the securities issuable upon exercise of this Warrant shall be proportionately increased, and (ii) in the case of a combination, the
Exercise Price shall be proportionately increased and the securities issuable upon exercise of this Warrant shall be proportionately decreased. 
  
 C. Adjustments for Dividends in Stock or Other Securities or Property. If while this Warrant remains outstanding and unexpired the holders of the
securities as to which purchase rights under this Warrant exist at the time shall have received, or, on or after the record date fixed for the determination of eligible shareholders, shall have become entitled to receive, 

  

 -6- 

 
without payment therefor, other or additional stock or other securities or property (other than cash) of the Company by way of dividend, then and in each
case, this Warrant shall represent the right to acquire, in addition to the number of shares of the security receivable upon exercise of this Warrant, and without payment of any additional consideration therefor, the amount of such other or
additional stock or other securities or property (other than cash) of the Company that such holder would hold on the date of such exercise had it been the holder of record of the security receivable upon exercise of this Warrant on the date hereof
and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and/or all other additional stock available by it as aforesaid during such period, giving effect to all adjustments called
for during such period by the provisions of this Section 9. 
  
 D.
Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 9, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request, at any time, of any
such Holder, furnish or cause to be furnished to such Holder a like certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other
property that at the time would be received upon the exercise of the Warrant. 
  
 E. No Impairment. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this Section 9 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of this Warrant against impairment.

  
 10. Miscellaneous. 
  
 A. This Warrant shall be governed by the laws of the State of California as
applied to agreements entered into in the State of California by and among residents of the State of California, without regard to the principles of conflict of laws thereof. 
  
 B. In the event of a dispute with regard to the interpretation of this Warrant, the prevailing party may collect the cost of
attorney’s fees, litigation expenses or such other expenses as may be incurred in the enforcement of the prevailing party’s rights hereunder. 
  
 C. The holder hereof agrees to be bound by such market standoff provisions (i.e., restrictions on stock resale provisions following the Company’s
sale of securities in the public market) as contained in the Company’s Investors Rights Agreement dated May 30, 2002. 
  
 D. This Warrant shall be exercisable as provided for herein, except that in the event that the Warrant Expiration Date shall fall on a Saturday, Sunday or
United States federally recognized holiday, the Warrant Expiration Date shall be extended to 5:00 p.m. Pacific time on the business day following such Saturday, Sunday or recognized holiday. 
  
 E. This Warrant and any document or agreements executed by the parties
pursuant to this Warrant constitute the full and complete understanding of the parties hereto with respect to 

  

 -7- 

 
the subject matter hereof and supersede all previous agreements or understandings, written or oral, between the parties with respect thereto. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 -8- 

 IN WITNESS WHEREOF, SUNPOWER CORPORATION has caused this Warrant to be executed by its officer thereunto
duly authorized. 
  
 Dated:
            , 2003 
  

			
	COMPANY:
	
	SUNPOWER CORPORATION
		
	By:	 	 
	Title: 	 	 

  

 -9- 

 NOTICE OF EXERCISE 
  
 To: SUNPOWER CORPORATION 
  
 The undersigned hereby elects to purchase                     
shares of Common Stock of SUNPOWER CORPORATION pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price for such shares in full. 
  
 In exercising this Warrant, the undersigned hereby confirms and acknowledges that the shares of Common Stock to be issued upon exercise
hereof are being acquired solely for the account of the undersigned and not as a nominee for any other party, or for investment, and that the undersigned will not offer, sell or otherwise dispose of any such shares of Common Stock except under
circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws. 
  
 Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

  

					
	 	 	 	 	 
	 	 	(Name)	 	 
			
	 	 	 	 	 
	 	 	(Name)	 	 

  

					
			
	  	 	 	 	  
	(Date)	 	 	 	(Signature)

  

 -10- 

 ASSIGNMENT FORM 
  

FOR VALUE RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant. 
  

					
	Name of Assignee	 	 	 	Address

  
 and does hereby
irrevocably constitute and appoint                      to make such transfer on the books of SUNPOWER CORPORATION, maintained for the
purpose, with full power of substitution in the premises. 
  
 The
undersigned also represents that, by assignment hereof, the Assignee acknowledges that this Warrant and the shares of stock to be issued upon exercise hereof are being acquired for investment and that the Assignee will not offer, sell or otherwise
dispose of this Warrant or any shares of stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended, or any applicable state securities laws. Further, the
Assignee has acknowledged that upon exercise of this Warrant, the Assignee shall, if requested by the Company, confirm in writing, in a form satisfactory to the Company, that the shares of stock so purchased are being acquired for investment and not
with a view toward distribution or resale. 
  
 Dated:
                     
  
 _____________________________________ 
  

 -11- 

 CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS 
 DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH 
 THE COMMISSION 
  
 WACKER                POLYSILICON 
  
 SUPPLY AGREEMENT 
  

			
	 between
	  	 Wacker-Chemie GmbH

	 	  	 Hanns-Seidel-Platz 4

	 	  	 81737 Munich

	 	  	 Federal Republic of Germany

		
	 	  	 - hereinafter referred to as “WACKER” –

		
	 and
	  	 SunPower Corporation

	 	  	 430 Indio Way

	 	  	 Sunnyvale, CA 94085

	 	  	 U.S.A.

		
	 	  	 - hereinafter referred to as “BUYER” -

  
 Preamble 
  
 BUYER has requirements for polycrystalline Silicon. WACKER is willing to supply BUYER with
polycrystalline Silicon. 
  
 Supply Agreement SunPower Corp./WACKER August 21st,
2005 
  

 -12- 

 WACKER                POLYSILICON

  
 Now, therefore, in consideration of the foregoing and the mutual premises
hereinafter contained, WACKER and BUYER agree as follows: 
  

	1.	Product 

  
 WACKER agrees to sell and deliver and BUYER agrees to purchase and take the poly-crystalline Silicon manufactured by WACKER as defined per specification
set forth in Appendix A (hereinafter referred to as “PRODUCT”). 
  

	2.	Quantities 

  

	2.1	The BUYER shall make the agreed prepayment according to the payment schedule set forth in Appendix A. 

  
 WACKER shall sell and deliver to BUYER and BUYER will purchase and take from
WACKER the annual quantities of PRODUCT set forth in Appendix A. 
  

	3.	Prices / Payment Terms 

  

	3.1	The prices for the PRODUCT are set forth in Appendix A. 

  

	3.2	The prices under Section 3.1 above shall be firm and not subject to any change until 31.12.2017. 

  

	3.3	WACKER shall invoice BUYER with each shipment of PRODUCT. BUYER shall pay such invoices net within *** (***) days from the date of such invoices. 

  

	4.	Delivery 

  

	4.1	PRODUCT shall be delivered ex Works Burghausen (Incoterms 2000). 

  

	4.2	All deliveries of PRODUCT are subject to WACKER’s General Conditions of Sale set forth in Appendix B and hereby made part of this Agreement, provided, however, that if
there is any conflict between the terms of this Agreement and the said Conditions of Sale the terms of this Agreement shall prevail. 

  

	4.3	The agreed annual quantities will be shipped in about equal monthly installments. 

  

	5.	Quality / Inspection and Testing 

  

	5.1	The PRODUCT supplied by WACKER shall conform to the specifications set forth in Appendix A. 

  

	***	CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

  
 Supply Agreement SunPower Corp./WACKER August 21st, 2005 

 -13- 

 WACKER                POLYSILICON

  

	5.2	It is understood and expressly agreed that the PRODUCT delivered by WACKER hereunder are PRODUCTS of technical quality only and BUYER is exclusively responsible for fitness for
purpose, handling, use and application of the PRODUCT. 

  

	5.3	Upon receipt of each shipment of PRODUCT BUYER shall inspect the PRODUCT. Unless BUYER notifies WACKER within *** (***) days after the arrival of the shipment at Buyer’s
premises or warehouse, that it does not conform to the quantity ordered or WACKER’s certificate of quality does not conform to the specifications set forth in Appendix A, said shipment shall be deemed to have been delivered as ordered
and WACKER’s certificate of quality shall be deemed to conform to the specifications. 

  

	6.	Warranty / Liability 

  

	6.1	WACKER warrants solely that the PRODUCT delivered shall conform to the specifications set forth in Appendix A. Except for the warranty provided above, WACKER disclaims any
and all other express or implied warranties with respect to the PRODUCT, and any warranty of merchantability or fitness for a particular purpose is expressly disclaimed. 

  

	6.2	BUYER’s exclusive remedy and WACKER’s sole obligation for any claim or cause of action arising under this Agreement because of defective PRODUCT is expressly limited to
either (i) the replacement of non-conforming PRODUCT or the repayment of the purchase price of the respective quantity of PRODUCT; OR (ii) payment not to exceed the purchase price of the specific quantity of PRODUCT for which damages are claimed.
Any remedy is subject to BUYER giving WACKER notice as provided for in Section 5.3. 

  

	6.3	The parties agree that the remedies provided in this Agreement are adequate and that except as provided for above, neither party shall be liable to the other, whether directly or by
way of indemnity or contribution for special, incidental, consequential or other damages arising from the breach of any obligation hereunder or for any other reason whatsoever, including actions for tort, strict or product liability, patent or
trademark infringement except as provided for herein. 

  

	7.	Confidentiality 

  

	7.1	BUYER may use all the information disclosed by WACKER under this Agreement only for the purposes contemplated herein. 

  

	7.2	BUYER agrees to keep secret such information and to take the necessary measures to prevent any disclosure to third parties. 

  

	7.3	BUYER is responsible for assuring that secrecy is maintained by its employees and agents. 

  

	***	CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

  
 Supply Agreement SunPower Corp./WACKER August 21st, 2005 

 -14- 

 WACKER                POLYSILICON

  

	7.4	The secrecy obligation does not apply to information 

  

	 	•	 	where BUYER can prove that is was known to BUYER prior to its receipt; 

  

	 	•	 	which is or has become generally available to the public prior to its receipt; 

  

	 	•	 	which is or has become generally available to the public without being the result of a breach of this Agreement; 

  

	 	•	 	which is in accordance with information BUYER received or got access to from an entitled person without any obligation of secrecy; 

  

	 	•	 	where WACKER approved the disclosure in a particular case in writing. 

  

	7.5	The secrecy obligation shall survive the term of this Agreement. 

  

	8.	Security Interest 

  
 BUYER hereby grants WACKER a continuing security interest in any PRODUCT and in the proceeds (including proceeds of sale or insurance) until the entire
purchase price for the PRODUCT currently or previously sold to BUYER is paid and until all late payment interest, legal fees and expenses required to enforce WACKER’s rights and any costs, expenses, taxes or other charges required to be paid by
BUYER to WACKER have been paid in full. BUYER specifically agrees that WACKER may file one or more financing statements or other documents and take all necessary or appropriate in order to create, perfect, preserve or enforce WACKER’s security
interest in the PRODUCT pursuant to the Uniform Commercial Code and other applicable law, and hereby grants to WACKER a power of attorney to execute such statements or documents in BUYER’s name. WACKER’s reasonable costs and expenses
(including, but not limited to, attorney’s fees and expenses for pursuing, searching for, receiving, taking, keeping, storing, advertising and selling the PRODUCT shall be paid by BUYER who shall remain liable for any deficiency resulting from
a sale of the PRODUCT and shall pay any deficiency forthwith on demand. The requirement of reasonable notice of sale shall be met if such notice is mailed and addressed to BUYER at its last address appearing on WACKER’s records at least 30 days
prior to the date of sale. 
  

	9.	Force Majeure 

  

	9.1	If either party should be prevented or restricted directly or indirectly by an event of Force Majeure as hereinafter defined from performing all or any of its obligations under this
Agreement, the party so affected will be relieved of performance of its obligations hereunder during the period that such event and its consequences will continue, but only to the extent so prevented, and will not be liable for any delay or failure
in the performance or any of its obligations hereunder or loss or damage whether direct, general, special or consequential which the other party may suffer due to or resulting from such delay or failure, provided always that prompt notice is given
by the affected party to the unaffected party by facsimile or telephone of the occurrence of the event constituting the Force Majeure, together with details thereof and an estimate of the period of time for which it will continue.

  
 Supply Agreement SunPower Corp./WACKER August 21st, 2005

 -15- 

 WACKER                POLYSILICON

  

	9.2	The term Force Majeure shall include without limitation strike, labour dispute, lock out, fire, explosion, flood, war (accident), act of god or any other cause beyond the reasonable
control of the affected party, whether similar or dissimilar to the causes enumerated above. 

  

	10.	Assignment 

  
 This Agreement or any part thereof is not assignable by either party without the prior written consent of the other party. 
  

	11.	Entire Agreement 

  

	11.1	This Agreement constitutes the whole agreement between the parties as to the subject matter thereof and no agreements, representations or warranties between the parties other than
those set out herein are binding on the parties. 

  

	11.2	No waiver, alteration, or modification of this Agreement shall be valid unless made in writing and signed by authorized representatives of the parties. 

  

	12.	Severability 

  
 In the event, any provision of this Agreement shall be declared invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. 
  

	13.	Headings 

  
 The headings of the articles of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement or to
affect the construction hereof. 
  

	14.	Duration / Termination 

  

	14.1	This Agreement will commence on the 01.01.2006 and will endure for a defined period of 12 years. 

  
 Supply Agreement SunPower Corp./WACKER August 21st, 2005 

 -16- 

 WACKER                POLYSILICON

  

	15.	Applicable Law/ Jurisdiction 

  
 This Agreement shall be construed and the legal relations between the parties hereto shall be determined in accordance with the laws of Germany; the
application of the 1980 United Nations Convention on Contracts for the International Sale of Goods is expressly excluded. 
  
 Exclusive place of jurisdiction shall be Munich. 
  

			
	WACKER-Chemie GmbH	 	SunPower Corp.
	WACKER POLYSILICON	 	 
		
	 Date: 23.08.05
	 	Date: 8-23-05
		
	 /s/
E. Schindlbeck                                  /s/
R. Huber

	 	 /s/ PM Pai

	Ewald Schindlbeck                                Reimund
 Huber	 	PM PAI
	President
                                        
        Director Marketing & Sales	 	COO

  
 Supply Agreement SunPower Corp./WACKER
August 21st, 2005 

 -17- 

 WACKER                POLYSILICON

  
 Appendix A 
  
 Products: 
  
 Specification PCL-NCS (A) 
  
 Annual quantities / Prices: 
  

					
	 Calendar year

	 	 Quantity

	 	 Price (Euro/kg)(*1)

	 2008
	 	*** kg	 	***
	 2009
	 	*** kg	 	***
	 2010
	 	*** kg	 	***
	 2011
	 	*** kg	 	***
	 2012
	 	*** kg	 	***
	 2013
	 	*** kg	 	***
	 2014
	 	*** kg	 	***
	 2015
	 	*** kg	 	***
	 2016
	 	*** kg	 	***
	 2017
	 	*** kg	 	***

  
 Prepayment schedule

  
 The BUYER will pay the below stated amounts to the account of WACKER on
the specified date. 
  
 01.01.2006    EURO *** (*** and ***)

  

	(*1)	WACKER will repay the above prepayment with each shipment by *** the agreed price of *** Euro/kg by *** Euro/kg for the above agreed annual quantity. WACKER’s invoice will
state the agreed price of Euro/kg *** on the invoice, but will make note, that the buyer has only to pay Euro/kg ***. In case the BUYER does fail to take the full amount of the annual quantity in one respective calendar year the *** does not have to
*** the respective amount. 

	***	CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION. 

  
 Supply Agreement SunPower Corp./WACKER August 21st, 2005 

 -18- 

 WACKER                POLYSILICON

  
 Appendix B 
  
 General Conditions of sale 
  
 1. Generally: 
  
 All our supplies and services as well as ail contracts concluded with us are exclusively subject to the following conditions of sale. Terms
of the Purchaser which contradict or which deviate from our sales terms and which are not expressly recognised by us are not valid even if we do not expressly object to them. Where a continuing business relationship exists, all future contracts,
supplies and services are also subject to our conditions of sale. 
  
 2. Offer,
Conclusion of Contract: 
  
 Our offers are subject to change and non-binding.
Orders are only valid if confirmed by us in writing or if recognised by us through the act of delivery. Any additional verbal agreements, supplements and modifications are also only valid if confirmed in writing. 
  
 3. Delivery, Default: 
  
 3.1 Unless otherwise agreed, any dates quoted for delivery are non-binding. 
  
 3.2 We are entitled to make partial deliveries as far as the Purchaser must reasonably accept this in the circumstances of an individual
case. The corresponding invoices issued are payable without regard to whether complete delivery has been made 
  
 3.3 In the event delivery is delayed, the Purchaser may set us a reasonable grace period with the notice that he rejects the acceptance of the delivery item after expiry of the grace period. After the expiry of the
grace period, the Purchaser is entitled to cancel the contract of sale through written notice or to request damages instead of performance. At our request the Purchaser is obligated to state within a reasonable period whether he cancels the contract
due to delay in delivery, seeks damages instead of performance or insists on performance. 
  
 3.4 Our liability is set forth in para. 9. Furthermore in the event of slight negligence, our liability is limited to the invoice value of the respective delivery item. 
  
 4. Return of loan packaging: 
  
 In the event of delayed return (meaning in the event normal unloading times are exceeded) of
loading equipment loading tanks and other loan packaging we reserve the right to change the Purchaser for the costs incurred by us. 
  
 5. Prices: 
  
 5.1 unless otherwise expressly agreed, prices are quoted “ex works” excluding packaging and plus delivery and shipping costs as well as plus any applicable Value Added Tax. 
  
 5.2 The prices valid on the day of dispatch shall apply. Should the latter be higher than the
contractual price, the Purchaser is entitled to cancel the contract with regard to the quantities still to be delivered. Cancellation shall be made within 14 days after notification of said price increase. 
  
 6. Payment: 
  
 6.1 The payment shall be made in Euro to one of our bank accounts indicated on the reverse side. 
  
 6.2 Should Purchaser be in arrears with payment, interest for default shall be due and
payable at 12%, but at least 8% above the respective base interest rate. We reserve the right to claim further damages. If the interest we claim is higher than the statutory interest for delayed payment, the Purchaser has the right to demonstrate
lower damages just as we have the right to show that greater damages were incurred. 
  
 6.3 Should Purchaser be in arrears with payment or should there be reasonable doubts as to Purchaser’s solvency or credit rating, we are without prejudice to our other rights – entitled to require payment in advance for deliveries
not yet made, and to require immediate payment of all our claims arising from the business relation. 
  
 6.4 Bills of exchange and cheques shall be accepted upon separate agreement and only by way of payment. All expenses incurred in this regard shall be borned by the Purchaser. 
  
 6.5 Only uncontested or legally proved claims shall entitle the Purchaser to set-off or
withhold payment. 
  
 7. Force Majeure: 
  
 Events of Force Majeure, in particular strikes, lock outs, operation or transport
interruptions, including at our suppliers, shall suspend the contractual obligations of each party for the period of the disturbance and to the extent of its effects. Should the delays caused exceed a period of 6 weeks, both parties shall be
entitled to cancel the contract, with respect to the contractual performance affected by such delays. No other claims exist. 
  
 8. Quality: 
  
 8.1 All our data especially data relating to product suitability, processing and use, as well as to technical support have been compiled to the best of our knowledge. The Purchaser, however, must still perform his own
inspections and preliminary trials. 
  
 8.2 The Purchaser undertakes to examine
the goods immediately after delivery with respect to any defects concerning quality and suitability of purpose and object to ascertainable defects. Sample testing shall also be performed if this can be reasonably expected of the Purchaser. Failure
to proceed in aforesaid manner shall result in the goods being regarded as accepted. 
  
 8.3 Complaints must be made within 8 days after receipt of the goods. In case of hidden faults, however, complaints are to be made immediately on discovery, within one year after receipt of the very latest. Said claims shall only be taken
into consideration if and when made in writing and with the relevant documentation attached. To comply with the time limit it shall be sufficient if the complaint is sent in good time. 
  
 8.4 We are not liable on the basis of public statements by us, the manufacturer or his agents. If we were not aware of the statement or were
not required to have knowledge thereof, the statement was already corrected at the time of the purchase decision or the Purchaser cannot show that the statement influenced his purchase decision. 
  
 8.5 We are not liable for defects which only marginally reduce the value or the suitability
of the object. A marginal defect exists in particular if the defect can be removed by the Purchaser himself with insignificant effort. 
  
 8.6 If the Purchaser requests replacement performance due to a defect, we may choose whether we remove the defect ourselves or deliver a defect-free object as a
replacement. The right to reduce the price or cancel the contract in the event of unsuccessful replacement performance shall remain unaffected. 
  
 8.7 Where complaints are justified, the goods may only be returned to us at our expense if after we receive notice of the defect we do not offer to collect or dispose of
the goods. 
  
 8.8 If increased costs arise because the Purchaser has transferred
the goods to a place other than his commercial place of business, we shall charge the Purchaser for the increased costs in connection with the removing of the defect, unless the transfer corresponds to the designated use of the object. 

 
 8.9 Damage and claims for reimbursement of expenses shall remain unaffected as far as not
excluded by para. 9. 
  
 8.10 All claims due to a defect are subject to a
limitation period of one year after delivery of the object. No warranty is made for used objects. The statutory limitation period for objects which are used for a building structure in accordance with their usual manner of use, and which cause the
defectiveness thereof, shall remain unaffected. 
  
 8.11 The rights of the
Purchaser under §§ 478, 479 German Civil Code remain unaffected. 
  
 9. Liability: 
  
 Our liability is excluded regardless of the
legal grounds. 
  
