BY AND AMONG

Exhibit 2.2

ASSET PURCHASE AGREEMENT

BY AND AMONG

PSYCHIATRIC SOLUTIONS, INC.,

BRENTWOOD HEALTH MANAGEMENT OF MS, LLC,

AND

XXXXXX-XXXXXXX OF MISSISSIPPI, LLC

FEBRUARY 23, 2004

TABLE OF CONTENTS

Page

AGREEMENT........................................................................................................ 2
ARTICLE 1. PURCHASE OF ASSETS................................................................................... 2
1.1. Assets............................................................................................. 2
1.2. Excluded Assets.................................................................................... 4
1.3. Assumed Liabilities................................................................................ 5
1.4. Excluded Liabilities............................................................................... 5
1.5. Purchase Price..................................................................................... 7
1.6. Calculation of Working Capital..................................................................... 9
ARTICLE 2. CLOSING.............................................................................................. 10
2.1. Closing............................................................................................ 10
2.2. Actions of Sellers at Closing...................................................................... 10
2.3. Actions of Buyer at Closing........................................................................ 12
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLERS............................................................ 12
3.1. Existence and Capacity............................................................................. 12
3.2. Powers; Governmental Consents; Absence of Conflicts With Other Agreements, Etc..................... 13
3.3. Binding Agreement.................................................................................. 13
3.4. Financial Statements............................................................................... 13
3.5. Certain Post-Balance Sheet Results................................................................. 14
3.6. Licenses........................................................................................... 15
3.7. Certificates of Need............................................................................... 15
3.8. Medicare Participation; Accreditation.............................................................. 16
3.9. Regulatory Compliance.............................................................................. 16
3.10. Equipment.......................................................................................... 16
3.11. Real Property...................................................................................... 17
3.12. Title.............................................................................................. 19
3.13. Employee Benefit Plans............................................................................. 19
3.14. Litigation or Proceedings.......................................................................... 20
3.15. Environmental Laws................................................................................. 20
3.16. Xxxx-Xxxxxx and Other Liens........................................................................ 21
3.17. Taxes.............................................................................................. 21
3.18. Employee Relations................................................................................. 22
3.19. Agreements and Commitments......................................................................... 22
3.20. Contracts.......................................................................................... 23
3.21. Supplies........................................................................................... 24
3.22. Insurance.......................................................................................... 24
3.23. Third Party Payor Cost Reports..................................................................... 24
3.24. Medical Staff Matters.............................................................................. 25
3.25. Condition of Assets................................................................................ 25
3.26. Intellectual Property; Computer Software........................................................... 25
3.27. Accounts Receivable................................................................................ 25
3.28. Compliance Program................................................................................. 25
3.29. HIPAA Compliance................................................................................... 26
3.30. Full Disclosure.................................................................................... 26

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................. 27
4.1. Existence and Capacity............................................................................. 27
4.2. Powers; Governmental Consents; Absence of Conflicts
With Other Agreements, Etc......................................................................... 27
4.3. Binding Agreement.................................................................................. 27
4.4. Availability of Funds for Purchase................................................................. 28
ARTICLE 5. COVENANTS OF SELLERS PRIOR TO CLOSING................................................................ 28
5.1. Information........................................................................................ 28
5.2. Operations......................................................................................... 28
5.3. Negative Covenants................................................................................. 29
5.4. Governmental Approvals............................................................................. 29
5.5. Additional Financial Information................................................................... 30
5.6. No-Shop Clause..................................................................................... 30
5.7. Title Commitment and Survey; UCC Searches; Defects and Cure........................................ 30
5.8. Insurance Ratings.................................................................................. 32
5.9. Medical Staff Disclosure........................................................................... 33
ARTICLE 6. COVENANTS OF BUYER PRIOR TO CLOSING.................................................................. 33
6.1. Governmental Approvals............................................................................. 33
6.2. Inspection of Improvements, Systems, and Equipment; Limitation of Post-Closing
Warranties of Condition............................................................................ 33
ARTICLE 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER......................................................... 33
7.1. Representations/Warranties......................................................................... 33
7.2. Pre-Closing Confirmations.......................................................................... 34
7.3. Title Policy....................................................................................... 34
7.4. Actions/Proceedings................................................................................ 34
7.5. Adverse Change..................................................................................... 35
7.6. Insolvency......................................................................................... 35
7.7. Opinion of Counsel to Sellers...................................................................... 35
7.8. Vesting/Recordation................................................................................ 35
7.9. Delivery of Certain Documents...................................................................... 35
7.10. Simultaneous Closing............................................................................... 35
7.11. Due Diligence...................................................................................... 35
7.12. Interim Management Agreement....................................................................... 35
7.13. Insurance.......................................................................................... 35
7.14. Extensions of Certain Leases....................................................................... 35
ARTICLE 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS....................................................... 36
8.1. Representations/Warranties......................................................................... 36
8.2. Buyer's Governmental Approvals..................................................................... 36
8.3. Actions/Proceedings................................................................................ 36
8.4. Insolvency......................................................................................... 36
8.5. Opinion of Counsel to Buyer........................................................................ 36
8.6. Interim Management Agreement....................................................................... 36
8.7. Delivery of Certain Documents...................................................................... 36
8.8. Simultaneous Closing............................................................................... 37
ARTICLE 9. SELLERS' POST CLOSING COVENANTS...................................................................... 37
9.1. Covenant Not to Compete; Non-solicitation.......................................................... 37
9.2. Allocation of Purchase Price....................................................................... 37
9.3. Post Closing Access to Information................................................................. 38

9.4. Preservation and Access to Records After the Closing............................................... 38
9.5. Cooperation on Tax Matters......................................................................... 38
9.6. Cost Reports....................................................................................... 39
9.7. Misdirected Payments, Etc.......................................................................... 39
9.8. Use of Controlled Substance Permits................................................................ 39
9.9. Loss Experience.................................................................................... 40
9.10. Net Worth Covenant................................................................................. 40
9.11. Option to Purchase Additional Assets............................................................... 40
ARTICLE 10. ADDITIONAL AGREEMENTS............................................................................... 40
10.1. Termination Prior to Closing....................................................................... 40
10.2. CON Disclaimer..................................................................................... 41
10.3. Tax and Medicare Effect............................................................................ 41
10.4. Reproduction of Documents.......................................................................... 41
10.5. Employee Matters................................................................................... 41
10.6. Insurance.......................................................................................... 42
ARTICLE 11. INDEMNIFICATION..................................................................................... 42
11.1. Indemnification by Buyer........................................................................... 42
11.2. Indemnification by Sellers......................................................................... 43
11.3. Limitations........................................................................................ 43
11.4. Notice and Control of Litigation................................................................... 43
11.5. Notice of Claim.................................................................................... 44
ARTICLE 12. MISCELLANEOUS....................................................................................... 45
12.1. Schedules and Other Instruments.................................................................... 45
12.2. Additional Assurances.............................................................................. 45
12.3. Consented Assignment............................................................................... 45
12.4. Consents, Approvals and Discretion................................................................. 46
12.5. Legal Fees and Costs............................................................................... 46
12.6. Choice of Law...................................................................................... 46
12.7. Benefit/Assignment................................................................................. 46
12.8. No Brokerage....................................................................................... 46
12.9. Cost of Transaction................................................................................ 46
12.10. Confidentiality.................................................................................... 47
12.11. Public Announcements............................................................................... 47
12.12. Waiver of Breach................................................................................... 47
12.13. Notice............................................................................................. 47
12.14. Severability....................................................................................... 48
12.15. Gender and Number.................................................................................. 48
12.16. Divisions and Headings............................................................................. 48
12.17. Survival........................................................................................... 48
12.18. Affiliates......................................................................................... 49
12.19. Knowledge.......................................................................................... 49
12.20. Resolution of Disputes............................................................................. 49
12.21. Accounting Date.................................................................................... 50
12.22. No Inferences...................................................................................... 50
12.23. No Third Party Beneficiaries....................................................................... 50
12.24. Enforcement of Agreement........................................................................... 50
12.25. Entire Agreement; Amendment........................................................................ 51
12.26. Risk of Loss....................................................................................... 51

iii

12.27. Other Owners of Assets............................................................................. 51
12.28. Transfer, Sales and Other Taxes.................................................................... 51
12.29. Prorations......................................................................................... 51

EXHIBITS

DESCRIPTION EXHIBIT
------------ -------

The Facilities....................................................................................... A
Buyer Entities....................................................................................... B
Escrow Agreement..................................................................................... C
Opinion of Counsel to Sellers........................................................................ D
Opinion of Counsel to Buyer.......................................................................... E
Limited Power of Attorney............................................................................ F
Interim Management Agreement......................................................................... G
Form of Guaranty..................................................................................... H

SCHEDULES

DESCRIPTION SCHEDULE
----------- --------

Real Property........................................................................................ 1.1(a)
Tangible Personal Property........................................................................... 1.1(b)
Contracts............................................................................................ 1.1(i)
Excluded Assets...................................................................................... 1.2
Capital Lease Obligations............................................................................ 1.3(c)
Excluded Liabilities................................................................................. 1.4
EBITDA Example Calculation........................................................................... 1.5(c)
Working Capital as of December 31, 2003.............................................................. 1.6
Powers; Governmental Consents; Absence of Conflicts with Other Agreements, Etc....................... 3.2
Financial Statements................................................................................. 3.4
Certain Post-Balance Sheet Results................................................................... 3.5
Licenses............................................................................................. 3.6
Certificates of Need................................................................................. 3.7
Medicare Participation; Accreditation................................................................ 3.8
Regulatory Compliance................................................................................ 3.9
Equipment............................................................................................ 3.10
Real Property ....................................................................................... 3.11
Employee Benefit Plans............................................................................... 3.13
Litigation or Proceedings............................................................................ 3.14
Environmental........................................................................................ 3.15
Taxes................................................................................................ 3.17
Employee Relations................................................................................... 3.18
Supplies............................................................................................. 3.21
Insurance............................................................................................ 3.22
Third Party Payor Cost Reports....................................................................... 3.23
Medical Staff Matters................................................................................ 3.24
Intellectual Property; Computer Software............................................................. 3.26
Compliance Program................................................................................... 3.28
Buyer Absence of Conflicts with Other Agreements, Etc................................................ 4.2(c)
Allocation of Purchase Price......................................................................... 9.2

GLOSSARY OF DEFINED TERMS

DEFINED TERM SECTION
------------ -------

Accessibility Laws...................................................................... 3.11(d)
Accrued PTO............................................................................. 1.3(d)
Affiliate............................................................................... 12.18
Agreement............................................................................... Introduction
Applications............................................................................ 3.7
Assets.................................................................................. 1.1
Asset Defect............................................................................ 6.2
Assignment and Assumption Agreement..................................................... 2.2(c)
Assumed Liabilities..................................................................... 1.3
Balance Sheet Date...................................................................... 3.4(a)
Benefit Plans........................................................................... 3.13
Business Associates..................................................................... 3.29
Buyer................................................................................... Introduction
Buyer Entities.......................................................................... Recital G
Buyer Indemnified Parties............................................................... 11.2
CERCLA.................................................................................. 3.15
Certificate of Need..................................................................... 3.7
Closing................................................................................. 2.1
Closing Balance Sheet................................................................... 1.6
Closing Date............................................................................ 2.1
Closing Documents....................................................................... 3.30
Code.................................................................................... 3.13
Compliance Program...................................................................... 3.28
Contracts............................................................................... 1.1(i)
Control................................................................................. 12.18
Covered Entity.......................................................................... 3.29
Defects................................................................................. 5.7(d)
EBITDA.................................................................................. 1.5(c)
Environmental Laws...................................................................... 3.15
ERISA................................................................................... 3.13
Excluded Assets......................................................................... 1.2
Excluded Liabilities.................................................................... 1.4
Exemption Certificate................................................................... 3.7
Facilities.............................................................................. Recital E
Financial Statements.................................................................... 3.4
GAAP.................................................................................... 3.4
Government Entity....................................................................... 3.9
Government Patient Receivables.......................................................... 1.2(f)
Government Patient Receivables Amount................................................... 1.1(f)
Guarantor............................................................................... Introduction
Guarantors.............................................................................. Introduction
HIPAA................................................................................... 3.30
Indemnified Party....................................................................... 11.4
Indemnifying Party...................................................................... 11.4

Intellectual Property................................................................... 3.26
Interim Statements...................................................................... 5.5
JCAHO................................................................................... 3.8
Knowledge............................................................................... 12.19
Other Purchase Agreement................................................................ Recital H
Permitted Encumbrances.................................................................. 3.11
Privacy Standards....................................................................... 3.29
Proposed Amendment...................................................................... 9.11
Purchase Price.......................................................................... 1.5
RCRA.................................................................................... 3.15
Real Estate Taxes....................................................................... 12.29
Real Property........................................................................... 1.1(a)
Real Property Leases.................................................................... 3.11(k)
Records................................................................................. 10.4
Restricted Area......................................................................... 9.1
Seller.................................................................................. Introduction
Sellers................................................................................. Introduction
Seller Cost Reports..................................................................... 10.9
Seller Indemnified Parties.............................................................. 11.1
Seller Representative................................................................... 1.5(c)
State Health Agency..................................................................... 3.6
Surveys................................................................................. 5.7(b)
Tax Excess.............................................................................. 12.29
Tax Refund.............................................................................. 12.29
TCS Standards........................................................................... 3.29
Threshold Amount........................................................................ 11.3
Title Commitment........................................................................ 5.7(a)
Title Company........................................................................... 5.7(a)
Title Evidence.......................................................................... 5.7(d)
Title Policy............................................................................ 5.7(a)
U.C.C. Searches......................................................................... 5.7(c)
WARN Act................................................................................ 10.11
Working Capital......................................................................... 1.5(b)

vii

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the "AGREEMENT") is made and entered
into as of February 23, 2004, by and among Brentwood Health Management of MS,
LLC, a Mississippi limited liability company, Xxxxxx-Xxxxxxx of Mississippi,
LLC, a Louisiana limited liability company (each as a "SELLER" and collectively
as "SELLERS"), and Psychiatric Solutions, Inc., a Delaware corporation
("BUYER").

RECITALS

X. Xxxxxx-Xxxxxxx of Mississippi, Inc. owns all of the real
property and certain of the personalty to be transferred to Buyer.

B. Brentwood Health Management of MS, LLC is the operator of the
hospital facility and employs substantially all of the employees at the
facility.

C. Xxxx X. Xxxxxx, Xx. and Xxxxxxx X. Xxxxxxx (through Brentwood
Health Management, L.L.C., a Louisiana limited liability company), Xxxxx X.
Xxxxxx, Xx., and Xxxxx X. Xxxxxxx collectively own 100% of the membership
interest of Brentwood Health Management of MS, LLC.

D. Xxxx X. Xxxxxx, Xx. and Xxxxxxx X. Xxxxxxx (through Pine Creek
Corporation, a Louisiana corporation), Xxxxx X. Xxxxxx, Xx., and Xxxxx X.
Xxxxxxx collectively own 100% of the membership interest of Xxxxxx-Xxxxxxx of
Mississippi, L.L.C.

E. The Sellers directly and/or indirectly own and operate the
hospital and the medical office building set forth on Exhibit A attached hereto
(collectively, the "FACILITIES").

X. Xxxxxxx desire to sell to Buyer and Buyer desires to purchase
substantially all of the assets of Sellers (inclusive of the Facilities), their
ancillary services and other licensed healthcare facilities (more fully set
forth below as the Assets), on the terms and conditions set forth in this
Agreement.

G. Buyer intends to organize the wholly owned, direct or indirect
subsidiaries listed on Exhibit B attached hereto (collectively, the "BUYER
ENTITIES") to purchase the Facilities from the Sellers.

H. Simultaneous herewith, Buyer and certain of Sellers and their
Affiliates have entered into an asset purchase agreement for the purchase and
sale of a hospital facility, medical office building, and certain other
operations located in Shreveport, Louisiana (the "OTHER PURCHASE AGREEMENT").

AGREEMENT

NOW, THEREFORE, for and in consideration of the premises and the
agreements, covenants, representations, and warranties hereinafter set forth and
other good and valuable consideration, the receipt and adequacy of which are
forever acknowledged and confessed, the parties hereto agree as follows:

ARTICLE 1
PURCHASE OF ASSETS

1.1. ASSETS. Subject to the terms and conditions of this Agreement,
as of the Closing (as defined in Section 2.1 hereof), Sellers agree to sell,
convey, transfer and deliver to the Buyer Entities designated by Buyer, and
Buyer agrees to cause the Buyer Entities to purchase, all of the assets owned or
used by the Sellers in connection with the operation of the Facilities, other
than the Excluded Assets (hereinafter defined), which included assets shall
include, without limitation, the following (the "ASSETS"):

(a) fee simple and/or leasehold title to all real
property described and designated as such on Schedule 1.1(a) hereto,
together with all improvements, any construction in progress, any other
buildings and fixtures thereon, and all rights, privileges,
hereditaments and easements appurtenant thereto, including without
limitation, all sewer and water discharge capacity, if any, allocated
or reserved thereto and all development rights with respect thereto
(collectively, the "REAL PROPERTY");

(b) all tangible personal property owned by the Sellers
and used in connection with the operation of the Facilities, including,
without limitation, all major, minor or other equipment, vehicles,
furniture and furnishings, the current list and general location of
which are set forth on Schedule 1.1(b) hereto;

(d) assumable deposits and prepaid expenses;

(e) all accounts receivable (other than receivables from
governmental third-party payors which by law may not be assigned)
arising from the rendering of services to patients at the Facilities,
billed and unbilled, recorded or unrecorded, with collection agencies
or otherwise, accrued and existing in respect of services prior to the
Closing;

(f) the right to receive an amount equal to the value of
all patient receivables collected related to Medicare, Medicaid and
other third-party patient claims of the Sellers due from governmental
third-party payors arising from the rendering of services to patients
at the Facilities, billed and unbilled, recorded or unrecorded, with
collection agencies or otherwise, accrued and existing in respect of
services prior to the Closing which by law may not be assigned
(excluding settlement accounts relating to Sections 1.2(c) and 1.4(e)),
less any applicable overpayments, refunds, offsets, credit balances or
other proper adjustments (the "GOVERNMENT PATIENT RECEIVABLES AMOUNT");

(g) all claims, causes of action, and judgments in favor
of the Sellers relating to the Assets and, to the extent assignable by
the Sellers, all warranties (express or implied) and rights and claims
assertable by (but not against) the Sellers related to the Assets;