 This shall not apply in the event of intentional actions or
gross negligence by us or our legal representatives or agents or in the event of breach of material contractual duties. 
  
 In the event of a slightly negligent breach of material contractual duties, our liability is limited to twice the invoice value of the respective delivery item. For
damages due to delayed performance para. 3.4 shall also apply. Our liability for damages due to injury to life, the body or health, the liability based on a guarantee and under mandatory statutory provisions, in particular the Product Liability Act,
remain unaffected. 
  
 10. Reservation of Ownership: 
  
 10.1 The goods that have been sold remain our sole property until all outstanding debts
arising from the business connection with the Purchaser have been paid in full. The Purchaser has power of disposal of the purchased goods in the ordinary course of business, or he may process the goods until revocation by us. 
  
 10.2 Reservation of ownership and power of disposal as laid down in clause 10.1. also apply
to the full value of the manufactured goods produced by processing, mixing and blending or combining our goods. In each case we qualify as the manufacturer. In cases where the goods are processed, mixed and blended or combined with those of a third
party and where the reservation of the latter continues to apply, then we acquire joint ownership in proportion to the invoice value of those processed goods. If security rights of a third party are in fact or in law below that share, the difference
will be to our benefit. 
  
 10.3 If the Purchaser resells our goods to third
parties he hereby assigns the entire resulting payment claim – or in the amount of our joint share therein (see para. 10.2) – to us. In the event the parties agree on a current account, the respective balance amounts shall be assigned.
However, the Purchaser shall be entitled to collect such payment claim on our behalf until we revoke such right or until his payments are discontinued. The Purchaser is only authorized to make assignment of these claims – even only for the
purpose of collection by way of factoring – with our express written consent. 
  
 10.4 The Purchaser shall immediately give notice to us if any third party raises any claim with respect to such goods or claims which are owned by us. 
  

10.5 If the value of the collateral exceeds our accounts receivable by more than 20% then we will release collateral on demand and at our discretion. 
  
 10.6 We are also entitled to take back goods on the basis of the reservation of title, even
if we have not previously cancelled the contract. If products are taken back by way of the exercise of the reservation of ownership, this shall not constitute cancellation of the contract. 
  
 10.7 If the laws of the country in which the goods are located after delivery do not permit
the Vendor to retain the title to said goods, but allow the retention of other similar rights to the delivery item the Purchaser shall provide us with such other equivalent right. The Purchaser undertakes to assist us in the fulfillment of any form
requirements necessary for such purpose. 
  
 11. Place of Fulfillment,
Applicable Law and Jurisdiction: 
  
 11.1 The originating point of the goods
shall, in each case, be the place of fulfillment for the delivery. Munich shall be the place of fulfillment for payment. 
  
 11.2 Exclusively the laws of the Federal Republic of Germany shall apply between the parties. The application of the 1980 Unified Nations Convention on Contracts for the
International Sale of Goods is expressly excluded. 
  
 11.3 If the Purchaser is a
merchant or does not have a general place of jurisdiction in Germany, the place of jurisdiction is Munich. We shall, however, have the right to also bring a claim against the Purchaser at his general place of jurisdiction. 
  
 Munich, 15th May 2002 
  
 Supply Agreement SunPower Corp./WACKER August 21st, 2005 

 -19-Ownership Interest Purchase Agreement

 Exhibit 10.1 
  
 OWNERSHIP INTEREST PURCHASE AGREEMENT 
  
 THIS OWNERSHIP INTEREST PURCHASE AGREEMENT (together with all Exhibits, Schedules and other documents and instruments
incorporated herein by reference, the “Agreement”) is made and entered into as of the 3rd day of October, 2005, by and among Harbinger Private Equity Fund I, L.L.C., Keystone Group Kids, Inc., Michael Lindley (“Lindley”), Marty
Weber, Ameris Healthcare Investments, LLC, Rainer Twiford, Al Smith (“Smith”), Mike White, Rodney Cawood (“Cawood”), Buddy Turner, Jeff Cross, Gail Debiec, Brad Gardner, Brad Williams, Don Wert, Rob Minor, Mike McCulla, Jim
Shaheen, Rod Gaeta (each a “Seller” and collectively, the “Sellers”), and Universal Health Services, Inc., a Delaware corporation (“Buyer”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Sellers collectively own one-hundred percent of the issued and outstanding ownership interests (“Ownership Interests”) issued by KEYS
Group Holdings LLC, a Delaware limited liability company (“Keys”), as of the date hereof; and 
  
 WHEREAS, Keystone Education and Youth Services, LLC, a Tennessee limited liability company (“Keystone”), and Children’s Comprehensive
Services, Inc., a Tennessee corporation (“Childrens”), are each either a wholly owned limited liability company or corporate subsidiary of Keys; and 
  

WHEREAS, Keystone/CCS Partners LLC, a Delaware limited liability company (“KCP”), is eighty-five percent (85%) owned by Keys and fifteen
percent (15%) owned by Childrens; and 
  
 WHEREAS, Keystone,
Childrens and KCP are sometimes referred individually as a “Keys Sub” and sometimes collectively referred to as the “Keys Subs”; and 
  
 WHEREAS, the Keys Subs collectively own one-hundred percent of the ownership interests in the entities listed on Exhibit A hereto (collectively,
the “Keys Companies”); and 
  
 WHEREAS, the Kids First
Foundation (“Foundation”) is a non-profit tax exempt entity whose purpose is to provide education and residential facility services; and 
  
 WHEREAS, collectively, Keys, the Keys Subs and the Keys Companies are sometimes referred to as the “Keys Group.” The Keys Group provides group
home, behavioral health, juvenile detention, educational, and other treatment related services through its wholly owned and operated facilities set forth on Exhibit B hereto (the “Facilities”); and 
  
 WHEREAS, Buyer desires to purchase one hundred percent of the Ownership
Interests which will be issued and outstanding immediately prior to the Closing (as defined in Section 3.1 below) and Sellers desire to sell to Buyer the Ownership Interests owned by them and to provide for the sale to Buyer of the
additional Ownership Interests to be held by the Option Holders (as defined in Section 2.6 below) immediately prior to the Closing, all on the terms and conditions set forth in this Agreement. 

 NOW, THEREFORE, for and in consideration of the premises, the mutual promises and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 
  
 ARTICLE 1 
  
 TERMS 
  
 1.1 Accounting Terms. Accounting terms used in this Agreement and not
otherwise defined herein shall have the meanings attributed to them under GAAP. For purposes of this Agreement, “GAAP” shall mean generally accepted accounting principles used in the United States. 
  
 1.2 Defined Terms. All capitalized terms used in this Agreement shall
have the meanings ascribed to such terms as set forth throughout this Agreement. 
  
 ARTICLE 2 
  
 PURCHASE AND SALE 
  
 2.1 Purchase and
Sale. Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 3.1 below), each Seller shall sell, transfer and deliver to Buyer, and Buyer shall purchase from each Seller, all of such
Seller’s right, title and interest in and to all of the Ownership Interests owned by such Seller, as more specifically identified on Schedule 2.1 hereto, all to be free and clear of all liens, charges, claims, pledges, security
interests, and encumbrances of any nature whatsoever (collectively, “Liens”). Subject to the terms and conditions of this Agreement, at the Closing, each Option Holder (as such term is defined in Section 2.6 below) all of whom
shall have executed a joinder to this Agreement as contemplated by Section 2.6 hereof (each, a “Selling Option Holder” and, together with the Sellers, “Selling Persons”), shall sell, transfer and deliver to Buyer, and
Buyer shall purchase from each Selling Option Holder, all of such Selling Option Holder’s right, title and interest in and to all of the Ownership Interests that will be owned by such Selling Option Holder, as more specifically identified on
Schedule 2.1 hereto, immediately prior to the Closing, all to be free and clear of all Liens. 
  
 2.2 Purchase Price. The aggregate purchase price for all of the Ownership Interests shall be an amount equal to Two Hundred Ten Million Dollars
($210,000,000) (“Purchase Price”), payable in the manner set forth below. The Purchase Price is subject to adjustment as set forth in Sections 2.3 and 2.7 below. Following the payments described in Sections 3.5(a)(i) through
3.5(a)(vii), the net proceeds of the Purchase Price shall be allocated among the Selling Persons in accordance with their respective proportionate ownership of the Ownership Interests as set forth on the signature page hereto or joinder
agreement, as applicable, executed by such Selling Person (“Pro Rata Share”). 
  
 (a) Reserved. 
  
 (b) On the
Closing Date (as defined in Section 3.1 below), Buyer shall deposit or cause to be deposited into an interest bearing escrow account, an amount equal to Sixteen Million Five Hundred Thousand Dollars ($16,500,000) (the “Escrow
Amount”), with a mutually acceptable escrow agent (the “Escrow Agent”) under the terms and provisions of an escrow agreement in substantially the form of Exhibit C hereto (the “Escrow Agreement”), which such Escrow
Amount shall be held in escrow by the Escrow Agent until determination and payment of the Escrow Amount as set forth in the Escrow Agreement. Such Escrow Amount shall be used: (i) to help satisfy any indemnification claims made by Buyer under
this Agreement; and (ii) to help satisfy the Sellers’ obligations pursuant to Sections 2.10, 2.11, 2.12, 2.13 and 2.14, all amounts due to Buyer, if any, and amounts owed to the Independent Auditor 

 (as such term is defined in Section 2.3) by Selling Persons pursuant to the Aggregate Net Working Capital (as
such term is defined in Section 2.3 below) adjustment, and (iii) for such other items mutually agreed to by the parties. Any interest or other earnings on the Escrow Amount shall be paid by the Escrow Agent on a pro-rata basis to
the party or parties to this Agreement in accordance with the proportionate share of the Escrow Amount delivered to such party or parties. In the event that, before the end of the fourteenth (14th) month following the Closing, Buyer has not submitted claims for indemnification under Section 7.10(c) of this Agreement with an
aggregate value in excess of One Hundred Thousand Dollars ($100,000), Five Million Dollars ($5,000,000) of the Escrow Amount, together with the interest accrued thereon, shall be released to Selling Persons in accordance with the terms of the Escrow
Agreement as soon as practicable and divided among the Selling Persons in accordance with the Pro Rata Share. The parties further agree that in the event that the entire One Million Five Hundred Thousand Dollars ($1,500,000) portion of the Escrow
Amount that has been designated by the parties to help satisfy any amounts due to Buyer or the Independent Auditor by Selling Persons pursuant to the Aggregate Net Working Capital adjustment (“Aggregate Net Working Capital Designated
Amount”) is not required to be used to pay Buyer amounts due to Buyer under Section 2.3 or not required to be used to pay amounts due to the Independent Auditor by Selling Persons under Section 2.3, then within ten
(10) days following the final determination of the Aggregate Net Working Capital (as set forth in Section 2.3 below), the unused portion of Aggregate Net Working Capital Designated Amount, together with the interest accrued thereon,
shall be released to Selling Persons in accordance with the terms of the Escrow Agreement and divided among the Selling Persons in accordance with the Pro Rata Share. Notwithstanding anything to the contrary set forth in this Agreement, (i) the
Selling Persons shall be deemed jointly and severally liable with respect to claims made under this Agreement only to the extent of the funds then held by the Escrow Agent pursuant to the Escrow Agreement; and (ii) Buyer shall obtain payment of
any claim hereunder from the funds held by the Escrow Agent and, to the extent such funds are insufficient or unavailable, from the Selling Persons severally in accordance with their respective Pro Rata Share. 
  
 2.3 Purchase Price Working Capital Adjustment. 
  
 (a) The Purchase Price set forth in Section 2.2 above is based
on the requirement that the Aggregate Net Working Capital of the Keys Group (as such term is defined on Exhibit D hereto) as of the Closing Date shall not be less than Thirteen Million Three Hundred Twenty-Five Thousand Dollars ($13,325,000)
(the “Target Amount”). 
  
 (b) Within one hundred twenty
(120) days following the Closing, Buyer and the Sellers’ Representative (as defined in Section 9.12) shall mutually agree upon a final determination of the Aggregate Net Working Capital of the Keys Group as of the Closing Date
and such determination shall be binding upon all the parties. Such determination shall be made in a manner that is consistent with: (i) the accounting principles and illustrative calculation set forth on Exhibit E hereto; (ii) the
historical practices of each member of the Keys Group, consistently applied; and (iii) Financial Statements. For purposes of determining the Aggregate Net Working Capital of the Keys Group as of the Closing, after the Closing, Buyer shall cause
the Keys Group, at the sole cost and expense of the Selling Persons (i) to permit agents of Sellers’ Representative, during normal business hours, to have reasonable access to, and to examine and make copies of, all books and records of
the Keys Group which are in the possession of Buyer or its affiliates (including the members of the Keys Group); and (ii) to make available for consultation the financial personnel and agents of the Keys Group, including, without limitation,
its accountants. Notwithstanding the foregoing, in the event Buyer and the Sellers’ Representative are unable to agree on the Aggregate Net Working Capital of the Keys Group as of the Closing Date within such one hundred twenty (120) day
period, Buyer and Sellers’ Representative shall mutually engage the Philadelphia office of Deloitte & Touche LLP or such other independent accounting firm agreed upon by 

 Buyer and Sellers’ Representative (the “Independent Auditor”) who using: (i) the accounting
principles and illustrative calculation set forth on Exhibit E hereto; (ii) the historical practices of each member of the Keys Group, consistently applied by each such member; and (iii) the Financial Statements, shall make a final
determination of the Aggregate Net Working Capital of the Keys Group as of the Closing Date. The written report (the “Report”) of the Independent Auditor shall be binding upon the parties and the fees and expenses of the Independent
Auditor shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by Selling Persons; provided, that Selling Persons shall cause the Escrow Agent to pay their portion of such fees and expenses, if any, out of the Aggregate Net
Working Capital Designated Amount, but only to the extent funds to be paid to Buyer pursuant to Section 2.3(c) are less than the Aggregate Net Working Capital Designated Amount. Notwithstanding any statement contained in this Agreement
to the contrary, if the Report is not, for whatever reason, finalized and delivered to Sellers’ Representative and Buyer within one hundred eighty (180) days of the Closing, then the dispute of the parties regarding the Aggregate Net
Working Capital of the Keys Group as of the Closing Date may be submitted for resolution by Sellers’ Representative or Buyer to binding arbitration in accordance with Section 9.16. 
  
 (c) Within five (5) days following the final determination of the
Aggregate Net Working Capital of the Keys Group as of the Closing Date in the manner set forth in Section 2.3(b) above, to the extent required, a final adjustment to the Purchase Price will be made by Buyer or Selling Persons. In the
event that the Aggregate Net Working Capital of the Keys Group as of the Closing Date is less than the Target Amount, the Purchase Price shall be reduced dollar for dollar by the amount that the Aggregate Net Working Capital of the Keys Group as of
the Closing Date is less than the Target Amount, Selling Persons shall cause the Escrow Agent to pay such difference to Buyer out of the Escrow Amount within the five (5) day period set forth above. In the event that the Aggregate Net Working
Capital of the Keys Group as of the Closing Date is greater than the Target Amount, the Purchase Price shall be increased dollar for dollar by the amount that the Aggregate Net Working Capital of the Keys Group as of the Closing Date exceeds the
Target Amount and Buyer shall pay such difference to the account or accounts designated by the Sellers’ Representative within the five (5) day period set forth above and such amounts shall be divided among the Selling Persons by the
Sellers’ Representative in accordance with their respective Pro Rata Share. 
  
 (d) The provisions of this Section 2.3 shall be the sole and exclusive remedy for any disputes or disagreements concerning the determination of the Aggregate Net Working Capital of the Keys Group. Buyer
shall not be entitled to seek indemnification with respect to a breach of any representation or warranty made by Management Sellers or Sellers that is based on the Aggregate Net Working Capital of the Keys Group. 
  
 2.4 Reserved. 
  
 2.5 Severance Payments. Selling Persons agree that they are responsible for paying, or for causing the Keys Group to
pay prior to the Closing, all of the severance payments due to employees of the Keys Group as a direct result of the consummation of the transactions set forth in this Agreement, including, without limitation, the $3,904,778 to be divided among the
persons set forth on Schedule 2.5 hereto as determined by the Keys Group prior to Closing (“Severance Payments”). Management Sellers (as defined in Section 4.1) represent and warrant that, other than those set forth on
Schedule 2.5 hereto, there are no payments arising solely in connection with the consummation of the transactions set forth in this Agreement that have been promised by the Keys Group or are due to any employee by the Keys Group. In the event
that any portion of the Severance Payments have not been paid as of the Closing (“Unpaid Severance”), at Closing, Selling Persons shall cause the Unpaid Severance amounts to be paid out of the Purchase Price proceeds. On the Closing Date,
Sellers’ Representative shall deliver releases (the “Severance Releases”) to Buyer, in a form reasonably satisfactory to Buyer, executed by each of the persons listed on Schedule 2.5 hereto. 

 2.6 Option Holders Set forth on Schedule 2.6 hereto is a list of all persons (the
“Option Holders”) who hold options and/or warrants to acquire shares of Keys ownership interests. Immediately prior to the Closing, all of the Keys outstanding options and/or warrants held by the Option Holders will become immediately
exercisable and fully vested in accordance with their terms and each Option Holder will exercise such Option Holder’s options and/or warrants and will satisfy the applicable exercise price and applicable withholding Taxes through the cashless
exercise arrangement described below. To facilitate the cashless exercise arrangement, Keys shall, immediately prior to the exercise of the options and/or warrants, establish a per share fair value of Keys common ownership interest (the “Per
Share Value”), taking into consideration the Purchase Price (and any adjustments required by this Agreement which are known prior to Closing) and the number of shares of Keys common Ownership Interests then outstanding and shares of Keys common
Ownership Interests issuable upon the exercise of outstanding options and/or warrants. Upon exercise of the options and/or warrants, each Option Holder will receive a number of whole and fractional shares of Keys common Ownership Interests equal to
(i) the aggregate spread value (i.e., the excess of the Per Share Value over the exercise price) of such Option Holder’s options and/or warrants divided by the Per Share Value (ii) less the amount of applicable withholding
Taxes. 
  
 2.7 Cash Retention and Adjustment. Other than
(i) routine petty cash amounts held by a member of the Keys Group in connection with a Facility in the aggregate amount of $80,000 (“Petty Cash”) and (ii) the net cash proceeds to be received by Keys (the “Magnolia
Cash”) in connection with the sale of real property by Keystone NPS, LLC located on Magnolia Avenue, Riverside, California (assuming such sale is consummated prior to the Closing), which amount the Management Sellers anticipate to be $886,000,
Selling Persons shall be entitled to retain any cash on the balance sheet of Keys as of the Effective Date (as hereinafter defined) (“Book Cash”). It is contemplated that Book Cash as of the Effective Date will equal the sum of the Petty
Cash plus the Magnolia Cash, and that Keys will retain sufficient cash in its bank accounts to satisfy all checks which are outstanding as of the Effective Date. In the event that the Book Cash as of the Effective Date is greater than the sum of the
Petty Cash plus the Magnolia Cash (after giving effect to any distributions of cash to the Selling Persons in connection with the transactions contemplated by this Agreement), the Purchase Price shall be increased by the amount of such excess and
Buyer shall, within five (5) days after determination of such excess, pay such excess to the account(s) designated by the Sellers’ Representative, which shall distribute such amounts to the Selling Persons, according to their Pro Rata
Share. In the event that the Book Cash as of the Effective Date is less than the sum of the Petty Cash plus the Magnolia Cash (after giving effect to any such distributions), the Purchase Price shall be decreased by the amount of such deficiency and
Selling Persons (acting through the Sellers’ Representative) shall cause such amount to be paid to Buyer from the funds held by the Escrow Agent. The determination of Book Cash as of the Effective Date shall be made in accordance with
(i) the procedures set forth on Schedule 2.7 hereto; (ii) GAAP; and (iii) Financial Statements. Nothing contained herein shall permit either the Selling Persons or Buyer to have any rights with respect cash amounts as
listed in the “cash” section of the consolidated balance sheet in either the Resident Recreational Account or the Cash on Hand-Patient Trt Account. 
  
 2.8 Satisfaction of Indebtedness. On the Closing Date, Selling Persons shall use a portion of the Purchase Price to pay, discharge and satisfy in
full those obligations set forth on Schedule 2.8 hereto (collectively the “Indebtedness Amount”). 
  
 2.9 Options and Severance Payments Tax Benefit. Selling Persons, Sellers’ Representative and Buyer acknowledge that the Keys Group will be
generally entitled to claim a deduction for Tax 

 purposes for the taxable period ending on or including the Closing Date for the amount of the Severance Payments paid to
employees of the Keys Group and the value of the Keys common Ownership Interests received by the Option Holders on the cashless exercise arrangement as described in Section 2.5 and Section 2.6. The calculation of such tax
deduction (the “Tax Deduction”) is set forth in a letter delivered to Buyer as of the date hereof (the “Letter”). When Buyer or the Keys Group files a Tax Return that utilizes the option and severance Tax benefit, Buyer shall pay
the utilized amount, not to exceed in the aggregate the amount set forth in the Letter, to the account or accounts designated by the Sellers’ Representative within five (5) days of the filing of such Tax Return and such amounts shall be
divided among the Selling Persons by the Sellers’ Representative in accordance with their respective Pro Rata Share. If, after paying the amount set forth in the Letter to Selling Persons, Buyer is required to pay all or a portion of the Tax
Deduction to the applicable Authority, Selling Persons shall reimburse Buyer for such amount, together with interest and penalties, and pay in accordance with the respective Pro Rata Share. 
  