(h) all financial, patient, medical staff records and
personnel records (as required for accreditation purposes) relating to
the Facilities (including, without limitation, all equipment records,
medical administrative libraries, medical records, documents, catalogs,
books, records, files, operating manuals and current personnel
records);

(i) all rights and interests of the Sellers in the
contracts, commitments, leases and agreements listed on Schedule 1.1(i)
hereto (collectively, the "CONTRACTS");

(j) all licenses, certificates of need (including
Mississippi certificates of need #R-0076 and #R-87029), franchises,
accreditations, registrations, and other permits, to the extent
assignable, held by the Sellers relating to the Facilities (including,
without limitation, any pending or approved governmental approvals);

(k) all names, trade names, trademarks and service marks
(or variations thereof) associated with the Facilities, all goodwill
associated therewith, and all applications and registrations associated
therewith;

(l) all assets reflected on the Financial Statements (as
defined in Section 3.4), and any additions thereto up through Closing
less deletions therefrom of assets sold or consumed in the ordinary
course of business;

(m) all goodwill associated with the Facilities and the
Assets;

(n) to the extent assignable, all provider contracts (and
numbers) between the Facilities and Medicare, Medicaid, TRICARE or
other third party payors;

(o) all insurance proceeds arising in connection with
property damage to the Assets occurring prior to the Closing Date, to
the extent not expended on the repair or restoration of the Assets;

(p) all computers, data processing equipment and
software, to the extent transferable, held or used directly in the
business or operation of the Facilities;

(q) the assets owned by Affiliates of Sellers which are
used directly in connection with the operation of the Facilities;

(r) all other property, other than the Excluded Assets,
of every kind, character or description owned by Sellers or their
Affiliates and used or held for use directly in the business of the
Facilities or the Assets, whether or not reflected on the Financial
Statements, wherever located and whether or not similar to the items
specifically set forth above, and all other businesses and ventures
owned by the Sellers in connection with the operations of the
Facilities or the Assets; and

(s) the interests of the Sellers in all property of the
foregoing types, arising or acquired in the ordinary course of the
business of the Sellers in respect of the Facilities between the date
hereof and the Closing Date.

(t) To the extent not received by Sellers prior to the
Closing, the Sellers' right to the refund pending from the Mississippi
Medicaid program in the approximate amount of $2,019,038.

The Sellers shall convey, subject to the limitations set forth in Section 2.2(a)
and (b), good and marketable title to the Assets and all parts thereof to Buyer
free and clear of all claims, assessments, security interests, liens,
restrictions and encumbrances, other than the Permitted Encumbrances
(hereinafter defined) and the Assumed Liabilities (hereinafter defined).

1.2. EXCLUDED ASSETS. Those assets of the Sellers described below,
together with any assets described on Schedule 1.2 hereto, shall be retained by
the Sellers (collectively, the "EXCLUDED ASSETS") and shall not be conveyed to
Buyer:

(a) cash and cash equivalents;

(b) board-designated, restricted and trustee-held or
escrowed funds (such as funded depreciation, debt service reserves,
working capital trust assets, and assets and investments restricted as
to use) and accrued earnings thereon;

(c) all amounts payable to the Sellers in respect of
third party payors pursuant to retrospective settlements (including,
without limitation, pursuant to Medicare, Medicaid and TRICARE cost
reports filed or to be filed by the Sellers for periods prior to
Closing) and any tax refunds, rebates or payments payable to the
Sellers;

(d) all of Sellers' records relating to the Excluded
Assets and Excluded Liabilities (as defined below) to the extent that
Buyer does not need the same post-Closing in connection with the
ongoing activities of the Facilities, the Assets or the Assumed
Liabilities (as defined below), as well as all records which by law the
Sellers are required to maintain in their possession;

(e) any prepaid expenses related to the Excluded Assets
and Excluded Liabilities (such as prepaid legal expenses or insurance
premiums);

(f) all patient receivables related to Medicare, Medicaid
and other third party patient claims of the Sellers due from
governmental third party payors arising from the rendering of services
to patients at the Facilities, billed and unbilled, recorded or
unrecorded, accrued and existing in respect of services prior to the
Closing which by law may not be assigned ("GOVERNMENT PATIENT
RECEIVABLES");

(g) all supplies, drugs, food and other disposables and
consumables disposed of by the Sellers in the ordinary course of
business prior to Closing consistent with past practices of Sellers;

(h) all policies of casualty, liability or other
insurance maintained by Sellers with regard to the Facilities and
Assets and any refund of premium due therefrom; and

(i) Mississippi certificates of need #R-0077 and #R-0134.

1.3. ASSUMED LIABILITIES. In connection with the conveyance of the
Assets to Buyer, Buyer agrees to assume, as of the Closing, the future payment
and performance of the following liabilities (the "ASSUMED LIABILITIES") of the
Seller Entities:

(a) All trade accounts payable and accrued expenses of
Sellers in respect of the business of the Facilities existing as of the
Balance Sheet Date (hereinafter defined) but only if and to the extent
that the same are accrued or reserved for on the Balance Sheet Date and
remain unpaid and undischarged on the Closing Date, and all trade
accounts payable and accrued expenses of Sellers arising in the regular
and ordinary course of the business of the Facilities between the
Balance Sheet Date and the Closing Date, to the extent and that the
same remain unpaid and undischarged on the Closing Date and are accrued
or reserved for on the balance sheet as of the Closing Date and, with
respect to Balance Sheet Date payables and expenses and those accrued
subsequent thereto, as are included in the Working Capital (defined
below) calculation set forth in Section 1.5 hereof, exclusive of
prorations applicable to Sellers as set forth in Section 12.29;

(b) all obligations accruing after, and with respect to
the period after, the Closing with respect to the Contracts, including
the provider contracts (and numbers) between the Facilities and
Medicare, Medicaid, TRICARE or other third party payors;

(d) obligations and liabilities as of the Closing Date in
respect of accrued but unused paid time off (the "ACCRUED PTO") of
employees of the Sellers who are hired by Buyer as of the Closing Date,
all as set forth in (a) above, and employee sick time obligations as
set forth on Schedule 3.18.

Buyer shall not be liable for (i) any claims (other than the stated
Assumed Liabilities) arising from Sellers' assignment and Buyer's assumption of
the Assumed Liabilities; (ii) uncured defaults in the performance of the Assumed
Liabilities for periods prior to the Closing; (iii) unpaid amounts in respect of
the Assumed Liabilities that are due as of the Closing (which are not reflected
in Working Capital or on Schedule 3.18, as described in Section 1.3(d)) and/or
(iv) rights or remedies claimed by third parties under any of the Assumed
Liabilities which broaden or vary the rights and remedies such third parties
would have had against any of the Sellers if the sale and purchase of the Assets
were not to occur.

1.4. EXCLUDED LIABILITIES. Except for the Assumed Liabilities,
Buyer and Buyer Entities shall not assume and under no circumstances shall Buyer
or Buyer Entities be obligated to pay or assume, and none of the assets of Buyer
or Buyer Entities shall be or become liable for or subject to any liability,
indebtedness, commitment, or obligation of Sellers, or their respective
Affiliates, whether known or unknown, fixed or contingent, recorded or
unrecorded, currently

existing or hereafter arising or otherwise (collectively, the "EXCLUDED
LIABILITIES"), including, without limitation, the following Excluded
Liabilities:

(a) any debt, obligation, expense or liability that is
not an Assumed Liability;

(b) claims or potential claims for medical malpractice or
general liability relating to events asserted to have occurred prior
to the Closing;

(d) any liabilities or obligations associated with or
arising out of any of the Excluded Assets;

(e) liabilities and obligations of Sellers or their
respective Affiliates or predecessors, regardless of when imposed, in
respect of periods prior to the Closing Date arising under the terms of
the Medicare, Medicaid, TRICARE, Blue Cross, or other third party payor
programs (provided, however, that this clause (e) shall not apply to
any and all Assumed Liabilities under Section 1.3(a) hereof);

(f) federal, state or local tax liabilities or
obligations of Sellers or their respective Affiliates in respect of
periods prior to the Closing including, without limitation, any income
tax, any franchise tax, any tax recapture, any state and local
recording fees and taxes (excluding those contemplated in Section
12.29) which may arise upon the consummation of the transactions
contemplated herein (exclusive of any financing transactions engaged in
by Buyer or its Affiliates, which shall be the obligation of Buyer),
and any FICA, FUTA, workers' compensation, and any and all other taxes
or amounts due and payable as a result of the exercise by the employees
at the Facilities of any such employee's right to vacation, sick leave,
and holiday benefits accrued while in the employ of the Sellers or
their Affiliates (provided, however, that this clause (f) shall not
apply to any and all taxes payable with respect to any employee
benefits constituting Assumed Liabilities under Section 1.3(d) hereof);

(g) liability for any and all claims by or on behalf of
employees or independent contractors of Sellers or their respective
Affiliates relating to periods prior to the Closing including, without
limitation, liability for any pension, profit sharing, deferred
compensation, or any other employee health and welfare benefit plans,
liability for any EEOC claim, ADA claim, FMLA claim, wage and hour
claim, unemployment compensation claim, or workers' compensation claim,
and any liabilities or obligations to former employees of Sellers or
their respective Affiliates under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (provided, however, that this
clause (g) shall not apply to any and all employee benefits
constituting Assumed Liabilities under Section 1.3(d) hereof);