 2.10 Professional Liability and Workers Compensation Accrual.

  
 (a) The parties agree and acknowledge that the consolidated
balance sheet of the Keys Group dated as of May 31, 2005 included accruals for current and long term professional liability matters in the amount of $1,452,423 (the “Initial Professional Liability Accrual”) and for current and long
term workers compensation matters in the amount of $3,919,833 (the “Initial WC Accrual” and, together with the Initial Professional Liability Accrual, the “Initial Accruals”). During the five year period following the Closing,
Buyer shall have the right to make a one-time election to invoke the provisions of Section 2.10(b) and 2.10(c). Buyer shall exercise such right by written notice to Sellers’ Representative. 
  
 (b) Following the election of Buyer as set forth above, the Nashville office
of Ernst & Young (in coordination with such other offices of Ernst & Young as may be reasonably necessary), or such other accounting or actuarial firm acceptable to Buyer and Sellers’ Representative (the “Actuary”),
shall determine the amounts that would have been proper for Keys Group to accrue as of May 31, 2005 for professional liability (the “Professional Liability Look Back Amount”) and workers compensation (the “WC Lookback
Amount” and, together with the Professional Liability Lookback Amount, the “Lookback Amounts”) if the actuarial analysis that was used in developing the Initial Accruals was able to include the experience of Keys Group between
May 31, 2005 and the date on which Buyer exercises its rights under Section 2.10(a) (the “Lookback Date”). Such determination shall be made in accordance with (1) the terms and conditions of this Agreement;
(2) the actuarial methods and assumptions used in developing the Initial Accruals, including without limitation those attached hereto as Exhibit 2.10, together with those used historically by Keys Group with respect to such matters; and
(3) other actuarial practices and assumptions of the American Society of Actuaries. Buyer and Sellers’ Representative shall instruct the Actuary to use its reasonable best efforts to provide Buyer and Sellers’ Representative with a
written report setting forth the Lookback Amounts within sixty (60) days after the Lookback Date. The fees and expenses of the Actuary shall be borne fifty percent (50%) by Buyer and fifty percent (50%) by Selling Persons. Selling
Persons may cause Escrow Agent to pay their portion of such fees and expenses out of the funds then held by the Escrow Agent, if any; provided that in the event the funds then held by the Escrow Agent are insufficient to pay such expenses in full,
the Selling Persons shall be obligated to pay such deficiency in accordance with their respective Pro Rata Share. 
  
 (c) Within five (5) days following the final determination of the Lookback Amounts in the manner set forth in Section 2.10(b), an
adjustment to the Purchase Price will be made by Buyer or Selling Persons. In the event that the Lookback Amounts are less than the Initial Accruals, the Purchase Price shall be increased by 50% of the amount by which the Lookback Amounts are less
than the Initial 

 Accruals and Buyer shall pay such 50% to the account or accounts designated by the Sellers’ Representative within
the five (5) day period set forth above and such amounts shall be divided among the Selling Persons in accordance with their respective Pro Rata Share. In the event that the Lookback Amounts are more than the Initial Accruals, the Purchase
Price shall be reduced by 50% of the amount by which the Lookback Amounts are greater than the Initial Accruals and Selling Persons (acting through the Sellers’ Representative) shall cause the Escrow Agent to pay such 50% to Buyer out of the
Escrow Amount within the five (5) day period set forth above; provided that in the event the funds then held by the Escrow Agent are insufficient to pay such difference to Buyer, Selling Persons shall be obligated to pay Buyer such deficiency
in accordance with their respective Pro Rata Share. Notwithstanding the foregoing, in no event shall Selling Persons be obligated to pay, or to require the Escrow Agent to pay, Buyer more than 100% of the Initial Accruals. 
  
 (d) The provisions of this Section 2.10 shall be the sole and
exclusive remedy for any disputes or disagreements concerning the accruals of Keys Group with respect to professional liability and workers compensation matters. Buyer shall not be entitled to seek indemnification with respect to a breach of any
representation or warranty made by Management Sellers or Sellers with respect to the accruals for professional liability and workers compensation matters, including without limitation those set forth in Section 4.1(g). 
  
 2.11 Taxes. 
  
 (a) The parties agree and acknowledge that the consolidated balance sheet of
the Keys Group dated as of June 30, 2005 included a current liability for accruals with respect to federal and state income Taxes of the Keys Group that is presented as Income Taxes Payable and Other Short Term Liabilities in the amount of
$4,370,608 (the “June Tax Accruals”) (such June Tax Accruals less the amount determined to be applicable to deferred federal and state income Taxes in accordance with Section 2.11(b) (the “June Deferred Income Tax
Accrual”) and less the Contingency Reserve (as defined hereafter in Section 2.11(c)) collectively, the “June Income Tax Accrual”). In the event that, between the Closing and the five year period following the
Closing (“Tax Date”), Buyer or the Keys Group has liability for any federal or state income Taxes with respect to the Keys Group for any period ending on or before September 30, 2005 (a “Pre-Closing Period”) (excluding the
amount of the Options and Severance Payments Tax benefit as determined in Section 2.9) in excess of the June Income Tax Accrual, the Purchase Price shall be decreased by such amount and Selling Persons (acting through the Sellers’
Representative) shall cause the Escrow Agent to pay such amounts to Buyer out of the Escrow Amount within thirty (30) days after receipt of the applicable invoice(s) from Buyer; provided that in the event the funds then held by the Escrow Agent
are insufficient to pay Buyer in full, the Selling Persons shall be obligated to pay Buyer such deficiency in accordance with their respective Pro Rata Share. In the event that, between the Closing and the Tax Date, the Buyer’s or Keys
Group’s liability for any federal or state income Taxes with respect to the Keys Group for any Pre-Closing Period (excluding the amount of the Options and Severance Payments Tax benefit as determined in Section 2.9) is less than the June
Income Tax Accrual, the Purchase Price shall be increased by such amount and Buyer shall pay such difference to the account or accounts designated by the Sellers’ Representative within five (5) days following the Tax Date, which amounts
the Sellers’ Representative shall distribute among the Selling Persons in accordance with their respective Pro Rata Share. For purposes of this Section 2.11(a), income Taxes with respect to any taxable period beginning prior to
September 30, 2005 but ending after September 30, 2005 shall be allocated to the Pre-Closing Period using an interim closing of the books method and such income Taxes shall be deemed to be income Taxes of a Pre-Closing Period. The
provisions of this Section 2.11(a) shall be the sole and exclusive remedy for any disputes or disagreements concerning the accruals of Keys Group with respect to federal and state income Taxes. Buyer shall not be entitled to seek
indemnification with respect to a breach of any representation or warranty made by Management Sellers or Sellers with respect to the accruals for Taxes, including without limitation those set forth in Section 4.1(e) and (g). 

 (b) The parties further agree and acknowledge that Buyer and the Sellers’ Representative shall
determine the portion of the June Tax Accruals that should have been characterized as the June Deferred Income Tax Accrual as of June 30, 2005. Such determination shall be based upon the completion of a tax provision performed within sixty
(60) days of the completion of any Tax Return that includes the June 30, 2005 tax period date in a manner that is consistent with the historical practices of each member of the Keys Group, consistently applied. 
  
 (c) The parties further agree and acknowledge that Keys included a current
liability for federal and state income Tax contingencies (the “Contingency Reserve”) in its June Tax Accruals in the amount of $2,086,504. In the event that, between the Closing and the Tax Date, Buyer or the Keys Group pays any federal or
state income Taxes with respect to the Keys Group for the Pre-Closing Period in excess of the Contingency Reserve as a result of an applicable Authority making adjustments to federal or state income Tax Returns of the Keys Group with respect to a
Pre-Closing Period, the Purchase Price shall be decreased by such amount and Selling Persons (acting through the Sellers’ Representative) shall cause the Escrow Agent to pay such amounts to Buyer out of the Escrow Amount within thirty
(30) days after receipt of the applicable invoice(s) from Buyer; provided that in the event the funds then held by the Escrow Agent are insufficient to pay Buyer in full, the Selling Persons shall be obligated to pay Buyer such deficiency in
accordance with their respective Pro Rata Share. 
  
 2.12
Construction Projects. The parties acknowledge that various construction and/or renovation projects of the Keys Group will not be completed prior to Closing. With respect to those construction and/or renovation projects described on
Schedule 2.12 (each, a “Project” and collectively, the “Projects”), Buyer shall cause Keys to send Sellers’ Representative a monthly invoice of the construction and/or renovation costs paid by any member of the Keys
Group between the Closing and the twelve month period following Closing pursuant to the applicable Contract (without giving effect to any change orders issued in connection therewith following Closing or amendments to such Contracts entered
following the Closing). In the event that the amount(s) reflected on any such invoice, in the aggregate, exceeds (i) the sums paid by the applicable member of the Keys Group prior to Closing with respect to such Project plus
(ii) the applicable accrual made with respect to that Project as set forth in Schedule 2.12 (the “Project Accruals”), the Purchase Price shall be reduced by such amount(s) and Selling Persons (acting through the Sellers’
Representative) shall cause the Escrow Agent to pay such amounts to Buyer out of the Escrow Amount within thirty (30) days after receipt of the applicable invoice(s). Notwithstanding the foregoing, in no event shall Selling Persons be obligated
to pay, or to require the Escrow Agent to pay, Buyer more than the difference between the sums paid by the applicable member of the Keys Group prior to Closing with respect to such Project plus the applicable Project Accruals and
(ii) the specified amount, if any, required to be paid by the Keys Group pursuant to the applicable Contract as set forth on Schedule 2.12. Buyer shall not be entitled to seek indemnification with respect to a breach of any
representation or warranty made by Management Sellers or Sellers with respect to the accruals for the Projects, including without limitation those set forth in Section 4.1(g). 
  
 2.13 Guaranty. In the event that, as of the Closing, the amount outstanding pursuant to the Foundation’s line of
credit from First Tennessee exceeds One Million One Hundred Thousand Dollars, the Purchase Price shall be decreased by such excess and Selling Persons (acting through the Sellers’ Representative) shall cause the Escrow Agent to pay such excess
to Buyer out of the Escrow Amount within five (5) days after the Closing. The provisions of this Section 2.13 shall be the sole and exclusive remedy for any disputes or disagreements concerning the accruals of the Keys Group with

 respect to the Foundation’s line of credit. Buyer shall not be entitled to seek indemnification with respect to a
breach of any representation or warranty made by Management Sellers or Sellers with respect to the accruals for the Foundation’s line of credit, including without limitation those set forth in Section 4.1(g). 
  
 2.14 Notes. Following the Closing, the Buyer shall provide
Seller’s Representative with written notice (the “Promissory Notice”) of the failure of the applicable member of the Keys Group to receive amounts due pursuant to the promissory notes set forth on Schedule 2.14 (the
“Notes”) after the Closing. The Promissory Notice shall include an offer to convey the Notes, together with any security therefor, to Selling Persons in exchange for cash in an amount equal to the discounted cash flows that would otherwise
be due under the applicable Note (using the interest rate and remaining term set forth in the applicable Note) (the “Note Price”). Sellers’ Representative shall send Buyer written notice of the acceptance of the offer within fifteen
(15) days after the receipt of the Promissory Notice. As soon as reasonably practical after such acceptance, (A) Sellers’ Representative and Buyer shall execute and deliver such documents and instruments of conveyance as may be
reasonably necessary or appropriate to effect the transfer of the Notes and security therefore; and (B) the Purchase Price shall be decreased by the Note Price and Selling Persons (acting through the Sellers’ Representative) shall cause
the Escrow Agent to pay the Note Price to Buyer out of the Escrow Amount; provided that in the event the funds then held by the Escrow Agent are insufficient to pay Buyer in full, the Selling Persons shall be obligated to pay Buyer such deficiency
in accordance with their respective Pro Rata Share. The provisions of this Section 2.14 shall be the sole and exclusive remedy for any disputes or disagreements concerning the accruals of Keys Group with respect to the Notes. Buyer shall
not be entitled to seek indemnification with respect to a breach of any representation or warranty made by Management Sellers or Sellers with respect to the accruals for the Notes, including without limitation those set forth in
Section 4.1(g). 
  
 ARTICLE 3 
  
 CLOSING 
  
 3.1 Closing Date. The sale and purchase of the Ownership Interests
shall be consummated at a closing (the “Closing”) to be held at 10:00 a.m. prevailing time, at such location as agreed upon by the parties. The Closing shall occur within ten (10) days after the satisfaction or waiver of all
conditions precedent specified in Article 6 or such other mutually agreeable date after the satisfaction or waiver of all the conditions precedent specified in Article 6 (the “Closing Date”). It is the parties’ intention that the
Closing occur on or before October 7, 2005. In the event that the Closing occurs on or by October 7, 2005, the Closing shall be effective as of 12:00 a.m., October 1, 2005. Otherwise, the Closing shall be effective as agreed in
writing by Buyer and Sellers’ Representative (the “Effective Date”). If the Closing does not occur on or before October 31, 2005 or such other date that the Buyer and Sellers’ Representative have mutually agreed upon in
writing, then this Agreement may be terminated in accordance with Section 8.1(e). 
  
 3.2 Deliveries of Sellers’ Representative and Management Sellers. At the Closing, Sellers’ Representative shall deliver (or cause to be delivered) to Buyer the following: 
  
 (a) duly executed originals of such assignments and other instruments of
sale, conveyance, transfer and assignment as are necessary or appropriate to sell, convey, transfer and assign to Buyer all of Selling Persons’ right, title and interest in and to all of the Ownership Interests, in form and substance reasonably
satisfactory to the parties; 

 (b) certificate of Management Sellers dated as of the Closing Date, certifying that all conditions
specified in Sections 6.1(a) and 6.1(c) have been fulfilled and that all conditions specified in Section 6.2 (other than Sections 6.2(a) and 6.2(c)) have been fulfilled or that the satisfaction of any of such conditions has
been waived; 
  
 (c) certificates of each Selling Person that is
not an individual dated as of the Closing Date: (i) certifying the signatures and authority of the persons/entities, executing this Agreement and all agreements and documents contemplated hereby on behalf of such Selling Person; and
(ii) certifying the resolutions of each Selling Person who is not an individual authorizing the execution, delivery and performance of this Agreement and the execution, delivery and performance of all agreements, documents and transactions
contemplated hereby and the consummation of all transactions and other commitments and obligations contemplated by this Agreement; 
  
 (d) reserved; 
  
 (e) the Escrow Agreement executed by Selling Persons and the Escrow Agent; 
  
 (f) notwithstanding that this transaction is a purchase of Ownership Interests, the consent of each third-party to the
Contracts (as such term is defined in Section 4.1(i) below) listed on Schedule 6.1(h)(i); 
  
 (g) resignations of each of the directors and officers of each member of the Keys Group; 
  
 (h) a release in substantially the form set forth on Exhibit F hereto (“Release”) executed by each of the
Selling Persons; 
  
 (i) evidence that each of the options and
warrants set forth on Schedule 2.6, has either been exercised or terminated; 
  
 (j) evidence that each option and warrant holder who exercised his/her/its options and/or warrants on or prior to the Closing has executed and delivered to Buyer a joinder to this Agreement; 
  
 (k) an opinion of counsel for the Selling Persons listed on Schedule
3.2(k) in a form agreed to by Buyer and Sellers’ Representative; and 
  
 (l) a certificate executed by Management Sellers certifying, to the Knowledge of Management Sellers, the Pro Rata Share of each Selling Person. 
  
 3.3 Deliveries of Buyer. At the Closing, Buyer shall deliver or cause to be delivered to Sellers’ Representative
the following: 
  
 (a) the Purchase Price in the manner set forth
in Section 3.5 below; 
  
 (b) a certificate of Buyer,
dated as of the Closing Date, certifying that all conditions specified in Sections 6.2(a) and 6.2(c) have been fulfilled and that all conditions specified in Section 6.1 (other than Sections 6.1(a) and 6.1(c)) have been
fulfilled or that the satisfaction of any of such conditions has been waived; 

 (c) a certificate of the Secretary or an Assistant Secretary of Buyer, dated as of the Closing Date:
(i) certifying the signatures and authority of the persons/entities executing this Agreement and all agreements and documents contemplated hereby on behalf of Buyer; and (ii) attaching to such certificate true, correct and complete copies
of: (A) the certificate of incorporation of Buyer; (B) the bylaws of Buyer; and (C) the resolutions of Buyer which authorize the execution, delivery and performance by Buyer of this Agreement and the execution, delivery and
performance of all agreements, documents and transactions contemplated hereby and the consummation of all transactions and other commitments and obligations contemplated by this Agreement; 
  
 (d) reserved; 
  
 (e) the Escrow Agreement executed by Buyer; and 
  
 (f) an opinion of counsel for Buyer (which may be in-house counsel) in a form agreed to by Sellers’ Representative and
Buyer. 
  
 3.4 Tax Matters. 
  
 (a) Buyer shall pay all transfer, real property transfer, documentary stamp
and other similar taxes and all recording, filing and other fees and costs with respect to the sale and purchase of the Ownership Interests, if any. 
  
 (b) In order to provide a source of funds to rectify any over payments or underpayments of distributions of available cash by Keys pursuant to
Section 4.4 of the Operating Agreement (as defined in Section 9.17), as amended, the Selling Persons shall cause Two Million Dollars ($2,000,000) of the Purchase Price (the “Tax Amount”) to be held in escrow and
disbursed by U.S. Bank National Association, a national banking association (“Tax Agent”), in accordance with the terms and conditions of an escrow agreement to be executed by Selling Persons and Tax Agent. 
  
 3.5 Payment of the Purchase Price. 
  
 (a) In order to assist the Selling Persons, and at their request, and
subject to fulfillment of all of Buyer’s conditions to Closing hereunder, Buyer agrees to pay the Purchase Price at Closing by delivering the following amounts in immediately available funds to Waller Lansden Dortch & Davis, PLLC
(“Waller Lansden”) for prompt subsequent distribution to the following persons: 
  
 (i) to the Escrow Agent an amount equal to the Escrow Amount plus 50% of the amount of any fees due to the Escrow Agent as of the Closing; 
  
 (ii) to the persons whose names are set forth in Schedule 2.5, an aggregate amount equal to $2,854,660, which amount
shall be allocated among such persons in accordance with the instructions of Keys Group; 
  
 (iii) reserved; 
  
 (iv) to the
persons whose names are set forth in Schedule 3.5.(a)(iv), the amounts determined in accordance with the payoff letters attached to such Schedule, said Schedule to be provided to Buyer and Waller Lansden no later than two (2) business
days prior to the Closing; 
  
 (v) reserved; 

 (vi) to the Tax Agent an amount equal to the Tax Amount plus the initial fee due to the Tax Agent as of
the Closing; 
  
 (vii) to the Sellers’ Representative an
amount equal to $1,250,000 (the “Sellers’ Representative Reserve”); 
  
 (viii) to CIT Capital Securities LLC, an amount equal to $300,000; 
  
 (ix) to Waller Lansden, an amount equal to its fees and expenses as approved by the Sellers’ Representative or the Keys Group prior to Closing; and

  
 (x) to each Selling Person its Pro Rata Share of the balance
of the Purchase Price. 
  
 (b) The parties agree that the payment
of the Purchase Price in the manner provided for in this Section is for the convenience of Selling Persons only. In no way shall the making of such payments in the manner set forth in this Section 3.5 relieve, or be interpreted as
relieving, the Selling Persons from their obligations to make the payments which they are obligated to make under this Agreement in the event the payments made under this Section 3.5 shall prove to be insufficient to fulfill Selling
Persons’ obligations hereunder. Neither shall the making of the payments called for in this Section 3.5 in any way obligate Buyer to make payments pursuant to this Section 3.5 which in the aggregate are greater than the
amount of the Purchase Price. 
  
 (c) At the Closing, the
Sellers’ Representative and Buyer shall execute and deliver a closing statement in form and substance satisfactory to them, confirming the amounts to be paid as provided in this Section 3.5. Waller Lansden shall be entitled to rely
on such Closing Statement and Exhibit 3.5 attached hereto and incorporated herein by reference. 
  
 ARTICLE 4 
  
 REPRESENTATIONS AND WARRANTIES 
  
 4.1
Representations and Warranties of Management Sellers. The Sellers listed on Schedule 4.1 (the “Management Sellers”) jointly and severally represent and warrant to Buyer (subject to the limitations and exceptions disclosed in
the correspondingly numbered Schedules to this Agreement) as of the date hereof and as of the Closing (except to the extent such representations and warranties specifically speak only as of one of those dates or as of another date, in which case as
of such date) as follows: 
  
 (a) Organization. Each member
of the Keys Group is a limited liability company or corporation duly organized, validly existing and in good standing under the laws of its state of organization or incorporation and has the requisite limited liability company or corporate power and
authority to own its properties and carry on its business as it is now being conducted. Each member of the Keys Group is qualified to do business in all jurisdictions in which property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary and where the failure to so qualify would have a material adverse effect on it. Schedule 4.1(a) sets forth a true and complete list of: (i) all jurisdictions where each member of the
Keys Group is incorporated or organized; (ii) all jurisdictions where each member of the Keys Group is qualified or licensed to do business as a foreign corporation or limited liability company; (iii) all of the officers and directors of
each member of the Keys Group; and (iv) all powers of attorney granted by any member of the Keys Group to any third party that are currently in effect. Attached to Schedule 4.1(a) are copies of each member of the Keys Group’s:
(i) articles of incorporation or certificate of organization; and (ii) bylaws or operating agreements. 