(h) any obligation or liability accruing, arising out of,
or relating to any federal, state or local investigations of, or claims
or actions against, Sellers or their respective Affiliates or
predecessors or any of their employees with respect to acts or
omissions prior

to the Closing;

(i) any civil or criminal obligation or liability
accruing, arising out of, or relating to any acts or omissions of
Sellers, any of their respective Affiliates or predecessors or their
directors, officers, employees and agents claimed to violate any
constitutional provision, statute, ordinance or other law, rule,
regulation, interpretation or order of any governmental entity;

(j) liabilities or obligations arising as a result of any
breach by Sellers or their respective Affiliates or predecessors at any
time of any contract or commitment that is not assumed by Buyer or
Buyer Entities;

(k) liabilities or obligations arising out of any breach
by Sellers or their respective Affiliates or predecessors of any
Contract, or amounts due and payable, accruing or occurring prior to,
or with respect to the period before, the Closing;

(l) any obligation or liability asserted under the
federal Xxxx-Xxxxxx program or other restricted grant and loan programs
with respect to the ownership or operation of the Facilities or the
Assets prior to the Closing;

(m) any debt, obligation, expense, or liability of
Sellers and their respective Affiliates or predecessors arising out of
or incurred solely as a result of any transaction of Sellers or their
respective Affiliates occurring after the Closing, or for any violation
by Sellers or their respective Affiliates or predecessors of any law,
regulation, or ordinance at any time (including, without limitation,
those pertaining to fraud, environmental, healthcare regulatory and
ERISA matters);

(n) all liabilities and obligations relating to an oral
agreements, oral contracts or oral understandings with any referral
sources including, but not limited to, physicians, unless reduced to
writing and expressly assumed as part of the Contracts (Sellers
expressly deny the existence of any such oral agreements, contract or
understandings);

(o) any liability associated with Mississippi
certificates of need #R-0077 and #R-0134; and

(p) any liability (other than any Assumed Liability)
arising out of the act of assignment by Sellers at the Closing of any
Contract.

1.5. PURCHASE PRICE. The purchase price for the Assets shall
consist of:

(a) FOURTEEN MILLION NINE HUNDRED SIXTY-ONE THOUSAND ONE
HUNDRED NINETY-FOUR DOLLARS ($14,961,194) payable in cash at closing
(subject to escrow allocation and subparagraph (b) below);

(b) the above consideration is subject to a dollar for
dollar adjustment to the extent Working Capital (as defined below)
exceeds or is less than $2,000,000 on a

consolidated basis with the Facilities acquired under the Other
Purchase Agreement. Buyer shall pay to Sellers an amount equal to the
difference between the estimated Working Capital and $2,000,000
provided the estimated amount exceeds $2,000,000, and in the event the
estimated Working capital is less than $2,000,000, the Buyer will
reduce the Purchase Price paid at Closing between this Agreement and
the Other Purchase Agreement as follows: each $1.00 of reduction -
$0.25 applicable to this Agreement and $0.75 to the Other Purchase
Agreement. "WORKING CAPITAL" is defined herein as Sellers' accounts
receivable (inclusive of rights as set forth in Section 1.1(f)) plus
inventories plus other current assets, transferred to Buyer or Buyer
Entities, less accounts payable and accrued expenses, assumed by Buyer
and/or Buyer Entities, all as set forth on the consolidated balance
sheet of the Sellers and the Sellers under the Other Purchase Agreement
as of the Closing Date;

(c) in addition, for each dollar of earnings before
interest, taxes, depreciation and amortization, as calculated in
accordance with generally accepted accounting principles and consistent
with past practice ("EBITDA"), earned by the Facilities and the
Facilities under the Other Purchase Agreement (collectively) on a
consolidated basis for the year ended December 31, 2004 in excess of
$4,500,000, Sellers shall earn an additional ten dollars ($10), up to
maximum earnout consideration of $5,000,000. As an example, if the
Facilities and the Facilities under the Other Purchase Agreement
collectively generate 2004 EBITDA of $4,800,000, Sellers shall receive
an additional payment of $3,000,000. Notwithstanding any provision
herein or in the Other Purchase Agreement, the maximum aggregate
earnout payments under this Agreement and the Other Purchase Agreement
shall be $5,000,000. The parties hereto agree that EBIDA will be
adjusted for prior year cost report settlements or prior year rate
adjustments for services rendered prior to January 1, 2004, and to
include expenses related to consulting agreements entered into as part
of this Agreement. The parties hereto agree that Buyer's or its
affiliate's (i) intracompany management fees charged to the Facilities;
(ii) rent for the Real Estate; and (iii) executive office overhead,
administrative and management salaries and expenses (exclusive of
operating expenses set forth in the following sentence) allocated to
the Facilities, shall not be deducted as expenses in determining the
Facilities EBITDA. Operating costs which are incurred at Buyer's parent
level for the benefit of the Facilities and allocated to the Facilities
and other hospital facilities operated by Buyer or its affiliates and
subsidiaries, may be charged as expenses of the Facilities insofar as
the allocation is fair and equitable, consistent with past practices at
the Facilities and in accordance with GAAP, and based upon a reasonable
methodology which does not discriminate against the Facilities.

The calculation of 2004 EBITDA shall be prepared by Buyer and
shall be presented to Sellers within 90 days of the end of the calendar
year 2004. Sellers, acting through the seller representative Xxxxxxx X.
Xxxxxxx (or his designee) (the "SELLER REPRESENTATIVE"), will have
thirty (30) calendar days to accept or protest the calculation of 2004
EBITDA. If the Seller Representative, on behalf of the Sellers,
protests the calculation, the parties hereto shall use their good faith
efforts to seek to resolve such protest within 30 calendar days. Upon
agreement, if Sellers are entitled to all or a portion of the earnout
consideration pursuant to subparagraph (c) above, Buyer will make

payment pursuant to subparagraph (c) above within five (5) business
days of receipt of written acknowledgement of the calculation by the
Seller Representative. If the parties do not agree upon a calculation
of 2004 EBITDA following the 30 day period, the parties shall mutually
select an accounting firm of national recognition, which shall not be
the accounting firm of record for Buyer or Sellers (or their respective
affiliates), which shall calculate the 2004 EBITDA and such calculation
shall be binding on all parties hereto. By way of example only, the
parties hereto agree with the 2003 EBITDA methodology and calculation
as set forth on Schedule 1.5(c).

Collectively, the net payments of (a), (b) and (c) above shall constitute the
"PURCHASE PRICE". Buyer shall pay the Purchase Price (with respect to
subparagraph (a) and subparagraph (b) (subject to the post closing adjustment
provided for in Section 1.6 hereof) to Sellers at the Closing by wire transfer
of immediately available funds to an account designated by Sellers. The Buyer or
Sellers shall make such payment adjustment as contemplated in subparagraph (b)
above in accordance with Section 1.6 (which adjustment shall increase the
Purchase Price if paid by Buyer and shall reduce the Purchase Price if paid by
Sellers). The Buyer will pay the Purchase Price with respect to subparagraph
(c), as applicable, to Sellers by wire transfer of immediately available funds
to an account designated by Sellers at such time as set forth in subparagraph
(c).

At the Closing, $550,000 of the Purchase Price shall be paid by wire
transfer into escrow at AmSouth Bank, N.A., pursuant to the terms of the Escrow
Agreement in substantially the form set forth as Exhibit C hereto (subject to
review and comment by the Escrow Agent).

1.6. CALCULATION OF WORKING CAPITAL. Not less than seven (7) days
prior to Closing, Sellers shall prepare and provide to Buyer a certificate
setting forth an estimate of the anticipated Closing Date Working Capital. Buyer
shall have five (5) days to review and confirm the basis for Sellers' estimated
Closing Date Working Capital. Sellers' calculation of the estimated Closing Date
Working Capital shall be made in good faith and in a manner consistent with the
calculation of Working Capital as of December 31, 2003 attached hereto as
Schedule 1.6.

Not later than sixty (60) days after the Closing Date, Sellers shall
cause to be prepared the consolidated balance sheet of Sellers as of the Closing
Date (such balance sheet being referred to as the "CLOSING BALANCE SHEET"), in
accordance with generally accepted accounting principles consistently applied by
Sellers in accordance with past practice for the financial statements described
in Section 3.4 hereof. Such Closing Balance Sheet shall specifically identify
any assets reflected thereon which are not included in the Assets and all
liabilities reflected thereon which are not assumed by Buyer hereunder.

Sellers shall cause an independent public accounting firm selected by
Sellers (with the consent of Buyer, such consent not to be unreasonably
withheld), to review such Closing Balance Sheet and to issue, as soon as
practicable but in any event not later than sixty (60) days after the Closing
Date, an agreed procedures report to Sellers and Buyer as to the calculation of
Working Capital transferred to Buyer or the Buyer Entities; provided that such
accounting firm's report will not require the audit of Sellers' accounts for
such purpose. Sellers will permit Buyer and/or Buyer's auditor (or other
accounting firm as designated by the Buyer) at the earliest practicable

date to review the certificate, including all work papers, schedules and
calculations related thereto, prior to the issuance thereof.