 (b) Power; Authority; Absence of Conflicts. Each Selling Person has the requisite power and
authority to enter into this Agreement and the documents and agreements contemplated herein to be executed by it (collectively, the “Transaction Documents”) and to consummate the transactions contemplated herein and therein. The execution
and delivery of this Agreement and the Transaction Documents by each such party, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action on the part of each Selling Person. This
Agreement and the Transaction Documents have been duly executed and delivered by each Selling Person that is a party thereto and, assuming due execution and delivery by Buyer, this Agreement and each of the Transaction Documents to which each
Selling Person is a party constitutes a valid and binding obligation of each such Selling Person, enforceable against each such party in accordance with their respective terms, and subject, as to enforceability, to: (i) bankruptcy, insolvency,
fraudulent transfer, moratorium, reorganization and other similar laws affecting creditors’ rights generally; and (ii) general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or equity). Neither the execution and delivery of this Agreement or the Transaction Documents by each Selling Person nor the consummation of the transactions contemplated hereby or thereby
constitutes a violation of any provision of the certificate of incorporation or certificate of organization, or bylaws or operating agreement of any Selling Person or any member of the Keys Group or violates, or except as set forth on Schedule
4.1(b), is in conflict with, or constitutes a default under any agreement or commitment which is set forth on Schedule 4.1(b), or to which any Selling Person is a party or by which any Selling Person is bound, or violates any statute or
law or any judgment, decree, order, regulation or rule of any court or governmental authority, which violation would result in a material adverse effect on the Keys Group. 
  
 (c) Capitalization. As of the date hereof, the total number of authorized Ownership Interests in Keys is 45,000,000,
of which 10,000,000 are designated as Preferred Shares and 35,000,000 are designated as Common Shares. As of the date hereof, all of the outstanding Ownership Interests are owned of record and beneficially by Sellers in the respective amounts set
forth on Schedule 2.1 hereof. All of the Ownership Interests have been duly authorized and validly issued, are fully paid and nonassessable, and have been issued (and since issuance, have not been transferred except in accordance with) in all
material respects in compliance with all applicable federal and state securities laws and with all of the agreements and instruments relating to the Ownership Interests. Except as set forth on Schedule 4.1(c), no Seller nor any member of the
Keys Group is a party to any voting trust, proxy, or other agreements imposing obligations with respect to the voting of or restrictions on transfer of the Ownership Interests. Other than as set forth on Schedule 4.1(c), there does not exist,
with respect to any member of the Keys Group, any outstanding right or security granted or issued by Keys Group to any person or entity (including, any warrant, option, convertible debt obligation, subscriptions, right of first offer or first
refusal, or any other similar right, security, instrument or agreement). No person or entity other than Keys has any ownership interest in Keystone or Childrens. No person or entity other than Keys and Childrens has any ownership interest in KCP. No
person or entity other than the Keys Subs has any ownership interest in any of the Keys Companies. Except as set forth on Schedule 4.1(c), each Selling Person owns his/her/its Ownership Interests free and clear of all Liens. 
  
 (d) Ownership of Other Entities. Other than the Keys Subs, Keys does
not own of record or beneficially any equity ownership interest in any other business entity. Other than the Keys Companies, the Keys Subs do not own of record or beneficially any equity ownership interest in any other business entity. The Keys
Companies do not own of record or beneficially any equity ownership interest in any business entity. 

 (e) Taxes. All tax returns, reports and declarations (collectively, “Tax Returns”)
required by any Authority (as defined below) of any jurisdiction to be filed prior to the date hereof by any member of the Keys Group in connection with the properties, business, income, expenses, net worth and corporate or limited liability company
status of each member of the Keys Group have been filed, and the Tax Returns which have been filed are accurate and complete in all material respects. All Tax Returns required by any Authority of any jurisdiction to be filed following the date
hereof and prior to the Closing Date by any member of the Keys Group in connection with the properties, business, income, expenses, net worth and corporate or limited liability company status of each member of the Keys Group will be timely filed or
extended with the consent of Buyer, and such Tax Returns will be accurate and complete in all material respects. All taxes and governmental charges, including interest and penalties (individually, a “Tax” and collectively,
“Taxes”) shown to be due pursuant to the Tax Returns filed prior to the date hereof or to be filed prior to the Closing Date, or otherwise due as of the date hereof or prior to the Closing Date in connection with the properties, business,
income, expenses, net worth and corporate or limited liability status of each member of the Keys Group have been paid or will be paid prior to Closing, as the case may be, other than Taxes which are not yet due or which, if due, are not delinquent,
or are being contested in good faith by appropriate proceedings and are listed on Schedule 4.1(e) hereto, or have not been finally determined and for which adequate reserves have been established on the Interim Balance Sheets (as defined in
Section 4.1(g) below). There are no Tax claims, audits or proceedings pending or, to the Knowledge of Management Sellers (as defined in Section 9.15), threatened in connection with the properties, business, income, expenses,
net worth or corporate or limited liability company status of the Keys Group. Except as set forth on Schedule 4.1(e) hereto, there are not currently in force any extensions of time with respect to the date on which any Tax Return is or was
due to be filed by any member of the Keys Group, or any waivers or agreements binding upon any member of the Keys Group for the extension of time for the assessment or payment of any Tax. For purposes of this Agreement, “Authority” shall
mean any applicable federal, state, municipal or local government or any agency, department, division or other subdivision of any such government or any federal, state, municipal or local court (collectively, the “Authorities”).

  
 (f) Books and Records. The books and records of the
Keys Group with respect to the Facilities, the Keys Group and the Ownership Interests have been maintained in accordance with reasonable business practices, and to the extent applicable, accurately reflect in all material respects the business of
the Keys Group. 
  
 (g) Financial Statements. The Keys
Group has furnished to Buyer: (i) the consolidated audited balance sheet of the Keys Group for the years ending December 31, 2002, December 31, 2003 and December 31, 2004 and related statements of income and operations for
the year then ended (the “Year-End Balance Sheets”); and (ii) the consolidated unaudited balance sheets of the Keys Group as of May 31, 2005 and related statements of income and operations for the five (5) months then ended
(the “Interim Balance Sheets”), copies of which are attached hereto as Schedule 4.1(g)(i) (collectively, the Year-End Balance Sheets and the Interim Balance Sheets are the “Financial Statements”). The Financial Statements
were prepared based upon the books and records of the Keys Group. Except as otherwise set forth on Schedule 4.1(g)(ii), the Financial Statements have been prepared in conformity with GAAP as applied by Keys Group on a basis consistent with
prior years and fairly present in all material respects the financial condition of the Keys Group, as of the dates indicated, and the results of its operations for the periods indicated, except as otherwise stated therein and in the case of the
Interim Balance Sheets, except for normal year-end adjustments (the effect of which will not, individually or in the aggregate, be materially adverse), the absence of notes and the lack of physical 

 inventory. Other than as set forth on Schedule 4.1(g)(ii), the Keys Group does not have any liabilities or
obligations of any nature (whether known or unknown and whether absolute, accrued, contingent or otherwise) that are of a type required to be disclosed or reflected in financial statements prepared in accordance with GAAP except (i) liabilities
or obligations reflected or reserved against in the Financial Statements and (ii) liabilities incurred in the ordinary course of business since the date of the Interim Balance Sheets that are not individually or in the aggregate material to the
Keys Group. Other than as set forth on Schedule 4.1(g)(iii) hereto, no member of the Keys Group has guaranteed the indebtedness or obligations of any person or entity (other than a member of the Keys Group), or has the right to appoint any of
the directors or officers of any entity (other than a member of the Keys Group). 
  
 (h) Assets. Except as disclosed on Schedule 4.1(h), each member of the Keys Group has good and marketable title to, or a leasehold interest in, all of the assets owned or leased by it, and at the Closing
all of the assets of each member of the Keys Group will be free and clear of Liens (other than those Permitted Encumbrances as defined in Section 4.1(r) below). The assets of the Keys Group constitute, in the aggregate, all the
properties and assets necessary for the operation of the Keys Group and the Facilities as currently conducted. Copies of the fixed asset register of each member of the Keys Group have been made available to Buyer. The tangible assets of the Keys
Group, including, without limitation, the buildings, plants, structures and equipment of the Keys Group are in operating condition and repair, and are adequate for the uses to which they are being put. 
  
 (i) Contracts. Schedule 4.1(i) sets forth a list of each
Contract that: (A) provides for aggregate payments by or to the Keys Group in excess of $75,000 per contract year; (B) cannot be terminated without liability by the member of the Keys Group that is a party thereto upon notice of one
hundred twenty (120) days or less; (C) is with any physician, physician group or medical practice; (D) is a managed care or payor Contract; (E) is an employment or severance Contract; (F) is a lease or sublease relating to
any real property utilized by the Facilities; or (G) is otherwise material to the business or operation of any member of the Keys Group (collectively, the “Material Contracts”). For purposes of this Agreement, “Contract”
means any agreement, lease, license of intellectual property, sublicense, promissory note, evidence of indebtedness, or other contract to which any member of the Keys Group is a party or by which assets of any member of the Keys Group are bound.
Other than set forth on Schedule 4.1(i), all Material Contracts are in full force and effect; no member of the Keys Group is in material default under any of the Material Contracts; and no action or claim is pending, nor to the Knowledge of
Management Sellers is threatened, to terminate or declare any member of the Keys Group in default under any of the Material Contracts. 
  
 Except as set forth in Schedule 4.1(i) or as contemplated by Section 5.1, true and complete copies of all Contracts, including all
amendments and modifications thereto, have been made available to Buyer. 
  
 (j) Labor Matters. There are no material actions, suits or proceedings pending or, to the Knowledge of Management Sellers, threatened between any member of the Keys Group and/or any of their employees which
might reasonably be expected to have a material adverse effect on the conduct of the business of the Keys Group nor are there any unresolved labor union grievances or unfair labor practices or labor arbitration proceedings pending or, to the
Knowledge of Management Sellers threatened, relating to any member of the Keys Group. Except as set forth on Schedule 4.1(j), neither Management Sellers nor Keys Group has received written notice of any claim that any member of the Keys Group
has not complied in all material respects with any applicable laws relating to the employment of labor, including any provisions thereof relating to wages, hours, collective bargaining, the payment of social security and similar Taxes, equal
employment opportunity, employment discrimination and employment safety, or that any member of the Keys Group is liable for any arrears of wages for 

 failure to comply with any of the foregoing. Each member of the Keys Group has withheld or collected from its employees
the amount of all Taxes required to be withheld or collected therefrom and has paid the same when due to the proper Authorities. Except as set forth on Schedule 4.1(j), no member of the Keys Group is a party to any collective bargaining
agreement nor, to the Knowledge of Management Sellers, is there pending any union organizational activities or proceedings with respect to any employees of any member of the Keys Group. Other than the Severance Payments, no employee of any member of
the Keys Group is entitled to any payment, severance or other amount from any member of the Keys Group as a result of the consummation of the transactions set forth in this Agreement. 
  
 (k) Proceedings. Except as set forth in Schedule 4.1(k), there are no material actions, suits or proceedings
pending or, to the Knowledge of Management Sellers, threatened against or involving any member of the Keys Group at law or in equity before any Authority. Except as set forth in Schedule 4.1(k), to the Knowledge of Management Sellers, there
are no governmental investigations being conducted of any member of the Keys Group or the Facilities. Except as set forth in Schedule 4.1(k), to the Knowledge of Management Sellers, no reasonable basis for any material action, suit or
proceeding exists. Except as set forth on Schedule 4.1(k), to the Knowledge of Management Sellers, there are no orders, judgments, injunctions or decrees of any court or governmental agency with respect to which any member of the Keys Group
has been named or to which any member of the Keys Group is a party and pursuant to which any such member of the Keys Group has a continuing obligation. Except as set forth on Schedule 4.1(k), the conduct of the business of each member of the
Keys Group does not violate or infringe any applicable domestic laws, statutes, rules or regulations or any ordinances (other than laws and regulations applicable to the healthcare industry which are addressed in Sections 4.1(m), 4.1(v) and
4.1(x)), except where the failure to be in compliance would not result in a material adverse effect on the Keys Group. 
  
 (l) Intellectual Property. With respect to each member of the Keys Group, Schedule 4.1(l) contains a list of: (A) the following that
are material to the business of the Keys Group: all United States patents, trademark and trade name registrations, service mark registrations, copyright registrations, unexpired as of the date hereof, all United States and foreign applications
pending on the date hereof for patents, for trademark or trade name registrations, for service mark registrations, or for copyright registrations, and all trademarks, trade names, service marks, labels and other trade rights in use on the date
hereof, all of the foregoing being owned in whole or in part as noted thereon on the date hereof by any member of the Keys Group; and (B) a description of material actions known by Management Sellers to have been taken within the three
(3) year period preceding the date of this Agreement to protect the trade names used by any member of the Keys Group. To the Knowledge of Management Sellers, each of the patents, trademarks, trade names and copyright registrations and/or
applications therefor set forth on Schedule 4.1(l) are in good standing and are enforceable. Other than as reflected in the Material Contracts, no member of the Keys Group is a licensor with respect to any patents, trademarks, trade names,
copyrights or registrations or applications therefore that are material to the operation of the business of the Keys Group. To the Knowledge of Management Sellers, the conduct of the business of each member of the Keys Group does not violate or
infringe in any material respect any right or patent, trademark, tradename, service mark, copyright, know-how or other proprietary right of third parties. 
  
 (m) Permits. Schedule 4.1(m) hereto is a schedule of all material Permits (as defined below) held by any member of the Keys Group as of the
date hereof in connection with the business of such member of the Keys Group or the Facilities. For purposes of this Agreement, the term “Permits” shall mean all permits, provider numbers, accreditations, certificates, licenses,
certificates of need, franchises and authorizations and all consents, approvals, notices, filings, recordings, registrations, qualifications and similar rights (and all applications therefor) currently necessary to enable such member of the Keys
Group to operate its respective business, including operation of the Facilities, as 

 presently conducted or to receive payment from governmental payors obtained by any member of the Keys Group from any
Authority. The Keys Group is, and for the three (3) year period preceding the date of this Agreement has been, operated in all material respects in compliance with all such material Permits. All material Permits are in full force and effect,
and no action or claim is pending, nor to the Knowledge of Management Sellers is threatened, to revoke, terminate or declare invalid any of the material Permits. 
  
 (n) Insurance. With respect to insurance matters: 
  
 (i) Management Sellers have made available to Buyer: (A) copies of all policies of insurance to which any member of
the Keys Group is a party or under which any member of the Keys Group, or any director or officer of any member of the Keys Group, is or has been covered in connection with the business or operation of the Keys Group at any time within the two
(2) years preceding the date of this Agreement; and (B) true and complete copies of all pending applications for policies of insurance. 
  
 (ii) Schedule 4.1(n) sets forth: (A) any self-insurance arrangement by or affecting any member of the Keys Group, including any reserves
established thereunder; (B) any contract or arrangement, other than a policy of insurance, for the transfer or sharing of any material insurable risk by any member of the Keys Group; and (C) for each of the last two (2) years a
summary of the loss experience for each insurance policy presently in effect. 
  
 (iii) Except as set forth on Schedule 4.1(n)(iii), all insurance policies to which any member of the Keys Group is a party or that provide coverage to any member of the Keys Group: (A) are valid,
outstanding and enforceable in accordance with their terms against the applicable member of the Keys Group and, to the Knowledge of Management Sellers, against the other parties thereto; (B) are sufficient for complying in all material respects
with all legal requirements and all requirements of the Material Contracts; (C) will continue in full force and effect immediately following the Closing; and (D) do not provide for any retrospective premium adjustment or other
experience-based liability on the part of any member of the Keys Group. 
  
 (iv) Except as set forth on Schedule 4.1(n)(iv), to the Knowledge of Management Sellers, no member of the Keys Group has received: (A) any written notice that a defense will be afforded by the applicable
insurance company with reservation of rights with respect to any material claim (or notice of a material claim) filed by or on behalf of the Keys Group; or (B) any written notice of cancellation or any other indication that any insurance policy
is no longer in full force or effect or will not be renewed or that the insurer of any policy is not willing or able to perform its obligations thereunder. 
  
 (v) Reserved. 
  
 (vi) Reserved. 
  
 (o) Employee Matters. 
  
 (i) Attached hereto is a complete list (Schedule 4.1(o)(i)) of all “employee welfare benefit plans” and “employee pension benefit
plans” (collectively, “Qualified Plans”), as such terms are defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and any other group employee benefit plan, agreement, arrangement or
understanding, whether or not subject to ERISA including any funding vehicle therefore now in effect, whether formal or informal, written or 

 oral, covering or maintained for the benefit of any employee or former employee or other personnel engaged in the
operations of the Keys Group or under which the Keys Group (including any trade or business under common control therewith, within the meaning of Section 414 of the Code) has or has had any liability (the Qualified Plans, together with such
other plans, arrangements and understandings, collectively, the “Employee Benefit Plans”). As of the Closing Date, there are no binding agreements that would require the Keys Group or its successors to establish any new Employee Benefit
Plans as a result of the transactions contemplated by this Agreement. 
  
 (ii) With respect to each Employee Benefit Plan, Keys has provided or made available to Buyer a copy thereof and, to the extent applicable: (A) any related trust agreement or other funding instrument; (B) the most recent
determination letter received from the Internal Revenue Service; (C) any summary plan description and other written communication to employees concerning the benefits provided thereunder; (D) the Annual Report (Form 5500-series), including
all schedules and attachments thereto, required to be filed for the three most recent plan years; and (E) the most recently prepared actuarial valuation report. 
  
 (iii) Except as specified in Schedule 4.1(o)(iii), neither any member of the Keys Group nor any other members of the
Controlled Group of Corporations (as defined in Section 1563 of the Code) that includes each member of the Keys Group contributes to, ever has contributed to, or ever has been required to contribute to any Benefit Plan that is or was subject to
Title IV of ERISA or any Multiemployer Plan (as defined in Section 3(37) of ERISA) and none of them has any liability (including withdrawal liability) under any Employee Benefit Plan that is or was subject to Title IV of ERISA or any
Multiemployer Plan. 
  
 (iv) With respect to the Employee Benefit
Plans, no member of the Keys Group has taken any action, or omitted to take any action, that would or could reasonably be expected to result in, and no event has occurred that would subject the Keys Group or Buyer to, any material Lien, fine, tax,
penalty, or other liability imposed by ERISA, the Code, or other applicable law on any member of the Keys Group. 
  
 (v) All of the Employee Benefit Plans that are intended to be tax-qualified under Section 401(a) of the Code are so qualified and maintained
pursuant to a prototype plan that has been approved by the Internal Revenue Service.. 
  
 (vi) No reportable event (within the meaning of Section 4043 of ERISA) has occurred or, as a direct result of the transaction contemplated by the Agreement will occur, with respect to any Employee Benefit Plan.
There has not occurred with respect to any Employee Benefit Plan: (A) a prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) for which no statutory or administrative exemption is applicable
that could have a material adverse effect on the Keys Group; or (B) an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived. 
  
 (vii) All of the Employee Benefit Plans have been established and operated
in material compliance with their respective terms and all applicable laws, rules and regulations, and all contributions and PBGC premiums from any member of the Keys Group required to be made to or on behalf of any such Employee Benefit Plan have
been made or are not yet due. 
  
 (viii) None of the Employee
Benefit Plans provides medical benefits (including retiree welfare benefits) to persons who are not employees of any member of the Keys Group or their dependents, except as required by Section 4980B of the Code and Sections 601-608 of ERISA and
other applicable laws. 

 (ix) Except as set forth on Schedule 4.1(o)(ix), no member of the Keys Group maintains any
Employee Benefit Plan under which it would be obligated to pay, accrue or accelerate rights to any money or other property or benefits because of the consummation of the transactions contemplated by this Agreement. Except as specified in Schedule
4.1(o)(ix), there are no other Contracts or arrangements covering any employee, former employee or other personnel of any member of the Keys Group that could give rise to the payment of any amount that would be non-deductible due to
Section 280G of the Code. 
  
 (x) Except as specified in
Schedule 4.1(o)(x), with respect to each Employee Benefit Plan: (A) no actions, suits, or claims (other than routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Management Sellers, threatened; and
(B) no voluntary correction filings with respect to the Employee Benefit Plans and no administrative proceedings, audits, or investigations by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation,
or any other Authority are pending or, to the Knowledge of the Management Sellers, anticipated or threatened. 
  
 (p) Facility Matters. With respect to the Facilities: 
  
 (i) As of September 30, 2005 (“OIG Check Date”), none of the professional licensed staff of any Facility was listed on the Office of
Inspector General List of Excluded Individuals/Entities, and, to the Knowledge of Management Sellers, no such person has been excluded from federal healthcare program participation between the OIG Check Date and the date hereof; 
  
 (ii) Schedule 4.1(p)(ii) hereto sets forth each of the Facilities
that are certified for participation in Medicare and Medical Assistance (“Medicaid”) programs, and each has a current and valid provider contract with such programs; 
  
 (iii) Schedule 4.1(p)(iii) sets forth opposite each Facilities’ name, all third-party payor programs in which
such Facility participates and whether a Contract is in effect as of the date hereof with such third-party payors; and 
  
 (iv) copies of the most recent written licensure survey reports and any and all written educational, group home, Medicare, Medicaid and JCAHO or other
accreditation survey reports received by any member of the Keys Group with respect to the Facilities for which surveys were conducted by the appropriate state or federal agencies having jurisdiction thereof or JCAHO or other accreditation bodies
have been made available to Buyer, along with copies of the applicable plans of correction which the agencies required to be submitted in response to such survey reports. 
  
 (q) Real Property. Except as set forth on Schedule 4.1(q): 
  
 (i) Each member of the Keys Group owns fee simple title to, or a valid
leasehold interest in, the tracts of Real Property (as defined below) set forth on Schedule 4.1(q) opposite such entity’s name. For purposes of this Agreement, all real property owned by any member of the Keys Group in fee simple or
leased by any member of the Keys Group together with all improvements, buildings and fixtures located thereon or therein, and all construction in progress with respect to such owned real property, shall sometimes be collectively referred to as, the
“Owned Real Property,” and with respect to such leased real property, shall sometime be referred to collectively, as the “Leasehold Real Property.” The Owned Real Property and the Leasehold Real Property shall sometimes be
referred to collectively as the “Real Property;” 

 (ii) other than the real property located on Magnolia Avenue in Riverside, California, the Real Property
comprises all of the Owned Real Property and the Leased Real Property that is material to the operations of the businesses conducted by the Keys Group or the Facilities; 
  
 (iii) all essential utilities (including water, sewer, electricity and telephone service) are available to the Facilities;

  
 (iv) the Facilities are in all material respects in
compliance with all applicable planning, zoning and building codes and ordinances; 
  
 (v) no Management Seller has received and, to the Knowledge of Management Sellers, no member of the Keys Group has received (A) written notice of a violation of any ordinance or other law, order, regulation or
requirement relating to or affecting all or any part of the Real Property which violation would result in a material adverse effect on the business of the Keys Group; or (B) written notice of condemnation or similar proceedings relating to any
part of the Real Property; 
  
 (vi) the Real Property will be
subject only to the Permitted Encumbrances as of the Closing Date; 
  
 (vii) except for parties claiming by, through or under the owners of the Leasehold Real Property, the Keys Group, patients, and residents of the Facilities and those tenants or subtenants in possession of the Real Property under Material
Contracts, there are no parties in possession of, or claiming any possession, adverse or not, to or other interest in, any portion of the Real Property as lessees, tenants or subtenants at sufferance, trespassers or otherwise; 
  
 (viii) no tenant or subtenant of a member of the Keys Group with respect to
any portion of the Real Property is entitled to any rebate, concession or free rent, other than as set forth in the Contract with such tenant or subtenant; and no rents due under any of the aforementioned tenant or subtenant Contracts with respect
to the Real Property have been assigned or hypothecated to, or encumbered by, any person, other than pursuant to the encumbrances relating to indebtedness to be satisfied at Closing, or Permitted Encumbrances; 
  
 (ix) except as set forth on Schedule 4.1(q), there is no material
construction or other capital improvement projects currently in process at any of the Facilities or for which a Contract has been executed. 
  
 (r) Permitted Encumbrances. For purposes of this Agreement, “Permitted Encumbrances” shall mean: 
  
 (i) any Lien for Taxes: (A) not yet delinquent or (B) being
contested in good faith by appropriate proceedings; 
  
 (ii) all
easements, covenants, conditions, assignments, defects, restrictions, exceptions, reservations and other encumbrances whether recorded or unrecorded which do not unreasonably and materially interfere with the use or operation of the Facilities by
the Keys Group as the same are currently being used; 

 (iii) all mechanics’, materialmen’s and other similar Liens, levies and charges against the
Real Property, whether existing now or at the time of Closing, which are the obligation of any of the tenants, subtenants, licensees or occupants of the Facilities or a portion thereof to discharge; 
  
 (iv) any Liens, exceptions, objections or other matters which are caused or
created by or on behalf of Buyer or anyone acting by, through or under Buyer; 
  
 (v) any state of facts, encroachments, overlaps or title defects consisting of survey exceptions which would be disclosed by an accurate and current survey of the Real Property and which do not unreasonably and
materially interfere with the use or operation of the Real Property by the Keys Group as the same is currently being used and operated; 
  
 (vi) with respect to the Owned Real Property only, the matters reflected on the existing title insurance policies covering the Owned Real Property
(individually, an “Existing Title Insurance Policy”, and collectively, the “Existing Title Insurance Policies”), which policies described on Exhibit 4.1(r) have been made available to Buyer other than those matters set
forth on Schedule 4.1(r)(vi); 
  
 (vii) with respect to
the Leasehold Real Property only, any Lien which is a matter of record or reflected in an applicable lease that is a Material Contract; 
  
 (viii) any Lien created or imposed on any parcel (or portion thereof) of the Real Property subsequent to the date of the Existing Title Insurance Policy
that pertains to such parcel of the Real Property, which Lien does not otherwise fall within the definition of Permitted Encumbrance but which Buyer accepts in writing prior to the Closing Date; 
  
 (ix) any consents from or notices to landlords/lessors or
sublandlords/sublessors with respect to any of the Leased Real Property (other than consents set forth on Schedule 6.1(h); and 
  
 (x) other Liens (other than Liens that are included in the Indebtedness Amount) that are listed on Schedule 4.1(r)(x) which do not materially
interfere with the use or operation of the business of the Keys Group in a manner consistent with the current use thereof by the members of the Keys Group. 
  
 (s) Environmental. As used in this subsection(s), the following terms shall have the following meanings: 
  
 (i) “Hazardous Material” means any hazardous or toxic substance,
waste or material, any pollutant or contaminant or any other similar substance which is defined as such or is regulated under Environmental Laws. 
  
 (ii) “Environmental Laws” means any applicable law, rule, regulation or other legal requirement pertaining to the environment or the health or
safety of the public, including: the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq. (“CERCLA”); Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et
seq. (“RCRA”); the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11011, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq.; the Clean Air Act, 42 U.S.C.
§§ 7401 et seq. (“CAA”); the Clean Water Act, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. 

 §§ 2602 et seq.; the Rivers and Harbors Act of 1899, 33 U.S.C. § 401, et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. § 2701, et seq.; each as amended; any applicable state or local law similar to the foregoing; all applicable regulations issued pursuant to the foregoing; all Permits issued to a member of the Keys Group
pursuant to the foregoing; and any other applicable law, rule, regulation or other legal requirement pertaining to the existence, cleanup and/or remedy of contamination on property, or the emission or release of any Hazardous Material into the
environment, including into sewer systems or within buildings, or the use, generation, transport, treatment, storage, disposal, removal or recovery of Hazardous Materials, or the control of hazardous wastes. 
  
 (iii) Except as otherwise set forth in the Phase I and/or Phase II
environmental surveys to be conducted by Buyer, between June 30, 2003 and the date hereof: 
  
 A. there has been no treatment, storage, release or threatened release of any Hazardous Material at or from the Real Property, except in material
compliance with applicable Environmental Laws; 
  
 B. there have
been no Hazardous Materials (other than those containerized, packaged, used or maintained in material compliance with applicable Environmental Laws) located in or on the Real Property; 
  
 C. there has been no disposal of any Hazardous Materials at the Real Property by Keys Group, except in material compliance
with applicable Environmental Laws; 
  
 D. there has been no
arrangement by any member of the Keys Group for disposal of any Hazardous Material on any property or facility not owned by any member of the Keys Group, except in accordance with Environmental Laws; 
  
 E. the conduct of the business of each member of the Keys Group has been in
material compliance with all Environmental Laws; 
  
 F. to the
Knowledge of Management Sellers, no member of the Keys Group has sent Hazardous Material to a site that, pursuant to any Environmental Law, has been placed on the National Priorities List or any similar state list; and 
  
 G. no underground storage tank has been removed from the Real Property
except in material compliance with applicable Environmental Laws, and to the Knowledge of Management Sellers, no underground storage tanks are currently located on or at the Real Property. 
  
 (t) Conduct of Business. Between May 31, 2005 and the date
hereof, other than as set forth on Schedule 4.1(t), each member of the Keys Group has been operated in the ordinary course of business, and: 
  
 (i) other than circumstances or events affecting the Keys Group and its competitors generally, there has not occurred any change in the business or
financial condition of any member of the Keys Group that has resulted in a material adverse effect on the Keys Group as a whole; 
  
 (ii) there has not been any change in the accounting policies or practices of any member of the Keys Group, including policies or practices with respect
to the payment of accounts payable or the collection of accounts receivable; 

 (iii) no member of the Keys Group has declared or paid any dividend or other distribution on or in
respect of, and no member of the Keys Group has repurchased, any of its ownership interests or any options, warrants or other rights to purchase such ownership interests; 
  
 (iv) no member of the Keys Group has sold, transferred or subjected to any Lien other than in the ordinary course of
business, or committed to sell, transfer or subject to any Lien other than in the ordinary course of business, any tangible or intangible assets having a current book value in excess of $75,000 in the aggregate, except for sales of Inventory (as
defined in Section 4.1(w) below) in the ordinary course of business and except for Permitted Encumbrances; 
  
 (v) no member of the Keys Group has purchased or leased, or committed to purchase or lease, any asset for more than $75,000 in the aggregate, except in
the ordinary course of business; 
  
 (vi) no member of the Keys
Group has incurred any additional indebtedness other than pursuant to debt instruments outstanding at June 30, 2005, guaranteed the indebtedness of any other person, or canceled any debt owed to it or released any claim possessed by it other
than in the ordinary course of business, except for any debts or claims for which adequate reserves have been established in the Financial Statements; 
  
 (vii) no member of the Keys Group has suffered any theft, damage, destruction or loss of or to any tangible asset or assets in excess of $75,000 which
loss has resulted in a material adverse effect on such member of the Keys Group; and 
  
 (viii) no member of the Keys Group has made, granted, or committed to make or grant any bonus or any wage, salary or compensation increase to any director, officer, or employee other than salary increases and bonuses
in the ordinary course of business consistent with past practice, or any material increase in any employee benefit plan or arrangement, nor has any member of the Keys Group amended or terminated any existing Employee Benefit Plans or arrangement
except as required by applicable law or adopted any new Employee Benefit Plans or arrangements. 
  
 (u) Accounts Receivables. The accounts receivable that are reflected on the Interim Balance Sheets and all receivables relating to each member of
the Keys Group arising thereafter and prior to the Closing Date arose and will arise from bona fide transactions in the ordinary course of business of each member of the Keys Group and arose in the usual and ordinary course of business of each
member of the Keys Group from arms-length transactions. Except as set forth in Schedule 4.1(u), and except for compensation to employees for services rendered, no director, officer, or equity owner of any member of the Keys Group is, or
during the last fiscal year: (A) has been a party to any material transaction with any Facility (including, but not limited to, any Contract or other arrangement) providing for the furnishing of service by, or rental of real or personal
property from, or otherwise requiring payments to, any such director, officer, or equity owner, other than in his, her or its capacity as a director, officer, or equity owner and other than intercompany transactions; or (B) has a direct or
indirect ownership interest in any person or entity which is a present competitor, supplier or customer of any of the Facilities nor does any such person receive income from any source which should properly accrue to a member of the Keys Group.

  
 (v) Cost Reports. Any and all cost reports, budgets,
reports, accountings and other filings required to be filed pursuant to any contractual arrangement, law, regulation, rule or court order issued by or relating to the Medicare or Medicaid programs or any other governmental healthcare program, or
relating to any third-party payor Contract due as of or prior to the Closing Date, has been 

 timely filed by each member of the Keys Group. Except as set forth on Schedule 4.1(v), such costs reports,
budgets, accountings and other filings accurately reflect in all material respects the information required to be included thereon and such cost reports do not claim any material amounts in excess of amounts provided by law or applicable agreement.
To the Knowledge of Management Sellers, except as set forth on Schedule 4.1(v) and for overpayments, off-sets and recoupments occurring in the ordinary course of business, there are no existing material overpayments due and owing with respect
to any cost report period ending prior to the date hereof to any Authority including, without limitation, the Center for Medicare and Medicaid Services, or to any third-party payor from any member of the Keys Group. 
  
 (w) Inventory. Substantially all inventories of office supplies,
clinical supplies and other supplies of each member of the Keys Group (collectively, “Inventory”), consist of a quality and quantity useable in the ordinary course of business of the applicable Facility, except to the extent of the
reserves reflected in the Aggregate Net Working Capital as of the Closing. The present quantity of Inventory is consistent with the past Inventory practices of the members of the Keys Group. 
  
 (x) No Operational Violations. No member of the Keys Group nor any of
their respective officers and directors in their capacities as such, nor, to the Knowledge of Management Sellers, any employee or agent of any member of the Keys Group have: (i) knowingly and willfully made or caused to be made a false
statement or representation of a material fact in any application for any benefit or payment; (ii) knowingly and willfully made or caused to be made any false statement or representation of a material fact for use in determining rights to any
benefit or payment; (iii) presented or caused to be presented a claim for reimbursement under Medicare, Medicaid, or other healthcare programs that is for an item of service that is known or should be known to be: (A) not provided as
claimed; or (B) false or fraudulent; (iv) failed to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf on or behalf of another, with intent
to fraudulently secure such benefit or payment; (v) knowingly and willfully offered, paid, solicited, or received any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind:
(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part by Medicare, Medicaid or other healthcare programs: or (B) in
return for purchasing, leasing, or ordering or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part by Medicare, Medicaid or other healthcare programs;
(vi) knowingly and willfully made a payment, directly or indirectly, to a physician as an inducement to reduce or limit necessary services to individuals who are under the direct care of the physician and who are entitled to benefits under
Medicare, Medicaid, or other healthcare programs; (vii) provided to any person information that is known or should be known to be false or misleading that could reasonably be expected to influence the decision when to discharge a patient from a
Facility; (viii) knowingly and willfully made or caused to be made or induced or sought to induce the making of any false statement or representation (or omitted to state a material fact required to be stated therein or necessary to make the
statement contained therein not misleading) of a material fact with respect to: (A) the conditions or operations of a Facility in order that the Facility may qualify for Medicare, Medicaid or other healthcare program certification; or
(B) information required to be provided under Section 1124A of the Social Security Act (42 U.S.C. §1320a-3); or (ix) knowingly and willfully: (A) charged for any Medicaid service, money or other consideration at a rate in
excess of the rates established by the applicable state; or (B) charged, solicited, accepted or received, in addition to amounts paid by Medicaid, any gift money, donation or other consideration (other than a charitable, religious or other
philanthropic contribution from an organization or from a person unrelated to the patient): (1) as a precondition of admitting the patient, or (2) as a requirement for the patient’s continued stay in the Facility. 

 (y) Disclosure. To the Knowledge of the Management Sellers, this Agreement and the information and
Schedules referred to herein, when taken together, do not include any untrue statement of a material fact having a bearing on the transaction in any material manner. 
  
 (z) Brokers. Except for CIT Capital Financial Services, whose fee, if any, shall be payable by the Sellers out of the
Purchase Price on or prior to Closing, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Sellers or any member of the Keys Group who will be entitled to any fee or
commission from Buyer or any other person or entity upon consummation of the transactions contemplated by this Agreement. 
  
 (aa) Foundation. At all times since any member of the Keys Group has provided management and/or consulting services for the Foundation, the
Foundation is and has: (i) to the Knowledge of Management Sellers, been duly organized and validly existing under the laws of the State of California; and (ii) to the Knowledge of Management Sellers, been qualified to do business in all
jurisdictions in which property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary and where the failure to so qualify would have a material adverse effect on it. Each of the contracts
between any member of the Keys Group and the Foundation (“Foundation Contracts”) are listed as Material Contracts on Schedule 4.1(i) and except as set forth on such Schedule, to the Knowledge of the Management Sellers, neither the
Foundation nor a member of the Keys Group is in material default under any of the Foundation Contracts. To the Knowledge of the Management Sellers, the Foundation has not asserted to the Keys Group that the Foundation is entitled to indemnification
or damages from any member of the Keys Group arising out of any of the Foundation Contracts. 
  
 4.2 Representations and Warranties of Buyer. Buyer represents and warrants to Sellers (subject to the limitations and exceptions disclosed in the correspondingly numbered Schedules to this Agreement) as of the
date hereof and as of the Closing (except to the extent such representations and warranties specifically speak only as of one of those dates or as of another date, in which case as of such date) as follows: 
  
 (a) Buyer is a duly organized, validly existing corporation in good standing
under the laws of the State of Delaware and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted. Buyer has qualified in all jurisdictions in which property owned, leased or
operated by it or the nature of the business conducted by it makes such qualification necessary and where the failure to so qualify would have a material adverse effect on it. 
  
 (b) Buyer has the requisite corporate power and authority to enter into this Agreement and the Transaction Documents to
which it is a party and to consummate the transactions contemplated herein and therein. The execution and delivery of this Agreement and the Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby
and thereby, have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement and the Transaction Documents have been duly executed and delivered by Buyer and, assuming due execution and delivery by the applicable
Sellers, constitute a valid and binding obligation of Buyer, enforceable against Buyer in accordance with their respective terms, and subject, as to enforceability, to: (i) bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization
and other similar laws affecting creditors’ rights generally; and (ii) general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or equity). Neither the execution and delivery of this Agreement or the Transaction Documents by Buyer nor the consummation of the transactions contemplated hereby or thereby constitutes a violation of any provision of the
certificate of incorporation or bylaws of Buyer or 

 violates, or is in conflict with, or constitutes a default under any agreement or commitment to which Buyer is party or
by which Buyer is bound, or violates any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority. 
  
 (c) There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Buyer who will be
entitled to any fee or commission from Sellers or any other person or entity upon consummation of the transactions contemplated by this Agreement. 
  
 (d) There are no actions, suits or proceedings pending or, to the Knowledge of Buyer, threatened against Buyer which could reasonably be expected to:
(i) materially impair the ability of Buyer to perform its obligations hereunder or under the other agreements contemplated hereby to be entered into by Buyer; or (ii) delay or prevent the consummation of the transactions contemplated
hereby or thereby. 
  
 (e) Buyer has sufficient financial
resources, and at the Closing Buyer will possess sufficient funds, to permit Buyer to deliver the Purchase Price in accordance with Section 2.2, subject to satisfaction of the conditions precedent to Buyer’s obligations to close the
transactions contemplated by this Agreement. 
  
 (f) At the
Closing, Buyer will be solvent and able to pay its debts as they become due and will not become insolvent or otherwise unable to pay its debts as they become due as a result of the consummation of the transactions contemplated by this Agreement.

  
 (g) Buyer is acquiring the Ownership Interests for its own
account and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”). 
  
 (h) Reserved 
  
 (i) Buyer has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and
risks of purchasing the Ownership Interests and to understand the risks of, and other considerations relating to, its purchase of the Ownership Interests. 
  
 (j) Buyer has been advised by the Keys Group that, as of the Closing Date, (i) the Ownership Interests will not have been registered under the
Securities Act or any state’s securities laws; and (ii) no securities issued by any member of the Keys Group will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the “Exchange Act”). Buyer further understands that the certificates, if any, representing the Ownership Interests will include an appropriate legend to the effect that such securities have not been registered under
the Securities Act or any state’s securities laws and that such securities may not be sold or transferred except in compliance with the Securities Act and applicable state securities laws. 

 ARTICLE 5 
  

COVENANTS PENDING CLOSING 
  
 5.1 Access, Inspections and Audits. 
  
 (a) Between the date of this Agreement and the Closing, subject to the confidentiality restrictions set forth in Section 7.5, Management
Sellers shall and shall cause each member of the Keys Group to permit Buyer and Buyer’s officers, employees, representatives, agents and advisors to have reasonable access during normal business hours, to and to conduct reasonable inspections
of the Facilities, and any or all of the members of the Keys Group and to any and all books and records and other information, data and documentation pertaining to the conduct of the business of each member of the Keys Group or the ownership or
operation of any of the Facilities, and will cause each member of the Keys Group and their respective directors, officers, employees, representatives, agents and advisors to furnish to Buyer and Buyer’s officers, employees, representatives,
agents and advisors such data, information and documentation relevant to the conduct of business of each member of the Keys Group and the ownership, or operation of the Facilities and the Ownership Interests as Buyer may reasonably request. All such
reviews and inspections shall be conducted in accordance with applicable law and in a manner as not to interfere unreasonably with the Keys Group’s business operations. No such access shall take place and no employees or staff of the Keys Group
or any member of the Keys Group shall be contacted by Buyer or its representatives without first coordinating such access or contact with Michael G. Lindley or Al Smith. Notwithstanding the foregoing, Buyer understands that (x) with respect to
documents and information deemed by Management Sellers in good faith to be market sensitive or competitive in nature, (1) Management Sellers will identify such documents and information to Buyer; (2) if requested by Buyer, Management
Sellers will provide such documents and information to Buyer’s outside attorneys and accountants (who will be bound by confidentiality agreements) for their review; and (3) any report by such attorneys and accountants to Buyer with respect
to such documents and information will be in writing and subject to prior review and reasonable approval by Management Sellers to confirm that any market sensitive or competitive information is not made available to Buyer; (y) litigation and
other materials (including internal/external legal audit letters or reviews, patient records and similar patient information, PRO information, National Data Bank reports, peer and quality review information and other physician-specific confidential
information) that are deemed privileged or confidential by Management Sellers and materials which Management Sellers or the members of the Keys Group may not disclose without violating confidentiality agreements with third parties will not be made
available to Buyer; and (z) neither Management Sellers nor any member of the Keys Group shall be obligated to generate or produce information in any prescribed format not customarily produced by any member of the Keys Group. 
  