Any dispute which may arise between Sellers and Buyer as to the Working
Capital calculation shall be resolved in the following manner:

(a) Buyer, if it disputes the calculation of Working
Capital, shall notify Sellers in writing within thirty (30) days after
the issuance of the certificate pursuant hereto that Buyer disputes the
calculation of Working Capital, and such notice shall specify in
reasonable detail the nature of the dispute;

(b) during the 30-day period following the date of such
written notice for Buyer, Sellers and Buyer shall attempt in good faith
to resolve such dispute; and

(c) if, at the end of the 30-day period specified in
subsection (b) above, Sellers and Buyer shall have failed to reach an
agreement with respect to such dispute, the matter shall be referred to
PricewaterhouseCoopers, independent certified public accountants, which
shall act as an expert and shall issue its certificate as to the
calculation of Working Capital within sixty (60) days after such
dispute is referred thereto. Each of the parties hereto shall bear all
costs and expenses incurred by it in connection with such third party
review, except that the fees and expenses of PricewaterhouseCoopers
hereunder shall be borne equally by Sellers and Buyer. This provision
shall be specifically enforceable by the parties, the decision of
PricewaterhouseCoopers in accordance with the provisions hereof shall
be final and binding and there shall be no right to appeal therefrom.

Upon agreement (or calculation as set forth in subparagraph (c) above) as to the
Closing Date Working Capital: (i) to the extent the Closing Date Working Capital
exceeded the estimated Closing Date Working Capital, Buyer shall promptly pay
(within five (5) days) to Seller's account such additional amount and (ii) to
the extent the Closing Date Working Capital is less than the estimated Closing
Date Working Capital, Seller shall promptly pay (within five (5) days) to Buyer
such amount equal to the difference between the Closing Date Working Capital and
the estimated Closing Date Working Capital.

ARTICLE 2.
CLOSING

2.1. CLOSING. Subject to the satisfaction or waiver by the
appropriate party of all of the conditions precedent to Closing specified in
Articles 7 and 8 hereof, the consummation of the transactions contemplated by
and described in this Agreement (the "CLOSING") shall take place at the offices
of Davidson, Xxxxx & Xxxxxxx, Suite 800, 509 Market Street, Shreveport,
Louisiana, at 10:00 a.m. local time, on or before March 1, 2004, or on such
other date or at such other location as the parties may mutually designate in
writing (the date of consummation is referred to herein as the "CLOSING DATE").
Closing shall be effective as set forth in Section 12.21.

2.2. ACTIONS OF SELLERS AT CLOSING. At the Closing and unless
otherwise waived in writing by Buyer, Sellers shall deliver to Buyer the
following:

(a) Deeds containing special warranty of title, fully
executed by appropriate Sellers in recordable form, conveying to Buyer
good and marketable fee title to the Real Property described in
Schedule 1.1(a), and/or Assignments, fully executed by Sellers or one
of its Affiliates in recordable form, assigning to Buyer good and valid
leasehold title to any Real Property which is a leasehold estate,
subject in each instance only to the Permitted Encumbrances;

(b) A General Assignment, Conveyance and Xxxx of Sale,
containing special warranty of title, fully executed by each Seller,
conveying to Buyer good and marketable title to all tangible assets
which are a part of the Assets and valid title to all intangible assets
which are a part of the Assets, free and clear of all liabilities,
claims, liens, security interests and restrictions other than the
Assumed Liabilities;

(c) An Assignment and Assumption Agreement (the
"ASSIGNMENT AND ASSUMPTION AGREEMENT"), fully executed by each Seller,
conveying to Buyer such Seller's interest in the Contracts;

(d) Copies of resolutions duly adopted by the Board of
Directors and/or member(s) and shareholders of each of the Sellers,
authorizing and approving their respective performance of the
transactions contemplated hereby and the execution and delivery of this
Agreement and the documents described herein, certified as true and of
full force as of the Closing, by the appropriate officers of each
Seller;

(e) Certificates of the President or Managing Member of
each Seller, certifying that each covenant and agreement of such
Seller, respectively, to be performed prior to or as of the Closing
pursuant to this Agreement has been performed and each representation
and warranty of each Seller is true and correct, as if made on and as
of the Closing;

(f) Certificates of incumbency for the respective
officers of each Seller executing this Agreement and any other
agreements or instruments contemplated herein or making certifications
for the Closing dated as of the Closing Date;

(g) Certificates of existence and good standing of each
Seller from the state in which it is incorporated, dated the most
recent practical date prior to the Closing;

(h) The opinion of counsel to Sellers as provided by
Section 7.7 hereof;

(i) All original Contracts, all Certificates of Title and
other documents evidencing an ownership interest conveyed as part of
the Assets;

(j) The duly executed guaranty agreement by one or more
Sellers or designees as set forth in Section 9.10 hereof on such terms
and conditions as substantially set forth in the form of guaranty
agreement attached hereto as Exhibit H; and

(k) Such other instruments and documents as Buyer
reasonably deems necessary to effect the transactions contemplated
hereby.

2.3. ACTIONS OF BUYER AT CLOSING. At the Closing and unless
otherwise waived in writing by Sellers, Buyer shall deliver to Sellers the
following:

(a) An amount equal to the Purchase Price contemplated by
subparagraphs (a) and (b) (prior to the post closing adjustment) of
Section 1.5 hereof in immediately available funds;

(b) The Assignment and Assumption Agreement, fully
executed by Buyer or Buyer Entities, pursuant to which Buyer or one or
more Buyer Entities shall assume the future performance of the
Contracts as to the period after Closing, as herein provided;

(c) Copies of resolutions duly adopted by the Board of
Directors of Buyer authorizing and approving its performance of the
transactions contemplated hereby and the execution and delivery of this
Agreement and the documents described herein, certified as true and in
full force as of the Closing, by the appropriate officers of Buyer;

(d) Certificates of the President or a Vice President of
Buyer, certifying that each covenant and agreement of Buyer to be
performed prior to or as of the Closing pursuant to this Agreement has
been performed and each representation and warranty of Buyer is true
and correct, as if made on and as of the Closing;

(e) Certificates of incumbency for the respective
officers of Buyer executing this Agreement or making certifications for
the Closing dated as of the Closing Date;

(f) Certificate of existence and good standing of Buyer
from the state in which it is incorporated, dated the most recent
practical date prior to Closing;

(g) The opinion of counsel to Buyer as provided by
Section 8.5 hereof;

(h) The duly executed guaranty agreement by Buyer (or a
Buyer entity) in substantially the form of Exhibit H; and

(i) Such other instruments and documents as Sellers
reasonably deem necessary to effect the transactions contemplated
hereby.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SELLERS

As of the date hereof, and, subject to such qualifications and
exceptions as set forth in the Schedules (which have been updated in accordance
with the provisions of Section 12.1 hereof, as of the Closing Date), Sellers
represent and warrant to Buyer the following:

3.1. EXISTENCE AND CAPACITY. Each Seller is a limited liability
company or

corporation, duly organized and validly existing in good standing under the laws
of its state of organization. Each of Sellers has the requisite power and
authority to enter into this Agreement and to perform its obligations hereunder.
Each Seller has the requisite power and authority to conduct its business as it
is now being conducted.

3.2. POWERS; GOVERNMENTAL CONSENTS; ABSENCE OF CONFLICTS WITH OTHER
AGREEMENTS, ETC. The execution, delivery, and performance of this Agreement by
Sellers and all other agreements referenced herein, or ancillary hereto, to
which Sellers are a party, and the consummation by the Sellers of the
transactions contemplated by this Agreement and the documents described herein,
as applicable:

(a) are within its limited liability company or corporate
powers, respectively, subject to compliance with Section 5.4 are not in
contravention of law or of the terms of its organizational documents,
and have been duly authorized by all appropriate limited liability
company or corporate action;

(b) except as provided in Section 5.4 below or as set
forth on Schedule 3.2, do not require any approval or consent of, or
filing with, any governmental agency or authority bearing on the
validity of this Agreement which is required by law or the regulations
of any such agency or authority;

(c) except as set forth on Schedule 3.2, will neither
violate, nor result in any breach of, or the creation of any material
lien, charge, or encumbrance under, any indenture, agreement, lease,
instrument or understanding to which it is a party or by which it is
bound;

(d) subject to compliance with Section 5.4, will not
violate any statute, law, rule, or regulation of any governmental
authority to which it or the Assets may be subject; and

(e) will not violate any judgment, decree, writ or
injunction of any court or governmental authority to which it or the
Assets may be subject.

3.3. BINDING AGREEMENT. This Agreement and all agreements to which
Sellers or any of their Affiliates will become a party pursuant hereto are and
will constitute the valid and legally binding obligations of such party and are
and will be enforceable against it in accordance with the respective terms
hereof or thereof, except insofar as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors rights generally and general principles of equity.