 (b) In addition to obligations set forth above, commencing as of the date
hereof and continuing through the Closing, by no later than the twentieth (20th) day of each month, Management Sellers shall provide to Buyer copies of the consolidated unaudited balance sheets of the Keys Group and related statements of income
and operations for the prior month. 
  
 5.2 Status of
Operations. From the date hereof until the Closing Date, the Management Sellers shall and shall cause each member of the Keys Group to keep Buyer informed of material operational matters in respect of each member of the Keys Group, the
Facilities and the general status of on-going operations. 
  
 5.3
Operations. From the date hereof until the Closing Date and except as otherwise expressly provided in this Agreement, Management Sellers will cause the Keys Group to: 
  
 (a) carry on its business in substantially the same manner as heretofore and not make any material change in its personnel,
operations, finances, collections of receivables, payment of accounts payable, accounting policies, or real or personal property; 

 (b) maintain the assets of each member of the Keys Group and all parts thereof in their current
condition, ordinary wear and tear excepted; 
  
 (c) use
commercially reasonable efforts to maintain and preserve each member of the Keys Group’s business organizations and operations intact in all material respects; deal with the present employees of each member of the Keys Group in a manner
consistent with its existing personnel policies; maintain each member of the Keys Group’s relationships with Authorities, payors, suppliers and other persons and entities having business relations with it; and cooperate with Buyer by taking
such actions as are reasonably requested by Buyer to facilitate the transition to Buyer of such business organizations, operations, employees and other relations at Closing; and 
  
 (d) subject to Section 5.1, permit and allow reasonable access by Buyer to discuss post-closing employment with
each management employee of the Keys Group. 
  
 5.4 Consents
and Approvals. From the date hereof until the Closing Date, Management Sellers shall cause each member of the Keys Group to: (a) promptly apply for and use its reasonable efforts to obtain prior to Closing all consents, approvals,
authorizations and clearances of those third parties Contract parties listed on Schedule 6.1(h) hereto, and of applicable Authorities required of it to consummate the transactions contemplated hereby; (b) provide such information and
communications to Authorities as Buyer or such Authorities may reasonably request; and (c) prepare any document or other information reasonably required by Buyer or reasonably requested of Selling Persons by any such Authorities, Buyer, or
third parties in order to consummate the transactions contemplated hereby and to permit Buyer to operate the Facilities following the Closing under the Permits and the Contracts set forth on Schedule 6.1(h). 
  
 5.5 Consents and Approvals. From the date hereof until the Closing
Date, Buyer shall: (a) promptly apply for and use its reasonable efforts to obtain prior to Closing all consents, approvals, authorizations and clearances of applicable Authorities and third-parties required of it to consummate the transactions
contemplated hereby, including approval to indirectly own and operate the Facilities following the Closing; (b) provide such information and communications to Authorities as Management Sellers or such Authorities may reasonably request; and
(c) prepare any document or other information reasonably required by Management Sellers or reasonably requested of Buyer by any such Authorities, Management Sellers, or third parties in order to consummate the transactions contemplated hereby
and to permit Buyer to operate the Facilities following the Closing under the Permits and the Contracts set forth on Schedule 6.1(h). 
  
 5.6 Condition of Assets. Subject to the compliance by Management Sellers with the obligations set forth in this Agreement and except as set forth
in this Agreement, Buyer acknowledges that it will take possession and ownership of the assets and properties of the Keys Group as a result of its purchase of the Ownership Interests pursuant to this Agreement AS IS, WHERE IS AND WITH ALL FAULTS.
EXCEPT AS SET FORTH IN THIS AGREEMENT, ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTIES REGARDING HABITABILITY OR FITNESS FOR
HABITATION, ARE EXPRESSLY DISCLAIMED. 
  
 5.7 WARN Act.
Buyer will not take any action that results in the imposition of liability on Selling Persons under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Section 2101 et. seq. (the “WARN Act”) due to a “plant
closing” or “mass layoff” or otherwise under the provisions of the WARN Act, or any similar state or local laws relating to plant closings, with respect to any member of the Keys Group. All quoted terms used in this
Section 5.7 and not defined herein shall have the meanings ascribed to such terms under the WARN Act. 

 5.8 Withholding Taxes. The parties hereby acknowledge that, prior to the Closing, Management
Sellers shall cause Keys to remit to the applicable Authorities an amount equal to the withholding taxes, along with applicable employer payroll taxes for which any member of the Keys Group is responsible prior to Closing, attributable to the
exercise of the options by Option Holders and to the payment of the Severance Amounts. 
  
 5.9 Tax Matters. 
  
 (a)
Management Sellers shall prepare or cause to be prepared and file or cause to be filed (without extension of the due date unless otherwise agreed to by Buyer in writing) all partnership income Tax Returns for each member of the Keys Group that is a
partnership for federal income tax purposes for all taxable periods ending on or before the Closing Date, including, without limitation, a final Internal Revenue Service Form 1065 and all corporation income Tax Returns for each member of the Keys
Group that is a corporation for all taxable periods ending on or before the Closing Date. Upon the request of Buyer, Selling Persons agree and the Management Sellers shall cause each of Keys, Keystone, KCP and their respective wholly owned limited
liability companies to prepare and file an election under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”) with respect to their respective partnership income Tax Returns for the period immediately prior to,
or the period including the Closing Date. 
  
 (b) Management
Sellers shall cause each member of the Keys Group to prepare and file all other Tax Returns required to be filed by such member on or before the Closing Date (other than those Tax Returns which due date has been properly extended until after the
Closing Date) and cause such member of the Keys Group to pay all Taxes due with respect to those Tax Returns. From the date hereof through the Closing, Management Sellers shall cause each member of the Keys Group to provide a copy of all Tax Returns
to Buyer for review and approval prior to such time as each such Tax Return is filed (which approval shall not be unreasonably withheld). 
  
 (c) Buyer shall cause each member of the Keys Group, or any successor to such member, to prepare and file all Tax Returns (other than those Tax Returns
required to be filed by Management Sellers pursuant to Section 5.9(a) or (b)) that are required to be filed by each member of the Keys Group and pay, or cause to be paid, all Taxes due with respect to those Tax Returns. 
  
 (d) Selling Persons and Buyer shall cooperate to the extent reasonably
requested in connection with the preparation and filing of Tax Returns with respect to the members of the Keys Group and any audit, litigation, or other proceeding involving Taxes with respect to such members. Cooperation shall include the retention
and, upon the other party’s request, the provision of records and other information reasonably relevant to the preparation of a Tax Return or the conduct of an audit, litigation, or other proceeding. 
  
 (e) For the shorter of (i) five (5) years or (ii) as long as
Brad Williams is an employee of Keys or its subsidiaries or affiliates, Buyer agrees to cause Keys to permit Brad Williams to provide Selling Persons with certain services reasonably requested by Sellers’ Representative, including without
limitation preparing Tax Returns and financial statements; provided that such services shall be at the sole cost and expense of Selling Persons and shall not unreasonably interfere with the business operations of the Keys Group. The Selling Persons
acknowledge and agree that they shall have no claim against either Buyer or any member of the Keys Group relating to or arising out of the services provided pursuant to the preceding sentence nor shall Buyer or any member of the Keys Group have any
liability relating to or arising out of the services provided pursuant to the preceding sentence. 

 5.10 Contract Updates. The Management Sellers shall not permit any member of the Keys Group to
amend, modify or enter into any substitute Material Contracts with any third-party payors or lessors or sublessor unless: (i) the economic terms are no less favorable than those in effect on June 30, 2005; and (ii) the non-economic
terms and conditions are not materially different than those in effect on June 30, 2005. 
  
 5.11 Capitalization Update. If any change occurs in the representation and warranty set forth in Section 4.1(c) prior to the Closing Date, Management Sellers shall inform the Buyer in writing on or
prior to the Closing Date, so that such representation and warranty speaks as of the Closing Date and the applicable Selling Persons, if any, shall execute and deliver to Buyer and Sellers’ Representative revised signature pages reflecting the
applicable Selling Person and/or Pro Rata Share. 
  
 ARTICLE 6

  
 CONDITIONS TO CLOSING 
  
 6.1 Of Buyer. All of the obligations of Buyer under Articles 2 and 3
of this Agreement are subject to the fulfillment prior to or at the Closing of each of the following conditions, any of which Buyer may waive in its sole discretion: 
  
 (a) Management Sellers shall have performed and complied in all material respects with all agreements, commitments,
covenants and other obligations required by this Agreement to be performed or complied by Management Sellers prior to or at the Closing in connection with the execution, delivery, and performance of this Agreement and the consummation of all
transactions and other commitments and obligations contemplated by this Agreement, and Buyer shall have received a certificate of Sellers’ Representative dated the Closing Date to such effect; 
  
 (b) Sellers’ Representative shall have delivered to Buyer all of the
deliverables referenced in Section 3.2; 
  
 (c) the
representations and warranties of Management Sellers set forth in this Agreement shall be true and correct in all material respects as of the Closing Date in each case as if made on and as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date, in which case as of such date) except with respect to representations and warranties that contain materiality qualifiers which representations and warranties will be true and correct in all
respects as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such date) and Buyer shall have received a certificate of Sellers’ Representative dated the Closing Date
to such effect; 
  
 (d) all material authorizations, consents,
waivers, approvals, orders, registrations, qualifications, designations, declarations, filings or other actions (collectively “Authorizations”) required with or from any Authority, including without limitation receipt of licenses (or
commitments to issue licenses) and certificate of need approvals for Buyer to indirectly own and operate the Facilities and for Buyer to indirectly conduct the business of each member of the Keys Group as currently conducted, in connection with the
execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, shall have been duly obtained. No such Authorization shall impose on Buyer any condition or provision or requirement with respect to
the Facilities or its operation that is more restrictive in any material respect than or different in any material respect from the conditions imposed upon such operation prior to Closing, unless Buyer gives its prior written approval; 

 (e) the waiting period (and any extension thereof) applicable to the consummation of the transactions
contemplated by this Agreement under the Hart-Scott-Rodino Act (“HSR Act”) shall have expired or been terminated; 
  
 (f) on the Closing Date, no suit, action, investigation, inquiry or other proceeding by any Authority or other person not a party hereto or affiliated
with a party hereto or legal or administrative proceeding shall be pending which questions the validity or legality of the transactions contemplated hereby; and no injunction or order shall be in effect prohibiting consummation of the transactions
contemplated hereby or which would make the consummation of such transactions unlawful; and no action or proceeding shall have been instituted by any Authority or other person not a party hereto or affiliated with a party hereto and remain pending
before any Authority to restrain or prohibit the transactions contemplated by this Agreement. No adverse decision applicable to Keys Group shall have been made by any Authority, and no federal, state or local statute, rule or regulation shall have
been enacted the effect of which would be to prohibit, materially restrict, impair or delay the consummation of the transactions contemplated hereby or materially restrict or impair the ability of Buyer to conduct the business of the Keys Group as
presently conducted; 
  
 (g) except as set forth on Schedule
6.1(g) and except for claims which would reasonably be deemed frivolous or claims that have been resolved, no claim by any person or entity shall have been asserted or threatened in writing that such person or entity: (i) is the holder or
the beneficial owner of, or has any right to acquire or to obtain beneficial ownership of any ownership interest in any member of the Keys Group; (ii) is entitled to all or any portion of the Purchase Price; or (iii) is entitled to acquire
any of the assets or properties that are material to the operations of any member of the Keys Group; 
  
 (h) Buyer shall have received all necessary consents to the Contracts set forth on Schedule 6.1(h)(i) hereto and the applicable member of the Keys
Group shall have entered into new or amended agreements, consistent with the requirements of Section 5.10 above, with the third parties listed on Schedule 6.1(h)(ii) hereto; 
  
 (i) the Keys Group shall have conducted its business in the ordinary course
since May 31, 2005 and no material adverse changes in the operations or financial condition of Keys Group between May 31, 2005 and Closing shall have occurred in the aggregate; 
  
 (j) prior to or simultaneous with the Closing, Selling Persons or the Keys Group shall have caused the Liens on Schedule
6.1(j) to be released in full; 
  
 (k) the Keys Group shall
have in place the insurance policies described in Section 4.1(n) or obtained comparable replacement policies; 
  
 (l) Buyer shall have received an executed copy of the letter attached hereto as Exhibit 6.1(l); and 
  
 (m) Buyer shall have received transition agreements executed by those persons
listed on Schedule 6.1(m). 

 6.2 Of Selling Persons. All of the obligations of Selling Persons under Articles 2 and 3 of this
Agreement are subject to the fulfillment prior to or at the Closing of each of the following conditions, any of which the Sellers’ Representative may waive in its sole discretion: 
  
 (a) Buyer shall have performed and complied in all material respects with all agreements, commitments, covenants and other
obligations required by this Agreement to be performed or complied by Buyer prior to or at the Closing in connection with the execution, delivery, and performance of this Agreement and the consummation of all transactions and other commitments and
obligations contemplated by this Agreement, and Sellers’ Representative shall have received a certificate of Buyer dated the Closing Date to such effect; 
  

(b) Buyer shall have delivered to Sellers’ Representative all of the deliverables referenced in Section 3.3; 
  
 (c) the representations and warranties of Buyer set forth in this Agreement
shall be true and correct in all material respects as of the Closing Date in each case as if made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such date)
except with respect to representations and warranties that contain materiality qualifiers which representations and warranties will be true and correct in all respects as of the Closing Date (except to the extent such representations and warranties
speak as of an earlier date, in which case as of such date) and Sellers’ Representative shall have received a certificate of Buyer dated the Closing Date to such effect; 
  
 (d) the waiting period (and any extension thereof) applicable to the consummation of the transactions contemplated by this
Agreement under the HSR Act shall have expired or been terminated; and 
  
 (e) on the Closing Date, no suit, action, investigation, inquiry or other proceeding by any Authority or other person not a party hereto or affiliated with a party hereto or legal or administrative proceeding shall be pending which
questions the validity or legality of the transactions contemplated hereby; and no injunction or order shall be in effect prohibiting consummation of the transactions contemplated hereby or which would make the consummation of such transactions
unlawful; and no action or proceeding shall have been instituted by any Authority or other person not a party hereto or affiliated with a party hereto and remain pending before any Authority to restrain or prohibit the transactions contemplated by
this Agreement. No adverse decision applicable to Buyer shall have been made by any Authority, and no federal, state or local statute, rule or regulation shall have been enacted the effect of which would be to prohibit, materially restrict, impair
or delay the consummation of the transactions contemplated hereby. 
  
 ARTICLE 7 
  
 OTHER AGREEMENTS OF THE PARTIES

  
 7.1 Commercially Reasonable Efforts/Further
Assurances. Unless otherwise set forth in this Agreement, from the date hereof until the Closing, upon the terms and subject to the conditions of this Agreement, each party shall use all commercially reasonable efforts to take or cause to be
taken all actions and to do or cause to be done all things necessary, proper or advisable under applicable laws to consummate and make effective the transactions contemplated by this Agreement. Upon the reasonable request of another party, each
party agrees to take any and all reasonable actions, including, without limitation, the execution of certificates or instruments, necessary or appropriate to give effect to the terms and conditions set forth in this Agreement or to more fully vest
in Buyer, Selling Persons’ rights, title and interest in and to Ownership Interests. The obligation set forth in the preceding sentence shall survive the Closing. 

 7.2 Publicity. No party shall issue any press release, public statement or announcement or make
any other disclosure relating to this Agreement or the transactions contemplated by this Agreement without the written prior approval of the other parties except to the extent such disclosure is required by applicable law, as determined in good
faith by the party required to make such disclosure; provided, however, in the event that Buyer determines in good faith that it must disclose this Agreement in order to comply with its obligations under the Exchange Act and/or any rule or
regulation promulgated thereunder, Buyer will first deliver a copy of such disclosure to Sellers’ Representative and provided that the Sellers’ Representative provide comments to such disclosure to Buyer in a timely manner, Buyer shall
consider in good faith such comments. Notwithstanding anything to the contrary contained herein, the parties hereto are specifically permitted to disclose the existence of this Agreement and the terms contained herein, to the extent required, to
such Authorities, including without limitation the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) and such third-parties as may be necessary in order to comply with the provisions set forth in
Section 5.4 and Section 5.5 above and Sections 7.9 below. The Sellers’ Representative and Buyer will consult with each other concerning the means by which the Keys Group’s employees, customers, and suppliers and others
will be informed of the transactions contemplated by this Agreement. 
  
 7.3 Expenses. Except as otherwise provided in this Agreement, Selling Persons and Buyer shall each bear their respective expenses incurred in connection with the negotiation, execution, delivery and implementation of this Agreement
or the transactions contemplated by this Agreement, including, without limitation, all accounting, legal, financial advisory and other expenses, whether or not the transactions contemplated by this Agreement are consummated; provided, however, in
the event of a Closing, on or prior to the Closing Date, Selling Persons shall cause Keys to pay all legal, accounting and other expenses incurred by the Selling Persons and each member of the Keys Group in connection with the negotiation,
execution, delivery or implementation of this Agreement through the Closing Date. No member of the Keys Group shall have any obligation to pay any legal, accounting or other expenses incurred by Selling Persons or any member of the Keys Group in
connection with the negotiation, execution, delivery or implementation of this Agreement following the Closing. 
  
 7.4 Relationship of the Parties. The relationship between Selling Persons and Buyer established by this Agreement is solely that of vendor and
vendee and nothing contained herein shall be deemed to create a joint venture or other fiduciary relationship between Selling Persons and Buyer. Neither Selling Persons nor Buyer, nor their respective officers, directors, employees, representatives
or agents, shall be deemed to be an agent or servant of the other parties nor have the right or authority to enter into any contract, agreement, commitment or other obligation in the name of or on behalf of the other parties or otherwise purport to
bind the other parties in any manner. 
  
 7.5
Confidentiality. 
  
 (a) As used in this Agreement, the
following terms shall have the following meanings: 
  
 (i)
“Trade Secrets” of a party means information of such party, including, but not limited to, technical or non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential customers or suppliers, which: (A) derives economic value, actual or potential, from 

 not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; 
  
 (ii) “Confidential Information” of a party means all proprietary and confidential business information and data of such party that does
not constitute a Trade Secret and that is not generally known by or readily ascertainable by or available to, on a legal or authorized basis, the general public. “Confidential Information” as used herein does not include any information:
(A) which is already known to the receiving party (other than information that was obtained subject to restriction under a prior confidentiality agreement); or (B) which before being divulged by the disclosing party (1) has become
generally known to the public through no wrongful act of the receiving party or its representatives, (2) has been received by the receiving party from a third party without (to the receiving party’s knowledge) restriction on disclosure and
without (to the receiving party’s knowledge) a breach by the third party of an obligation of confidentiality, or (3) is independently developed by the receiving party without use of the Confidential Information received from a disclosing
party; and 
  
 (iii) “Evaluation Materials”
means all documents, materials, data and information (whether oral, written or otherwise) relating to this Agreement that are given or disclosed by the parties to each other in the course of pursuing this Agreement, including without limitation
those that contain Confidential Information or Trade Secrets. 
  
 (b) Each party agrees that it, its affiliates and their respective directors, managers, members, partners, officers, employees, representatives, agents and advisors will use the Evaluation Material and any Confidential Information or Trade
Secrets of another party solely for the purpose of evaluating and implementing this Agreement and operating the Keys Group after Closing. In any such use, the receiving party may disclose the Evaluation Materials or any Confidential Information or
Trade Secrets of another party only to such directors, managers, members, partners, officers, employees, agents, representatives and advisors who are involved in the receiving party’s evaluation and implementation of this Agreement, and then
only on a need to know basis. 
  
 (c) Each party agrees that it
will not (and each party shall take full responsibility for ensuring that all of its affiliates and all of their respective officers, managers, members, partners, directors, employees, agents, representatives and advisors do not) in any way
disclose, communicate, transfer or use (other than as allowed by Section 7.5(b)) the Evaluation Material or any Confidential Information or Trade Secrets of another party, without the prior written consent in each instance of such other
party. With respect to Trade Secrets, the covenants in the preceding sentence shall apply for as long as the underlying information or data remains a Trade Secret; with respect to Confidential Information and Evaluation Information, these covenants
shall apply for three (3) years after the date of this Agreement. All Evaluation Material (including tangible copies and computerized or electronic versions thereof), except for that portion which consists of analyses, compilations,
comparisons, studies or other documents prepared by the receiving party, shall remain the property of the disclosing party. The parties agree to cooperate with each other’s reasonable confidentiality procedures as long as any covenant in this
Section remains in force. 
  
 (d) After the Closing, all
Confidential Information, Trade Secrets and Evaluation Materials disclosed by Selling Persons and members of the Keys Group to Buyer hereunder, including, without limitation, all of the same as to the conduct, ownership or operation of each member
of the Keys Group shall automatically become indirectly the property of Buyer and shall thereafter be Confidential Information, Trade Secrets and Evaluation Material of Buyer (and shall be treated at all times thereafter as if Buyer were the
disclosing party thereof rather than the receiving party thereof). 

 (e) Each party agrees that it will promptly return to the disclosing party all Evaluation Material
received from such disclosing party, together with all Confidential Information and Trade Secrets of such disclosing party, within five (5) days following the written request of such disclosing party after any termination of this Agreement
under Section 8.1. The return of the Evaluation Material, Confidential Information and Trade Secrets shall be accomplished by personal delivery or forwarded by reputable couriers properly addressed to the parties as set forth in
Section 9.9. As an alternative, the receiving party may destroy all such Evaluation Material, Confidential Information and Trade Secrets, and certify to such disclosing party that such destruction has been carried out. That portion of
the Evaluation Material which consists of analyses, comparisons, studies or other documents prepared for confidential use by the receiving party shall be held by the receiving party and kept confidential as provided above, or shall be destroyed and
such destruction certified to the disclosing party. 
  
 (f) Each
party agrees that if it becomes subject to a subpoena or other legal requirement to disclose any of the Confidential Information or Trade Secrets of another party or any Evaluation Material, it will provide the other parties with prompt notice so
that the other parties may seek a protective order or other appropriate remedy, as appropriate. If such protective order or other appropriate remedy is denied or otherwise not obtained, the party required to furnish the information shall furnish
only that portion of the Confidential Information, Trade Secrets and/or Evaluation Material which is, in the reasonable opinion of its counsel, legally compelled, and will cooperate with the other parties and their counsel to enable the other
parties to attempt to obtain a protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information, Trade Secrets and/or Evaluation Material to be disclosed. Nothing herein shall prevent any party
from utilizing or disclosing Confidential Information or Trade Secrets in connection with enforcing its rights or fulfilling its obligations under this Agreement. 
  
 7.6 Relief. The parties acknowledge that their failure to comply with the provisions of Section 7.5 will
give rise to damages, which may be impossible to measure accurately, and that injuries sustained from any such breach will be incalculable and irremediable; provided, however, that each Selling Person shall only be liable for damages resulting from
its, his or her own failure to comply with Section 7.5. Management Sellers shall advise each of the Selling Persons of their respective confidentiality requirements hereunder and the liabilities for any breach thereof. Therefore, it is
agreed that any party shall be entitled to, in addition to all other remedies at law, equitable relief, including without limitation an injunction or order of specific performance, in any court of competent jurisdiction, in the event of any breach
by any party of Section 7.5. Should litigation be necessary to enforce any provision hereof, the prevailing party shall be entitled to recover all costs, including reasonable attorneys’ fees, incurred prior to suit or after suit,
and in all court proceedings, including appellate courts. 
  
 7.7
Maintenance and Furnishing of Information. 
  
 (a) Selling
Persons and Buyer agree that, for such period as may be required by applicable law, he, she, it or they shall not destroy, discard or otherwise render unavailable any books, records, documents, data or other information relating principally to the
conduct of the business of each member of the Keys Group or the ownership or operation of the assets and properties of the Keys Group prior to the Closing Date (the “Information”), without first offering the other parties in writing the
opportunity to obtain possession thereof at such other party’s sole expense; provided that Information shall not include information created or received by Selling Persons in their capacity as owners of Ownership Interests, and/or options or
warrants to purchase Ownership Interests. 

 (b) Selling Persons and Buyer agree to maintain easy and ready access and to make available to the other
parties, at reasonable times after reasonable request therefore and at the requesting party’s sole expense, any Information for the purpose of: (i) preparing for, prosecuting or defending any suit, action, litigation or administration,
arbitration or other proceeding or investigation (other than one by or against the non-requesting party) by or against the requesting party; (ii) preparing and filing any Tax Return or election relating to the Facilities or preparing for or
defending any examination of Tax or Tax Return by any Authority; or (iii) any other legitimate purpose. The party requesting such information shall reimburse the party providing such Information for reasonable out-of-pocket costs and expenses
incurred by the party providing such Information. 
  
 (c) The
access to files, books and records contemplated by this Section 7.7 shall be during normal business hours and upon not less than two (2) business days prior written request, shall be subject to such reasonable limitations as the
party having custody or control thereof may impose to preserve the confidentiality of information contained therein or to delete competitively sensitive information, shall not extend to any material subject to a claim of privilege unless expressly
waived by the party entitled to claim the same, and shall be subject to the confidentiality requirements of Section 7.5. 
  
 (d) Buyer shall cause Keys Group to provide Sellers’ Representative, its employees, agents and accountants with such assistance as may be reasonably
requested in the connection with their preparation of the financial statements of the Keys Group for the period ending immediately prior to the Closing. Such assistance shall include (i) permitting agents of Sellers’ Representative, during
normal business hours, to have reasonable access to, and to examine and make copies of, all books and records of the Keys Group which are in the possession of Buyer or its affiliates (including the members of the Keys Group); and (ii) making
available for consultation the financial personnel and agents of the Keys Group, including without limitation accountants. 
  
 7.8 Post Closing Insurance. In order to provide certain insurance coverage with respect to claims made after the Closing Date that arise out of the
operation of Keys, its subsidiaries and affiliates prior to the Closing Date, Buyer agrees to cause Keys, its subsidiaries and affiliates for a period of five years following the Closing to keep in effect the professional liability insurance
coverage listed on Schedule 7.8 hereto or to provide Selling Persons with the benefit of replacement insurance coverage (whether through self insurance or otherwise) that is substantially similar in scope and with the same deductible as that
maintained by the Keys Group as of the date of this Agreement. 
  
 7.9 HSR Notification. On or before August 19, 2005, Selling Persons and Buyer each filed a Pre-Merger Notification and Report Form with the DOJ and the FTC as required by the HSR Act. Selling Persons and Buyer shall cooperate
with each other in connection with all follow-up requests for additional information, including sharing information concerning sales and ownership and such other information as may be needed to complete such notification. The notifications submitted
by or on behalf of Selling Persons and Buyer requested the early termination of the waiting period specified in the HSR Act. The filing fee required under the regulations promulgated pursuant to the HSR Act shall be borne by Buyer; provided that the
Selling Persons shall cause Keys Group to reimburse Buyer for one half of the amount of such filing fee in the event that the Closing does not occur. In the event either Selling Persons or Buyer shall receive a request for additional information or
documentary material from the DOJ or the FTC, Buyer shall be primarily responsible for promptly responding to and complying with such request; provided, however, that Selling Persons shall promptly notify Buyer of any request they may receive and
shall provide Buyer with all information and documentary materials as are necessary to respond to the request. 

 7.10 Nature and Survival of Representations and Warranties; Indemnification. 
  
 (a) Events of Default. A breach in any respect of any representation
or warranty by a party, or a breach as a result of the failure of any of such party to perform any of its respective agreements, covenants and obligations under this Agreement, shall be considered a default hereunder giving rise to the right of
indemnification set forth in Section 7.10(c) or Section 7.10(d) hereof, as the case may be. 
  
 (b) Survival of Representations, Etc. All representations and warranties made by a party in this Agreement or in any Exhibit, Schedule,
certificate, document or instrument delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby, and the remedies of the other party with respect thereto, shall survive the Closing for the following
periods: 
  
 (i) With respect to the representations and
warranties (other than those representations and warranties in the first two sentences of Sections 4.1(a) and 4.2(a) and in Sections 4.1(b), 4.1(c), 4.1(d), 4.1(e), 4.1(j) (but only with respect to Taxes) 4.1(o), 4.1(s), 4.1(x), 4.1(z),
4.2(b) and 4.2(c), and all related Exhibits, Schedules, certificates documents and instruments), any claim arising thereunder must be brought within a period of twenty-two (22) months following the Closing Date. 
  
 (ii) With respect to the representations and warranties contained in
Sections 4.1(e), 4.1(j) (but only with respect to Taxes), 4.1(o), 4.1(s), 4.1(x), 4.1(z) and 4.2(c) and all related Exhibits, Schedules, certificates documents and instruments, any claim arising thereunder must be brought within the period of
the applicable statutes of limitations, including any extension thereof. 
  
 (iii) With respect to the representations and warranties contained in the first two sentences of Sections 4.1(a) and 4.2(a) and in Sections 4.1(b), 4.1(c), 4.1(d), and 4.2(b) and all related Exhibits,
Schedules, certificates documents and instruments, such representations and warranties shall survive the Closing and any claim arising thereunder may be brought at any time. 
  
 (c) Indemnification to Buyer. 
  
 (i) The Selling Persons shall jointly and severally to the extent of the funds (if any) held by the Escrow Agent, and
thereafter, severally, but not jointly, in accordance with and only to the extent of their Pro Rata Share, indemnify and hold Buyer, (and from and after the Closing, each member of the Keys Group) and their respective affiliates, agents and
representatives (each, an “Indemnified Party”), harmless from and against any and all claims, losses, expenses, damages or liabilities (collectively, the “Indemnified Losses”) arising out of or relating to any of the following:
(A) a breach of the representations and warranties of Management Sellers set forth in this Agreement or in any other document, Schedule, instrument or certificate furnished to Buyer by or on behalf of Selling Persons and/or any member of the
Keys Group in connection herewith; (B) any breach, violation or nonperformance of a covenant, agreement or obligation to be performed hereunder on the part of Selling Persons; (C) those matters set forth on Schedule 7.10(c); or
(D) any actions, judgments, costs and expenses (including reasonable attorneys’ fees and all other expenses incurred in investigating, preparing or defending any litigation or proceedings, commenced or threatened) incident to this
Section 7.10(c) or the enforcement of this Section 7.10(c) in the event such costs are incurred in connection with a claim that is subject to indemnification hereunder. 
  
 (ii) All claims for indemnification under Section 7.10(c) shall
be paid first out of the Escrow Amount until exhausted and thereafter shall be paid severally by Selling Persons in accordance with their respective Pro Rata Share until paid in full. 

 (d) Indemnification to Selling Person. Buyer shall indemnify and hold Selling Persons and their
affiliates, agents and representatives (each, an “Indemnified Party”), harmless from and against any and all Indemnified Losses arising out of or relating to any of the following: (i) a breach of the representations and warranties of
Buyer set forth in this Agreement or in any other document, Schedule, instrument or certificate furnished to Selling Persons by or on behalf of Buyer in connection herewith; (ii) any breach, violation or nonperformance of a covenant, agreement
or obligation to be performed hereunder on the part of Buyer; or (iii) any actions, judgments, costs and expenses (including reasonable attorneys’ fees and all other expenses incurred in investigating, preparing or defending any litigation
or proceedings, commenced or threatened) incident to this Section 7.10(d) or the enforcement of this Section 7.10(d) in the event such costs are incurred in connection with a claim that is subject to indemnification
hereunder. 
  
 (e) Other than set forth in this
Section 7.10(e), no claim for indemnification under this Agreement shall be made by Buyer until the aggregate of all claims made by Buyer equals or exceeds Five Hundred Thousand Dollars ($500,000), at which point claims may be made for
losses, damages and liabilities suffered by Buyer in excess of such amount. Other than set forth in this Section 7.10(e), no claim for indemnification under this Agreement shall be made by Selling Persons until the aggregate of all
claims made by Selling Persons equal or exceed Five Hundred Thousand Dollars ($500,000), at which point claims may be made for losses, damages and liabilities suffered by Selling Persons in excess of such amount. The foregoing limitations shall not
be applicable to any claims relating to or arising out of matters set forth in Section 7.10(c)(i)(B) (C) or (D) (relating to Section 7.10(c)(i)(B) or (C)) or in Section 7.10(d)(ii) or
(iii) (relating to Section 7.10(d)(ii)). 
  
 (f) In no event shall the aggregate amount of the liability of Selling Persons (taken together) or the liability of Buyer (in each case including all costs and expenses set forth in Sections 7.10(c) and 7.10(d) above) exceed Forty
Million Dollars ($40,000,000). The foregoing cap on liability shall not be applicable to the following: (i) the Severance Payments; (ii) the obligations of Selling Persons pursuant to Sections 2.10, 2.11, 2.12, 2.13, and 2.14; or
(iii) any matter set forth on Schedule 7.10(c). Notwithstanding the foregoing, in no event shall the aggregate amount of the liability of Selling Persons (taken together), including all costs and expenses set forth in Sections 7.10(c)
and 7.10(d) above, exceed Seventy Million Dollars ($70,000,000). 
  
 (g) The indemnification obligations of the parties set forth in Sections 7.10(c) and 7.10(d) above shall not include any losses, damages or liabilities to the extent that such losses, damages or liabilities are paid to the
indemnified party under insurance coverage policies held by or for the benefit of the indemnified party. To the extent that the indemnified party has such insurance coverage in place, the indemnified party shall use reasonable efforts to collect on
such coverage; provided, however, nothing contained in this Section 7.10(g) shall limit either Buyer’s or Selling Persons’ right to proceed concurrently or otherwise against the other. In the event that either Selling Persons
or Buyer, as the case may be, receive payment for an indemnification claim from the other and also receives payment from any insurance carrier with respect to the facts or circumstances giving rise to the indemnification claim, such party shall
promptly pay over to the other all recoveries received under such insurance policy (after deducting such party’s expenses in pursuing such claim) up to the amount paid on account of such claim by the other party. In the event, however, that any
insurance recovery is paid over to the other party pursuant to this Section 7.10(g), and such recovery is subsequently required to be returned to the insurance carrier, the party who received the payment pursuant to this
Section 7.10(g) from the other party, shall promptly return the amount of such payment in immediately available funds. 
  
 (h) Except to the extent Buyer is liable to a third party, including, without limitation any Authority, for punitive, special, indirect, consequential or
individual damages, including loss of profits, neither Buyer nor Selling Persons be liable to the other for any punitive, special indirect, consequential, or incidental damages, including loss of profits. 

 (i) Except as otherwise provided in this Agreement, from and after the Closing, the exclusive remedy of
each party in connection with this Agreement and the transactions contemplated hereby shall be as provided in this Section 7.10. 
  
 (j) Any indemnification payment made under this Agreement shall be characterized for Tax purposes (and only for Tax purposes) as an adjustment to the
Purchase Price. 
  
 (k) In calculating amounts payable to an
Indemnified Party, the amount of the Indemnified Losses shall be computed net of any Tax benefit realized by the Indemnified Party with respect to such Indemnified Losses. 
  
 (l) Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party with respect to all persons or entities relating to the matter for which indemnification has been made. 
  
 (m) No party shall be entitled to recover Indemnified Losses to the extent that the amount of Indemnified Losses has been increased or extended by the
willful misconduct, violation of law or bad faith of such party. 
  
 (n) In the event that any claims are made with respect to the matters set forth on Schedule 7.10(n), the Selling Persons shall vigorously oppose such claims and shall keep Buyer fully informed with respect thereto. The Selling
Persons shall severally, but not jointly, in accordance with and only to the extent of their Pro Rata Share, indemnify and hold Buyer, (and from and after the Closing, each member of the Keys Group) and their respective affiliates, agents and
representatives harmless from and against any and all Indemnified Losses arising out of or relating to the matters set forth on Schedule 7.10(n). The limitations contained in Sections 7.10(e) and 7.10(f) shall not apply with respect to
the obligations of the Selling Persons pursuant to this Section 7.10(n). Notwithstanding anything to the contrary in this Agreement, the Selling Persons shall not be entitled to utilize any portion of the funds then held by the Escrow
Agent in order to satisfy their respective obligations set forth in this Section 7.10(n), provided, however that Buyer, at its election, may make a claim under the Escrow Agreement and be paid out of the Escrow Amount for amounts
due on account of the Selling Persons obligations herein. 
  
 7.11
Procedure for Indemnification – Non-Third Party Claims. Whenever any claim shall arise for indemnification hereunder and such claim does not involve a demand, claim, action or proceeding made or brought by a third party, including
without limitation an Authority, the Indemnified Party shall notify the indemnifying party promptly after such Indemnified Party has actual knowledge of the facts constituting the basis for such claim. The notice to the indemnifying party shall
specify, if known, the amount or an estimate of the amount of the Indemnified Losses arising therefrom. 
  
 7.12 Procedure for Indemnification – Third Party Claims. 
  
 (a) Promptly after receipt by an Indemnified Party of notice of the commencement of any demand, claim, action or proceeding
made or brought by a third party, including without limitation an Authority (a “Proceeding”), such Indemnified Party will, if a claim is to be made against an indemnifying party pursuant to this Article VII, give written notice (the
“Claims Notice”) to the indemnifying party of the commencement of the Proceeding, but the failure to notify the indemnifying 

 party will not relieve the indemnifying party of any liability that it may have to the Indemnified Party, except to the
extent that the indemnifying party demonstrates that the defense of such action is prejudiced by the indemnified party’s failure to give such notice. The Claims Notice shall describe the Proceeding in reasonable detail and shall specify, if
known, the amount or an estimate of the amount of the Indemnified Losses arising therefrom. 
  
 (b) If any Proceeding referred to in Section 7.12(a) is brought against an Indemnified Party and such Indemnified Party gives notice to the indemnifying party of the commencement of such Proceeding, the
indemnifying party will be entitled to participate in such Proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to such Proceeding and the Indemnified Party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurances to the Indemnified Party of its financial capacity to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the Indemnified Party and, after notice from the indemnifying party to the Indemnified Party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be liable to the Indemnified Party under this Article VII for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each
case subsequently incurred by the Indemnified Party in connection with the defense of such Proceeding, other than reasonable costs of investigation. If the indemnifying party assumes the defense of a proceeding, (y) it will be conclusively
established for purposes of this Agreement that the claims made in the Proceeding are within the scope of and subject to indemnification in accordance with this Article VII and (z) no compromise or settlement of such claims may be effected by
the indemnifying party without the Indemnified Party’s consent unless (I) there is no finding or admission of any violation of legal requirements or any violation of the rights of any person and no effect on any other claims that may be
made against the Indemnified Party; and (II) the sole relief provided is monetary damages that are to be paid in full by the indemnifying party; and (III) the Indemnified Party will have no liability with respect to any compromise or settlement of
such claims effected without its consent. If notice is given to an indemnifying party of the commencement of any Proceeding and the indemnifying party does not, within ten days after the Indemnified Party’s notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the indemnifying party will be bound by any determination made in such Proceeding or any compromise or settlement effected by the Indemnified Party. 
  
 (c) Notwithstanding the foregoing, if an Indemnified Party determines in good
faith that there is a reasonable probability that a Proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnified Party may, by
notice to the indemnifying party, assume the exclusive right to defend, compromise or settle such Proceeding, but the indemnifying party will not be bound by any determination of a Proceeding so defended or any compromise or settlement effected
without its consent (which may not be unreasonably withheld.) If the indemnifying party does not assume the defense of any claim or litigation, any Indemnified Party may defend against such claim or litigation in such manner as it may deem
appropriate, including, but not limited to, settling such claim or litigation, after giving notice of the same to the indemnifying party, on such terms as the Indemnified Party may deem appropriate. The indemnifying party will promptly reimburse the
Indemnified Party in accordance with the provisions hereof. 
  
 7.13 Non-Competition. 
  
 (a) As an inducement
for Buyer to enter into this Agreement and to consummate the transactions set forth herein, each of Lindley, Smith and Cawood hereby agree, consent to and 

 
acknowledge, that for a period of three (3) years from the Closing Date, in every state where any member of the Keys Group was doing business
immediately prior to the Closing, neither Lindley, Smith, Cawood nor any of their respective affiliates shall directly or indirectly own, build, invest in, participate in the development of, finance, control or have any other management or
consulting role in any entity, facility or operation, whose services or activities compete in any way, in whole or in part, with the services or activities of any member of the Keys Group as of the Closing Date. 
  
 (b) As an inducement for Buyer to enter into this Agreement and to consummate
the transactions set forth herein, Management Sellers hereby agree, consent to and acknowledge, as applicable, that for a period of three (3) years from the Closing Date neither the Management Sellers nor any of their affiliates shall solicit
for employment any employee of the Facilities or interfere with, disrupt or attempt to disrupt the relationship between Buyer and its lessors, lessees, contractors, licensors, licensees, customers, or suppliers pertaining to the operations of any
member of the Keys Group or the Facilities; provided that such limitations regarding solicitation shall not apply to any person who (i) responds to an advertisement which is placed in general circulation by or on behalf of Management Sellers
and which is not targeted at a person to whom the preceding otherwise would apply or (ii) contacts Management Sellers on her or his own initiative without any direct solicitation by Management Sellers. 
  
 (c) Lindley, Smith, Cawood and the Management Sellers each agree and
acknowledge their failure to comply with the provisions of this Section 7.13 will give rise to damages which may be impossible to measure accurately and that injuries sustained from such breach may be incalculable and irremediable.
Therefore, it is agreed that Buyer shall be entitled, in addition to all other remedies at law to equitable relief, including without limitation an injunction or order of specific performance in any court of competent jurisdiction, in the event of
any breach of this Section 7.13. Should litigation be necessary to enforce any provision in this Section 7.13, the prevailing party shall be entitled to recover all costs, including reasonable attorneys’ fees, incurred
prior to suit or after suit, in all court proceedings, including appellate courts. 
  
 ARTICLE 8 
  
 TERMINATION 
  
 8.1 Termination.
This Agreement and the transactions contemplated hereby may be terminated at any time prior to the Closing, as follows: 
  
 (a) by Buyer, if Buyer is prepared to close and all conditions of Selling Persons’ obligations to close pursuant to Section 6.2 have been
satisfied and Selling Persons fail to close in accordance with Article 3; 
  
 (b) by Sellers’ Representative, if Sellers are prepared to close and all conditions to Buyer’s obligations to close pursuant to Section 6.l have been satisfied and Buyer fails to close in
accordance with Article 3; 
  
 (c) by Buyer, if Selling Persons
fail to cure any material breach of this Agreement within thirty (30) days after receiving written notice thereof from Buyer; 
  
 (d) by Sellers’ Representative, if Buyer fails to cure any material breach of this Agreement within thirty (30) days after receiving written
notice thereof from Sellers’ Representative; or 

 (e) this Agreement may be terminated by Buyer or Sellers’ Representative in the event that the
Closing does not occur on or before October 31, 2005 (unless such date has been extended by mutual agreement of the parties); or 
  
 (f) in accordance with the provisions of Section 9.19 hereof. 
  