3.4. FINANCIAL STATEMENTS. Sellers delivered to Buyer copies of the
following consolidated financial statements of or pertaining to the Facilities
("FINANCIAL STATEMENTS"), which Financial Statements are maintained on an
accrual basis, and copies of which are attached hereto as Schedule 3.4:

(a) Unaudited Consolidated Balance Sheet dated as of
December 31, 2003 (the "BALANCE SHEET DATE");

(b) Unaudited Consolidated Income Statement for the 12
months ended on the Balance Sheet Date; and

Such Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated ("GAAP"), except as set forth in Schedule 3.4 and the absence
(or lack of GAAP compliance) of footnotes to such statements. Such Balance
Sheets present fairly in all material respects the financial condition of the
Facilities as of the dates indicated thereon, and such Income Statements present
fairly in all material respects the results of operations of the Facilities for
the periods indicated thereon. Except for (i) liabilities that are disclosed in
this Agreement, agreements entered into in connection herewith and Schedules and
Exhibits hereto and thereto, and (ii) liabilities that were incurred after the
Balance Sheet Date in the ordinary course of business, as of the date hereof,
there are no liabilities of the Sellers or their Affiliates relating to the
Facilities or the other Assets and Assumed Liabilities required in accordance
with GAAP to be disclosed on the Financial Statements, except as set forth in
the Financial Statements or, as otherwise specified on Schedule 3.4.

3.5. CERTAIN POST-BALANCE SHEET RESULTS. Except as set forth in
Schedule 3.5 hereto, since the Balance Sheet Date there has not been any:

(a) damage, destruction, or loss in excess of $25,000
(whether or not covered by insurance) affecting the Facilities or the
Assets;

(b) material adverse changes in the condition, financial
or otherwise, of the Assets, the business of, or in the results of
operations of, the Facilities;

(d) sale, assignment, transfer, or disposition of any
item of property, plant or equipment included in the Assets having a
book value in excess of $5,000 (other than supplies), except in the
ordinary course of business consistent with past practices of Sellers;

(e) increases in the compensation payable to any
employees of the Facilities or any increase in, or institution of, any
bonus, insurance, pension, profit-sharing or other employee benefit
plan, remuneration or arrangements made to, for or with such employees
(other than in the ordinary course of business consistent with Sellers'
past practices);

(f) dividends, distributions or extraordinary payments by
any Seller;

(g) changes in the composition of the medical staff of
the Facilities, other than normal turnover occurring in the ordinary
course of business consistent with Sellers' past practices;

(h) changes in the rates charged by the Facilities for
their services, other than those made in the ordinary course of
business consistent with Sellers' past practices;

(i) material adjustments or write-offs of accounts
receivable or reductions in reserves for accounts receivable outside
the ordinary course of business consistent with Sellers' past
practices;

(j) changes in the accounting methods or practices
employed by Sellers or changes in depreciation or amortization
policies;

(k) transaction pertaining to the Facilities by any Seller
outside the ordinary course of business consistent with each Seller's
past practices; or

(l) institution or settlements of any litigation,
investigation, audit, inquiry, action or proceeding before or involving
any court or governmental body relating to any of the Sellers, their
business or the Assets.

3.6. LICENSES. The Facilities are duly licensed as required
pursuant to the applicable laws of the state in which it is located with each
such license set forth on Schedule 3.6. The ancillary departments located at the
Facilities or operated for the benefit of the Facilities which are required to
be specially licensed are duly licensed by the appropriate state agency (the
"STATE HEALTH AGENCY"). The Sellers have all other licenses, registrations,
permits, and approvals which are needed or required by law to operate the
business related to or affecting the Facilities or any ancillary services
related thereto. Sellers have delivered to Buyer an accurate list and summary
description (Schedule 3.6) of all such licenses, registrations and permits held
by the Sellers relating to the ownership, development, or operation of the
Facilities or the Assets, all of which are now and as of the Closing shall be in
good standing.

3.7. CERTIFICATES OF NEED. Except as set forth on Schedule 3.7
hereto, no application for any Certificate of Need, Exemption Certificate (each
as defined below) or declaratory ruling has been made by any Seller with the
State Health Agency or other applicable agency which is currently pending or
open before such agency, and no such application (collectively, the
"APPLICATIONS") filed by any Seller within the past three (3) years has been
ultimately denied by any commission, board or agency or withdrawn by any Seller.
Except as set forth on Schedule 3.7 hereto, no Seller has prepared, filed,
supported or presented opposition to any Applications filed by another hospital
or health agency within the past three (3) years. Except as set forth on
Schedule 3.7 hereto, no Seller has any Applications pending or any approved
Applications which relate to projects not yet completed. Each Seller has
properly filed all required Applications which are complete and correct in all
material respects with respect to any and all material improvements, projects,
changes in services, zoning requirements, construction and equipment purchases,
and other changes for which approval is required under any applicable federal or
state law, rule or regulation. As used herein, "CERTIFICATE OF NEED" means a
written statement issued

by the State Health Agency evidencing community need for a new, converted,
expanded or otherwise significantly modified health care facility, health
service or hospice, and "EXEMPTION CERTIFICATE" means a written statement from
the State Health Agency stating that a health care project is not subject to the
Certificate of Need requirements under applicable state law.

3.8. MEDICARE PARTICIPATION; ACCREDITATION. Each Facility
participating in the Medicare Program, one or more Medicaid programs or the
TRICARE program is set forth on Schedule 3.8. Each such Facility has a current
and valid provider contract with the programs as set forth on Schedule 3.8, and
is in compliance with the conditions of participation in such programs, if
applicable, and has received all approvals or qualifications necessary for
capital reimbursement for the Facilities. Each Facility is duly accredited, with
no contingencies (except as set forth on Schedule 3.8), by the Joint Commission
on Accreditation of Healthcare Organizations ("JCAHO") for the three (3) year
period set forth on Schedule 3.8. A copy of the most recent accreditation letter
from the JCAHO pertaining to each Facility has been made available to Buyer. All
billing practices of the Sellers with respect to the Facilities to all third
party payors, including the Medicare, Medicaid and TRICARE programs and private
insurance and managed care companies, have been in compliance with all
applicable laws, regulations and policies of such third party payors and the
Medicare, Medicaid and TRICARE programs and none of the Sellers nor the
Facilities have billed or received any payment or reimbursement in excess of
amounts allowed by law. No Seller nor any of their respective officers,
directors, managing employees, or controlling members are excluded from
participation in the Medicare, Medicaid or TRICARE programs, nor, to the
knowledge of Sellers, is any such exclusion threatened. Except as set forth on
Schedule 3.8, no Seller has received any written notice from any of the
Medicare, Medicaid or TRICARE programs, or any other third party payor programs
of any pending or threatened investigations or surveys.

3.9. REGULATORY COMPLIANCE. Except as set forth on Schedule 3.9
hereto, the Facilities are in compliance in all material respects with all
applicable statutes, rules, regulations, and requirements of the Government
Entities having jurisdiction over the Facilities and the operations of the
Facilities or their related ancillary services. As used herein, "GOVERNMENT
ENTITY" means any government or any agency, bureau, board, directorate,
commission, court, department, official, political subdivision, tribunal or
other instrumentality of any government, whether federal, state or local. Except
as set forth on Schedule 3.9, the Sellers have timely filed all reports, data,
and other information required to be filed with the Government Entities. None of
the Sellers nor any of their officers, members, directors, agents or employees,
has committed a violation of federal or state laws regulating health care fraud,
including but not limited to the federal Xxxx-Xxxxxxxx Xxx, 00 X.X.X. 0000x-0x;
the Xxxxx I and II Laws, 42 U.S.C. 1395nn, as amended, and their associated
regulations; and the False Claims Act, 31 U.S.C. 3729, et seq.

3.10. EQUIPMENT. Sellers have delivered to Buyer an accurate and
complete depreciation schedule as of the Balance Sheet Date (Schedule 3.10)
which takes into consideration all the material equipment associated with, or
constituting any part of, the Facilities and the Assets. Since the Balance Sheet
Date, no Seller has sold or otherwise disposed of any item of equipment having a
value in excess of $500 associated with, or constituting any part of, the
Facilities or the Assets.

3.11. REAL PROPERTY. Xxxxxx-Xxxxxxx of Mississippi, LLC owns good,
marketable, and insurable fee simple title, as the case may be, to the Real
Property, together with all buildings, improvements, and component parts thereon
and all appurtenances and rights thereto. The Real Property will be conveyed to
Buyer free and clear of any and all liens, encumbrances or other restrictions
except those more particularly described in Schedule 1.1(a) hereto, usual and
customary utility and street easements or rights of way which do not materially
interfere with the use and enjoyment of the Real Property by Sellers, and such
other matters as may be approved by Buyer (the "PERMITTED ENCUMBRANCES"). With
respect to the Real Property:

(a) No Seller has received notice from any Governmental
Entity of a violation of any applicable ordinance or other law, order
or regulation, and no Seller has received notice of any condemnation,
lien, assessment, or the like relating to any part of the Real Property
or the operation thereof;

(b) To the Knowledge of Sellers, the Real Property and
its operation are in compliance with all applicable zoning, land use,
public health, fire safety, building code or other similar laws,
ordinances and regulations applicable thereto or to the ownership or
operation thereof. The consummation of the transactions contemplated
herein will not result in a violation of any applicable zoning
ordinance or the termination of any applicable zoning variance,
conditional use permit or waiver now existing, and the buildings and
improvements constituting the Real Property comply in all material
respects with all public health, fire safety or building codes and
regulations;

(c) To the Knowledge of Sellers, the Real Property is
subject to no easements, restrictions, ordinances, or such other
limitations on title so as to make such property unusable for its
current use or the title uninsurable or unmarketable or which restrict
or impair the use, marketability or insurability of the Real Property;

(d) All of the Real Property is in compliance in all
material respects with the applicable provisions of the Rehabilitation
Act of 1973, Title III of the Americans with Disabilities Act, and the
provisions of any comparable state statute relative to accessibility
(these laws are referred to, collectively, as the "ACCESSIBILITY
LAWS"), and there is no pending or noticed, or to the knowledge of any
Seller, threatened litigation, administrative action or complaint
(whether from state, federal or local government or from any other
person, group or entity) relating to compliance of any of the Real
Property with the Accessibility Laws;

(e) Except for patients, there are no tenants or other
persons or entities occupying any space in the Real Property, other
than pursuant to tenant leases described in Schedule 1.1(a) or (i) or
listed as an Excluded Asset/Excluded Liability or, to the knowledge of
any Seller, claiming any possession, adverse or not, to or other
interest in any portion of the Real Property;

(f) None of the Sellers have received, during the past
five (5) years, any written notice from any Governmental Entity of,
and, to the knowledge of any Seller, no part of the Real Property is
subject to, any existing, proposed or contemplated plans to

modify or realign any street or highway or any existing, proposed or
contemplated eminent domain proceeding that would result in the taking
of all or any part of the Real Property or that would adversely affect
the current use of any part of the Real Property. There are no existing
or to any Seller's knowledge contemplated public improvements which may
result in special assessments against the Real Property;

(g) Except as set forth on Schedule 3.11(g), final
permanent and unconditional certificates of occupancy and/or use have
been duly issued by the applicable governmental authority having
jurisdiction for all buildings located on the Real Property;

(h) All utilities serving the Real Property are installed
and operating, and shall at Closing be adequate to operate the Real
Property in the manner it is currently operated. Any tap fees, hook-up
fees or other associated charges accrued to date have been fully paid
with respect to all potable and industrial water and all gas,
electrical, steam, compressed air, telecommunication, sanitary and
storm sewage lines and systems and other similar systems serving the
Facilities and the Assets;

(i) To the Knowledge of Sellers, no portion of the Real
Property constitutes wetlands, no portion lies within any designated
flood plain area except as indicated on the Survey for such Real
Property, and no portion of the Real Property has been or is used as a
cemetery, burial ground or other site for the interment, burial or
location of the remains of any deceased person or persons;

(j) To the Knowledge of Sellers, there are no outstanding
options to purchase, rights of first offer, rights of first refusal or
any similar rights to purchase any parcel of the Real Property, or any
portion thereof or interest therein that have been granted or created
by any Seller;

(k) Schedules 1.1(a), 1.1(i), 1.2 and 1.4 collectively
set forth an accurate and complete list of all of the leases of the
Real Property pursuant to which a Seller is lessee or lessor (the "REAL
PROPERTY LEASES"). Sellers have provided the Buyer accurate and
complete copies of all Real Property Leases. Except as set forth in
Schedule 1.1(i), no Seller is a lessee from a non-affiliated third
party of any real property used in, or necessary or intended for the
operation of the Facilities or the Assets to be transferred to Buyer;
and

(l) Any division of the Real Property by Sellers has been
done in full compliance with all subdivision and zoning or other land
use laws, regulations, ordinances or requirements. The consummation of
the Closing, the sale of the Real Property, and the transactions
contemplated by this Agreement (i) do not require the filing of any
subdivision plats, and (ii) will not cause any portion of the Real
Property to be in violation of any applicable subdivision, zoning,
historic district, fire safety and other land use laws, regulations,
ordinances and requirements. If the conveyances of the Real Property
contemplated by this transaction require the approval and filing of any
subdivision plats or taking of any other actions under any such land
use laws, ordinances, regulations or requirements, Sellers will obtain
all such approvals, make such filings or take all such

actions as may be necessary or required thereunder in order to permit
or allow the conveyance of the Real Property contemplated by this
transaction to be accomplished; and

(m) Except as set forth in Schedule 1.1(a) or (i): (1) no
Seller has received any notice of any default, offset, counterclaim or
defense under any of the Real Property Leases; (2) to the knowledge of
the Sellers, the lessors named in the respective Real Property Leases
are the fee owners of the Real Property leased thereunder; (3) except
as set forth in each Real Property Lease, none of the Real Property
Leases under which a Seller is the lessor is subject to any option to
renew, options to purchase, rights of first refusal, rights of first
offer or any similar rights; (4) as to any of the Real Property Leases
under which a Seller is the lessor, no tenant is entitled to any
rebate, concession or free rent, other than as set forth in the lease
or contract with such tenant; no commitments have been made to any
tenant for repairs or improvements other than for normal repairs and
maintenance in the future; and no rents due under any leases with
tenants have been assigned or hypothecated to, or encumbered by, any
person; and (5) no Seller is in material breach or default under any
Real Property Lease.

3.12. TITLE. As of the Closing, the Sellers shall own and hold good,
valid and marketable title to all of the Assets, and at the Closing the Sellers
will assign and convey to Buyer good, valid and marketable title to all of the
Assets, or any part thereof, subject to no mortgage, lien, pledge, security
interest, conditional sales agreement, right of first refusal, option,
restriction, liability, encumbrance, or charge other than the Permitted
Encumbrances or the Assumed Liabilities.

3.13. EMPLOYEE BENEFIT PLANS. Except as set forth on Schedule 3.13
hereto, the Sellers do not presently maintain or contribute to, nor have the
Sellers maintained or contributed to within the last three (3) years, any
pension, profit sharing, deferred compensation, bonus, fringe benefit, stock
option, severance, layoff, life insurance, disability, vacation, holiday, or
other employee pension or health or welfare benefit plan or arrangement. All
employee pension benefit plans and employee health or welfare benefits plans
maintained or contributed to by the Sellers (collectively "BENEFIT PLANS") have
been administered in compliance in all material respects with all applicable
laws including, without limitation, the applicable provisions of the Internal
Revenue Code of 1986, as amended (the "CODE"), and the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). To the Knowledge of Sellers,
there are no "accumulated funding deficiencies" within the meaning of the Code.
To the Knowledge of Sellers, no reportable events (within the meaning of ERISA)
or prohibited transactions (within the meaning of the Code and ERISA) have
occurred. There are no pending or, to the knowledge of Sellers, threatened
claims by or on behalf of the Benefit Plans or by any employee of the Sellers
alleging a breach or breaches of fiduciary duties or violations of other
applicable state or federal law which could result in material liability on the
part of either of the Sellers or the Benefit Plans under any law. Except as set
forth on Schedule 3.13 hereto, during the past three (3) years all material
returns, reports, disclosure statements, and premium payments required to be
made under the Code or ERISA with respect to the Benefit Plans have been timely
filed or delivered. Except as described in Schedule 3.13 hereto, the Benefit
Plans have not been audited or, to the knowledge of Sellers, investigated by the
Internal Revenue Service, the Department of Labor or the Pension Benefit

Guaranty Corporation within the last three (3) years, and, to the knowledge of
Sellers, there are no outstanding issues with reference to the Benefit Plans
pending before any governmental agency.

3.14. LITIGATION OR PROCEEDINGS. Sellers have delivered to Buyer an
accurate list and summary description (Schedule 3.14) of all current litigation
or proceedings with respect to the Facilities and the Assets. Sellers are not in
default under any law or regulation material to the operation of the Facilities
or the Assets, or under any order of any court or federal, state, municipal, or
other governmental department, commission, board, bureau, agency or
instrumentality wherever located. Except to the extent set forth on Schedule
3.14, there are no claims, actions, suits, proceedings, or investigations
pending, or to the knowledge of any Seller, threatened against or related to the
Sellers, the Facilities or the Assets, at law or in equity, or before or by any
federal, state, municipal, or other governmental department, commission, board,
bureau, agency, or instrumentality wherever located.

3.15. ENVIRONMENTAL LAWS. Except as set forth on Schedule 3.15
hereto, (i) no Seller has received any notice of any claim or potential claim
relating the presence of any Hazardous Materials (as defined below) or pursuant
to any Environmental Laws (as defined below), and (ii) no Seller is in violation
of any federal, state or local statutes, regulations, laws or orders pertaining
to human health, safety or the environment ("ENVIRONMENTAL LAWS"), including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA")
and any other federal, state or local staute, regulation, law or order
pertaining to the handling of Hazardous Materials (as defined below). Sellers
are in possession of all material permits, licenses, registrations,
identification numbers and other governmental authorizations required under
applicable Environmental Laws ("ENVIRONMENTAL PERMITS"), and all such
Environmental Permits are current and Sellers are in material compliance with
all terms and conditions therein. No "HAZARDOUS MATERIALS" (which for purposes
of this Section 3.15 shall mean and include polychlorinated biphenyls, asbestos,
petroleum or any constituent thereof, radioactive materials, medical or
infectious wastes, mold, mildew or fungus, and any substances, constituents,
pollutants, contaminants, wastes, or other materials which are included under or
regulated by any Environmental Laws) have been, and through the Closing Date
will be, manufactured, stored, generated, handled, or otherwise are present at
the Facilities or on the Real Property in violation of any applicable
Environmental Law or in a manner that creates a potential adverse effect upon
human health. None of the Sellers, nor to any Seller's knowledge, any prior
owners, operators or occupants of the Real Property, have allowed the discharge
or Release (as defined under CERCLA) of any Hazardous Materials on, under, in or
from the Real Property or at the Facilities, and the Sellers, and to the
knowledge of the Sellers any prior owners, operators or occupants of the Real
Property, have complied in all material respects with all applicable
Environmental Laws. Except as set forth on Schedule 3.15 hereto, (i) none of the
Sellers nor their Affiliates has received any written notice, or to Sellers'
knowledge other notice, that alleges that any Seller, the Facilities or any
other Asset transferred to Buyer, is not or was not in material compliance with
all applicable Environmental Laws; (ii) none of the Real Property, nor Sellers,
their Affiliates, nor, to Sellers' knowledge, any present owner or operator of
the Real Property is subject to any pending or threatened investigation or
inquiry by any governmental authority, or any remedial or removal obligations
under any applicable Environmental Laws nor, to Sellers' knowledge, is there any
basis for any such investigation, inquiry or obligation; and (iii) to Sellers'
knowledge, no material