 8.2 Effect of Termination. Each party’s right of termination pursuant to Section 8.1 is in addition
to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. If this Agreement is terminated pursuant to Section 8.1, all further obligations of the
parties under this Agreement will terminate except as otherwise set forth in this Section. In the event this Agreement is terminated pursuant to Section 8.1, the provisions of Section 7.2, Section 7.3,
Section 7.5, Section 7.6 and Section 7.10 shall survive any such termination along with any other provisions of this Agreement, which expressly or by implication survive such termination. If this Agreement is terminated
by a party because of the breach of the Agreement by the other party or because one or more of the conditions to the terminating party’s obligations under this Agreement is not satisfied as a result of the other party’s failure to comply
with its obligations under this Agreement, the terminating party’s right to pursue all legal remedies will survive such termination unimpaired. 
  
 ARTICLE 9 
  
 MISCELLANEOUS 
  
 9.1 Assignment. Other than an assignment by Buyer to a subsidiary or an affiliate of Buyer, no party may assign this Agreement, in whole or in part, without the prior written consent of the other parties. At or
prior to Closing, Buyer shall have the right to designate one or more subsidiaries or affiliates of Buyer to take title to all or a portion of the Ownership Interests. No such designation shall have the effect of relieving Buyer of its obligations
under this Agreement, and Buyer hereby guarantees the performance under this Agreement of any of its subsidiaries or affiliates who assume this Agreement or all or a portion of Buyer’s obligations under this Agreement pursuant to this
Section 9.l. Any attempted assignment not in accordance herewith shall be null and void and of no force or effect. 
  
 9.2 Waiver, Amendment. No waiver, termination or discharge of this Agreement, or any of the terms or provisions hereof, shall be binding upon any
party unless confirmed in writing. No waiver by any party of any term or provision of this Agreement or of any default hereunder shall affect such party’s rights thereafter to enforce such term or provision or to exercise any right or remedy in
the event of any other default, whether or not similar. This Agreement may not be modified or amended except by a writing executed by the parties. 
  
 9.3 Interpretation. This Agreement shall not be construed more strictly against any party hereto, regardless of which party is responsible for its
preparation, it being agreed that this Agreement was fully negotiated by the parties. 
  
 9.4 Headings. The titles, captions and headings contained in this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect in any way the meaning or
interpretation of this Agreement. 
  
 9.5 Reference with
Agreement. References in this Agreement to numbered or lettered Articles, Sections, subsections, items, Exhibits, Appendices and Schedules refer to Articles, Sections, subsections, items, Exhibits, Appendices and Schedules of this Agreement
unless otherwise expressly 

 
stated. The words “herein,” “hereof,” “hereunder,” “hereby,” “this Agreement” and other similar references
shall be construed to mean and include this Agreement and all Exhibits, Appendices and Schedules to this Agreement, all Schedules to such Appendices and all amendments to any of them unless the context shall clearly indicate or require otherwise and
all of the above are specifically incorporated herein. 
  
 9.6
Binding Effect; Benefits. Subject to Section 9.1, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person or entity other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. 
  
 9.7
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws. 
  
 9.8 Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered or when received by mail, certified mail, postage prepaid as to each of the parties hereto or by facsimile transmission, receipt acknowledged, at the respective addresses
and facsimile numbers set forth on Schedule 9.8 (or at such other address as to which any such party may have notified the other party(ies) pursuant to the terms hereof). 
  
 9.9 Counterparts: Fax Signatures. This Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute the same Agreement. Any signature page of any such counterpart, or any electronic facsimile thereof may be attached or appended to any other counterpart to complete a fully
executed counterpart of this Agreement, and any telecopy or other facsimile transmission of any signature shall be deemed an original and shall bind such party. 
  

9.10 Entire Agreement. This Agreement, together with all Exhibits, Appendices and Schedules to this Agreement and the other Transaction
Documents contemplated hereby, contains the entire agreement and understanding concerning the subject matter hereof between the parties and, other than as specifically set forth herein, specifically supersedes any other agreement or understanding
among the parties related to the subject matter hereof. 
  
 9.11
Severability. If any provision of this Agreement shall be held void, voidable, invalid or inoperative, no other provision of this Agreement shall be affected as a result thereof, and, accordingly, the remaining provisions of this Agreement
shall remain in full force and effect as though such void, voidable, invalid or inoperative provision had not been contained herein. 
  
 9.12 Sellers’ Representative. Each Selling Person hereby irrevocably appoints Harbinger Private Equity Fund I, L.L.C. (the “Sellers’
Representative”) as the agent of such Selling Person for all purposes relating to or in connection with any transaction contemplated by or relating to this Agreement and to be carried out prior to, at or after the Closing including, but not
limited to: (i) approving any immaterial modifications or amendments to this Agreement; (ii) making decisions with respect to the determination of the Aggregate Net Working Capital of the Keys Group; (iii) the appointment of the
Escrow Agent and execution and delivery of the Escrow Agreement; (iv) entering into any settlement or submitting the dispute to the Independent Auditor; (v) taking any action that may be necessary or desirable, as determined by the
Sellers’ Representative, in its reasonable discretion, in connection with 

 
the termination of this Agreement; (vi) executing and delivering, on behalf of the Selling Persons’ any and all notices, documents or certificates
to be executed by the Selling Persons in connection with this Agreement and the transactions contemplated hereby; (vii) granting any consent or approval on behalf of the Selling Persons under this Agreement; (viii) negotiating,
compromising and resolving disputes with the Buyer that arise under this Agreement including disputes regarding indemnification claims by any party; (ix) exercising or refraining from exercising any remedy available to Selling Persons;
(x) waiving any and all conditions in Section 6.2; (xi) retaining such counsel, accountants and other professional advisors as the Sellers’ Representative reasonably deems necessary or appropriate to perform its duties
hereunder; (xii) giving such instructions and doing such other things and refraining from doing such other things as Sellers’ Representative in its sole discretion deems necessary or appropriate to carry out the provisions of the
Transaction Documents to which it is a party; and (xiii) to pay the fees, costs and expenses reasonably incurred by the Sellers’ Representative in the performance of its duties hereunder from the Sellers’ Representative Reserve. In
the event that the Sellers’ Representative Reserve is insufficient to pay such fees, costs and expenses, each Selling Person agrees to promptly pay its Pro Rata Share of such amounts in the manner specified in a written notice from
Sellers’ Representative. Each Selling Person hereby irrevocably appoints the Sellers’ Representative as such Selling Person’s true and lawful attorney-in-fact and agent, with full powers of substitution and resubstitution, in such
Selling Person’s name, place and stead, in any and all capacities (other than as agent for service of process), in connection with the transactions contemplated by this Agreement, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary to be done in connection with the sale of such Selling Person’s Ownership Interest as fully to all intents and purposes as such Selling Person might or could do in
person; such appointment as attorney-in-fact is coupled with an interest. Each Selling Person hereby authorizes the Buyer and its affiliates to rely upon the agency created hereby and releases Buyer and its affiliates from any and all liability to
such Selling Person of whatever nature arising out of or relating to such agency, to the same extent as though any act committed or omitted by the Sellers’ Representative pursuant to such agency had been committed or omitted by such Selling
Person. On thirty (30) days prior written notice to the Selling Persons and to Buyer, the Sellers’ Representative may resign its appointment. Prior to the effective date of such resignation, those Selling Persons holding more than 50% of
the Pro Rata Share shall designate in writing a replacement Sellers’ Representative who shall possess the same rights and obligations as the then existing Sellers’ Representative. Immediately upon designation of a replacement Sellers’
Representative, Selling Persons shall cause written notice of such designation of the replacement Sellers’ Representative to be delivered to Buyer, along with all contact and notice information for such replacement Sellers’ Representative.

  
 9.13 Indemnification of Sellers’ Representative.
Selling Persons hereby agree to indemnify and to save and hold harmless the Sellers’ Representative severally, not jointly, in accordance with their respective Pro Rata Share from any liability loss, cost, damage or expense, including attorneys
fees (reasonably incurred or suffered as a result of the performance of its duties under this Agreement) incurred by the Sellers’ Representative based upon or arising out of any act, whether of omission or commission, of the Sellers’
Representative pursuant to the authority herein granted, other than acts, whether of omission or commission, of the Sellers’ Representative that constitute gross negligence or willful misconduct in the exercise by the Sellers’
Representative of the authority herein granted. 
  
 9.14
Reserved. 
  
 9.15 Knowledge. “Knowledge of
Management Sellers” (and any similar expression) means, as to a particular matter, the actual knowledge of any person specified on Schedule 9.15(a) hereto. Knowledge with respect to Buyer means, as to a particular matter, the actual
knowledge of any person specified on Schedule 9.15(b) hereto. 

 9.16 Dispute Resolution. 
  
 (a) Agreement to Arbitrate. The parties plan to work together to implement this Agreement. However, the parties
understand that issues and conflicts may arise. The parties acknowledge their desire to reach a working solution by using good faith attempts to resolve such issues and conflicts. If such good faith attempts are unsuccessful, the parties agree that,
except as otherwise provided in this Agreement, either Buyer or Sellers’ Representative may demand arbitration of any claim, controversy, issue or dispute (hereafter “Dispute”) arising out of or relating to this Agreement, unless the
amount of the damage or loss is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration. 
  
 (b) Location of Arbitration; Rules. Arbitration shall be conducted in
Wilmington, Delaware under the Commercial Arbitration Rules then in effect of the American Arbitration Association (“AAA”), and administered by the AAA. 
  
 (c) Selection of Arbitrator(s). 
  
 (i) In the event of arbitration with an amount in controversy equal to or less than $250,000, arbitration shall be
conducted by one (1) neutral arbitrator mutually agreed upon by the parties. If no arbitrator is agreed upon within ten (10) days of commencement of Arbitration, or if the arbitrator selected by the Buyer and Sellers’ Representative
is unable or unwilling to arbitrate the Dispute, the parties shall request that a neutral arbitrator be selected by the AAA. 
  
 (ii) In the event of arbitration with an amount in controversy greater than $250,000, Arbitration shall be conducted by three neutral arbitrators. Within
fifteen (15) days of commencement of arbitration, each of Buyer and Sellers’ Representative shall select one (1) neutral arbitrator in whatever area(s) of expertise such party believes is relevant to the dispute. Within ten
(10) days of their appointment, the two (2) neutral arbitrators so selected shall select the third neutral arbitrator from a list provided by the AAA who shall be a practicing attorney having experience in the area of commercial contracts
and who shall act as chair of the arbitration panel. If the arbitrators selected by Buyer and Sellers’ Representatives are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the AAA. 
  
 (d) Procedure. The arbitrator(s) shall set a limited time period and
establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, in the discretion of the arbitrator(s) to discover relevant information from the opposing party about the subject matter of the
Dispute. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the sole arbitrator or the chair of the arbitration panel, as the case may be, and shall be governed by the Federal Rules of Civil Procedure. The
award by the arbitrator(s) shall be in writing, shall be signed by the sole arbitrator or a majority of the arbitrators, as the case may be, and shall include a statement of findings of fact and conclusions regarding the reasons for the disposition
of any claim. No statements by, or communications between, the parties during negotiation or mediation, or both, will be admissible for any purpose in arbitration. 
  
 (e) Costs and Expenses. As between Buyer and Selling Persons, each shall bear its own expenses and its
attorney’s fees and expenses, and shall equally share the arbitrators’ fees, administrative fees and travel expenses, provided, however, that each of Buyer and the Selling Parties shall be responsible for 50% of the fees and expenses due
to the Escrow Agent. Judgment on the award entered by the arbitrators may be entered in and enforced by any court of competent jurisdiction. 

 (f) Limitations/Injunctive Relief. Except as set forth in Section 7.10(h), the
arbitrator shall not be empowered to award punitive, special, indirect, consequential or incidental damages, including loss of profits. Notwithstanding the foregoing, either party may resort to a court by applying for interim, injunctive, or
equitable relief, if such party reasonably determines that such relief is necessary to prevent irreparable injury to it or to a third party. 
  
 9.17 Consent and Waiver of Rights. As additional consideration for receiving his/her/its Pro Rata Share of the net proceeds of the Purchase Price,
each Selling Person hereby: (a) acknowledges that this Agreement contemplates the sale of all of the Ownership Interests in Keys by all of the Selling Persons to Buyer and that pursuant to it all of the holders of Preferred Shares and Common
Shares are selling their Ownership Interests to Buyer; (b) waives any and all rights to receive notice of the proposed sale of Ownership Interests by any of the other Selling Persons to which the Selling Person might otherwise be entitled under
the Limited Liability Company Agreement dated January, 2002, as amended (the “Operating Agreement”), the Investors’ Rights Agreement dated January, 2002, the Series B Common Share Purchase Warrant dated September 24, 2002, or any
other agreement, instrument or document (collectively, the “Share Agreements”); (c) waives any and all rights to purchase Ownership Interests from any of the other Selling Persons which the Selling Person might have under the Share
Agreements; (d) consents to the sale by each of the other Selling Persons of his/her/its Ownership Interests to Buyer pursuant to this Agreement free and clear of all Liens; and (e) waives his/her/its right to apply Section 11.2 of
the Operating Agreement to the purchase of Ownership Interests by Buyer. 
  
 9.18 Waiver of Existing Non-Competition and Non-Solicitation Covenants. Buyer hereby agrees to waive and cause Keys to waive any right it might have following Closing to enforce the non-competition and
non-solicitation covenants contained in Section 9.5 of the Operating Agreement with respect to the Selling Persons. Furthermore, Buyer hereby agrees to waive and cause Keys to waive any right it might have following Closing to enforce the
non-competition and non-solicitation covenants contained in Section 10(d) of the Key’s Share Option Plan with respect to Selling Option Holders. Nothing contained in this Section 9.18 shall modify, restrict or otherwise affect
in any way Buyer’s rights under the provisions set forth in Section 7.13. 
  
 9.19. Schedules. Between October 3, 2005 and October 5, 2005, Buyer and the Management Sellers shall review the Schedules provided to such party and shall communicate with each other in order to
determine if they can reach mutual agreement regarding the content of the Schedules under this Agreement. In the event that Buyer and the Management Sellers are unable to reach mutual agreement regarding the content of the Schedules required under
this Agreement by 6:00 p.m. ET on October 5, 2005 (or such later date or time as the Buyer and the Management Sellers may mutually agree upon in writing), then either Buyer or the Management Sellers may upon written notice to the other
terminate this Agreement. 
  
 9.20 Red River. Red River
Ventures I, L.P. (“RRV”) is the owner of one hundred percent of the issued and outstanding capital stock (the “KGK Stock”) of Keystone Group Kids, Inc. (“KGK”) and has requested that Buyer consider acquiring the
Ownership Interests held by KGK indirectly through a purchase of the KGK Stock. In the event Buyer determines, in its sole discretion, that it is willing to acquire KGK’s Ownership Interests indirectly through a purchase of the KGK Stock, the
Selling Persons hereby consent to Buyer’s purchase of the KGK Stock. If, contemporaneous with the Closing, the Sellers’ Representative receives (i) written notice from Buyer that it will be consummating the purchase of the KGK Stock
contemporaneously with the Closing and (ii) an undertaking by RRV in favor of the Selling Persons and Buyer, in a form acceptable to Sellers’ Representative and Buyer, whereby RRV agrees (a) to become a substitute party, in all
respects, for KGK under this Agreement and (b) to assume and be responsible for all liabilities and obligations which KGK would have been responsible for under 

 
this Agreement and all other Transaction Documents but for the substitution of parties; then, at Closing, the Sellers’ Representative will deliver to
Buyer and KGK a release acceptable to Buyer releasing KGK from any liability and obligations under this Agreement all other Transaction Documents. Notwithstanding anything herein to the contrary, it is expressly understood and agreed that Buyer
shall be under no obligation to purchase the KGK Stock or enter into negotiations for the purchase of the KGK Stock or take any other action with respect thereto. 
  
 [signature pages follow] 

 [Signature Page 1 of 2 of Ownership Interest Purchase Agreement] 
  
 IN WITNESS WHEREOF, the undersigned have caused their respective duly
authorized representatives to execute this Agreement as of the day and year first above written. 
  

	
	 Keystone Group Kids, Inc.

	
	 /s/ Bruce Duty

	 Bruce Duty
 Authorized Officer

	
	 Harbinger Private Equity Fund I, L.L.C.

	
	 /s/ Michael Luce

	 Michael Luce
 Authorized Officer

	
	 /s/ Michael Lindley

	 Michael Lindley

	
	 /s/ Martin Weber

	 Martin Weber

	
	 Ameris Healthcare Investments, LLC

	
	 /s/ Sam Lewis

	 Sam Lewis
 Authorized Officer

	
	 /s/ Al Smith

	 Al Smith

	
	 /s/ Rodney Cawood

	 Rodney Cawood

	
	 /s/ Jeff Cross

	 Jeff Cross

	
	 /s/ Brad Gardner

	 Brad Gardner

	
	 /s/ Don Wert

	 Don Wert

	
	 /s/ Mike McCulla

	 Mike McCulla

	
	 /s/ J. Rainer Twiford

	 J. Rainer Twiford

	
	 /s/ Buddy Turner

	 Buddy Turner

	
	 /s/ Mike White

	 Mike White

	
	 /s/ Gail Debiec

	 Gail Debiec

	
	 /s/ Brad Williams

	 Brad Williams

	
	 /s/ Rob Minor

	 Rob Minor

	
	 /s/ Jim Shaheen

	 Jim Shaheen

 [Signature Page 2 of 2 of Ownership Interest Purchase Agreement] 
  

	
	 /s/ Rod Gaeta

	 Rod Gaeta

	
	 Universal Health Services, Inc.

	
	 /s/ Steve Filton

	 Steve Filton
 Authorized Officer

 EXHIBIT A 
  

KEYS COMPANIES 
  
 Keystone Nevada, LLC 
 Keystone Memphis, LLC 
 Keystone Education Transportation, LLC 
 Elmira NPS, LLC 
 Alicante School Elk Grove, LLC 
 Keystone Savannah, LLC 
 Keystone Newport News, LLC 
 Keystone Marion, LLC 
 Keystone WSNC, L.L.C. 
 Keystone Oklahoma City, LLC 
 CCS/Altacare of Arkansas, Inc. 
 Chad Youth Enhancement Center, Inc. 
 CCS/Bay County, Inc. 
 CCS/Meadow Pines, Inc. 
 Ventures Healthcare of Gainesville, Inc. 
 CCS/Little Rock, Inc. 
 CCS/Rivendell of Kentucky, Inc. 
 CCS/Lansing, Inc. 
 Associated Child Care Educational Services, Inc. 
 American Clinical Schools, Inc. 
 Alabama Clinical Schools, Inc. 
 Pennsylvania Clinical Schools, Inc. 
 Tennessee Clinical Schools, Inc. 
 Keystone NPS, LLC 
 Keystone Continuum, LLC 
 Keystone Detention, LLC 
 Keystone Richland Center, LLC 
 Keystone DJJ, LLC 
 Keystone Charlotte, LLC 
 Keystone JJAEP, LLC 

 EXHIBIT B 
  

KEYS FACILITIES 
  

			
	 Facility

	  	 State

		
	 Alabama Clinical Schools
	  	 AL

		
	 Tennessee Valley Juvenile Detention Center
	  	 AL

		
	 Tuscaloosa Juvenile Detention Center
	  	 AL

		
	 Bristol Youth Academy
	  	 FL

		
	 Jacksonville Youth Center
	  	 FL

		
	 The H.O.P.E. Program
	  	 FL

		
	 Nueces County Juvenile Justice
	  	 TX

		
	 Cedar Grove
	  	 TN

		
	 Chad Youth Enhancement Center
	  	 TN

		
	 Cherokee Park Youth Center
	  	 TN

		
	 Compass Intervention Center
	  	 TN

		
	 Hermitage Hall
	  	 TN

		
	 McDowell Center for Children
	  	 TN

		
	 Natchez Trace Youth Academy
	  	 TN

		
	 Upper East Tennessee
	  	 TN

		
	 Old Vineyard Youth Services
	  	 NC

		
	 The Keys of the Carolinas
	  	 NC

		
	 Keystone Newport News Youth Center
	  	 VA

		
	 Marion Youth Center
	  	 VA

		
	 Pennsylvania Clinical Schools
	  	 PA

		
	 Children’s Comprehensive Services of Ohio
	  	 OH

		
	 Turning Point Youth Center
	  	 MI

		
	 Highlander Children’s Services
	  	 CA

		
	 Keystone Carmichael
	  	 CA

		
	 Keystone Desert Hot Springs
	  	 CA

		
	 Keystone Elmira
	  	 CA

		
	 Keystone Grand Terrace
	  	 CA

		
	 Keystone Hemet
	  	 CA

		
	 Keystone Highlander
	  	 CA

		
	 Keystone Laguna
	  	 CA

		
	 Keystone Mar Vista
	  	 CA

		
	 Keystone Ramona
	  	 CA

		
	 Keystone Rancho Cucamonga
	  	 CA

		
	 Keystone Riverside
	  	 CA

		
	 Keystone Steele Canyon
	  	 CA

		
	 Keystone Vallejo
	  	 CA

		
	 Keystone Van Nuys
	  	 CA

		
	 Keystone Victorville
	  	 CA

		
	 Keystone Ventura
	  	 CA

 EXHIBIT C 
  

FORM OF ESCROW AGREEMENT 
  
 See Attached

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