amount of work, repairs, remedy, construction or capital expenditures are
required by any Environmental Laws with respect to the Real Property or the
Facilities in order for the continued lawful use of the Real Property or the
Facilities as they are currently being used. Sellers shall immediately notify
Buyer should Sellers become aware prior to Closing of any lien, notice,
litigation, or threat of litigation relating to any alleged Release of any
Hazardous Materials with respect to any part of the Real Property or the
Facilities. Except as set forth on Schedule 3.15 hereto, to the knowledge of
Sellers, the improvements on the Real Property do not contain friable asbestos
in any form. Without in any way limiting the generality of the foregoing and,
except as set forth on Schedule 3.15 hereto, (i) all current or former
underground storage tanks of which any Seller has knowledge and the capacity,
uses, dates of installation and contents of such tanks (if known to a Seller)
located on, in or under the Real Property are identified in Schedule 3.15; (ii)
the Sellers have not placed, and to Sellers' knowledge, no other person has
placed, collection dumps, pits, and disposal facilities or surface impoundments
for the disposal of Hazardous Substances (as defined under CERCLA) on, in or
under the Real Property except as identified in Schedule 3.15; (iii) all
underground storage tanks currently operated by a Seller are in compliance in
all material respects with the Environmental Laws; have passed tightness tests
in accordance with law within the last twelve (12) months; (iv) each Seller is
in material compliance with all OSHA requirements respecting friable asbestos or
Hazardous Materials; and (v) to each Seller's knowledge, (A) no petroleum
hydrocarbons have migrated on or below the surface of any of the Real Property,
(B) the Real Property and Facilities are free of dangerous levels of
naturally-emitted radon, and (C) no portion of the Real Property has ever been
used as a landfill, garbage or refuse dump site, waste disposal facility,
transfer station or other type of facility for the processing, treatment or
disposal of waste materials.

3.16. XXXX-XXXXXX AND OTHER LIENS. The transactions contemplated
hereby and the sale of the Facilities and the Assets to Buyer and Buyer Entities
will not result in any obligation of Buyer, Buyer Entities or any of their
respective Affiliates to repay any loans, grants or loan guarantees pursuant to
the Xxxx-Xxxxxx Act program, the Health Professions Educational Assistance Act,
the Nurse Training Act, the National Health Planning and Resources Development
Act, and the Community Mental Health Centers Act, as amended, or similar laws or
acts relating to healthcare facilities, nor subject Buyer, Buyer Entities or any
of their respective Affiliates or the Assets to any lien, restriction or
obligation, including any requirement to provide uncompensated care.

3.17. TAXES. Each of the Sellers and their Affiliates have filed all
federal, state and local tax returns required to be filed by them (all of which
are true and correct in all material respects) or have obtained valid extensions
of the time for filing same and have duly paid or made provision for the payment
of all taxes (including any interest or penalties and amounts due state
unemployment authorities) which are due and payable to the appropriate tax
authorities, except for amounts for which a Seller in good faith has a dispute
and for which adequate reserves are reflected on the Balance Sheet. The Sellers
and their Affiliates have withheld and paid to governmental entities proper and
accurate amounts from their independent contractors and employees in compliance
with all withholding and similar provisions of the Code, including (but not
limited to) employee withholding and social security taxes, and any and all
other applicable laws. No deficiencies for any of such taxes have been asserted,
or to Sellers' knowledge threatened, and no audit on any such returns is
currently under way or to Sellers' knowledge

threatened. Except as set forth on Schedule 3.17, there are no outstanding
agreements by any Seller for the extension of time for the assessment of any
such taxes. The Sellers and their Affiliates have not taken and will not take
any action in respect of any federal, state or local taxes (including, without
limitation, any withholdings required to be made in respect of employees) which,
to their knowledge, would have a material adverse effect upon the Facilities or
the Assets as of or subsequent to Closing. There are no tax liens on any of the
Assets and, to the knowledge of Sellers, no basis exists for the imposition of
any such liens. The Sellers have not assumed the tax liability of any person
under contract.

3.18. EMPLOYEE RELATIONS. Schedule 3.18 contains a list of all of
the employees of the Sellers at the Facilities, their current salary or wage
rates, bonus and other compensation for 2003, Accrued PTO and sick days, period
of service, department and job title, and whether such employees are part-time
or full-time. To the knowledge of Sellers, there is no threatened employee
strike, work stoppage, or labor dispute pertaining to such Facility. No union
representation question exists respecting any employees of a Seller. No
collective bargaining agreement exists or is currently being negotiated by any
Seller, no written demand has been made for recognition by a labor organization
by or with respect to any employees of a Seller, no union organizing activities
by or with respect to any employees of a Seller are, to the knowledge of
Sellers, taking place, and none of the employees of any Seller is represented by
any labor union or organization. There is no unfair labor practice claim against
a Seller pending before the National Labor Relations Board, nor any strike,
dispute, slowdown, or stoppage pending or, to the knowledge of the Sellers,
threatened against or involving the Facilities, and none has occurred within the
last five (5) years. Each of the Sellers is in compliance in all material
respects with all federal and state laws respecting employment and employment
practices, terms and conditions of employment, and wages and hours. The Sellers
are not engaged in any unfair labor practices. The Sellers have complied in all
material respects with all requirements of the Immigration and Reform and
Control Act of 1986. Except as set forth on Schedule 3.18, there are no pending
or, to the knowledge of Sellers, threatened EEOC claims, OSHA complaints, union
grievances, wage and hour claims, unemployment compensation claims, workers'
compensation claims or the like involving present employees of Sellers regarding
services at any of the Facilities.

3.19. AGREEMENTS AND COMMITMENTS. Except for the Contracts and
contracts included in the Excluded Assets, there are no commitments, contracts,
leases, and agreements (whether written or oral) which materially affect the
Facilities, the Assets, or the operation of any thereof, to which a Seller is a
party or by which a Seller, the Facilities, the Assets, or any portion thereof
is bound, including, without limitation:

(a) agreements with physicians or any other referral
sources,

(b) agreements with health maintenance organizations,
preferred provider organizations, or other alternative delivery
systems,

(d) employment contracts or any other contracts,
agreements, or commitments to or with individual employees or agents,

(e) contracts or commitments materially affecting
ownership of, title to, use of or any interest in real estate including
any tenant leases,

(f) equipment leases,

(g) equipment maintenance agreements,

(h) agreements with municipalities,

(i) collective bargaining agreements or other contracts
or commitments to or with any labor unions, labor organizations, or
other employee representatives or groups of employees,

(j) loan agreements, bonds, mortgages, liens, or other
security agreements,

(k) patent licensing agreements or any other agreements,
licenses, or commitments with respect to patents, patent applications,
trademarks, trade names, service marks, technical assistance,
copyrights, or other like terms affecting the Facilities or the Assets,

(l) contracts or commitments providing for payments based
in any manner on the revenues or profits of the Facilities or the
Assets,

(m) agreements, licenses, or commitments relating to data
processing programs, software, or source codes utilized in connection
with the Facilities or the Assets, and

(n) contracts or commitments, whether in the ordinary
course of business or not, which involve future payments, performance
of services or delivery of goods or material, to or by a Seller of any
amount or value in excess of Ten Thousand Dollars ($10,000) on an
annual basis.

3.20. CONTRACTS. Sellers have delivered to Buyer an accurate list
(Schedule 1.1(i)) of the Contracts. The Sellers have made available to Buyer
true and correct copies of the Contracts, and have given, and will give, the
agents, employees and representatives of Buyer access to the originals of the
Contracts. Sellers represent and warrant with respect to the Contracts that:

(a) The Contracts constitute valid and legally binding
obligations of one of the Sellers and are enforceable against such
Seller in accordance with their terms;

(b) Each Contract constitutes the entire agreement by and
between the respective parties thereto with respect to the subject
matter thereof;

(c) All obligations required to be performed by a Seller
under the terms of the Contracts have been performed, no act or
omission by a Seller has occurred or failed to occur which, with the
giving of notice, the lapse of time or both would constitute a default

under the Contracts, and each of such Contracts is now and will be upon
and after the Closing Date in full force and effect without default on
the part of a Seller;

(d) Except as expressly set forth on Schedule 1.1(i),
none of the Contracts requires consent to the assignment and assumption
of such Contracts by Buyer, and each Seller will use its reasonable
commercial efforts to obtain any required consents prior to the
Closing; and

(e) Except as expressly set forth on Schedule 1.1(i), the
assignment of the Contracts to and assumption of post-Closing
obligations (and any obligations contemplated by Section 1.3) under
such Contracts by Buyer will not result in any penalty or premium, or
variation of the rights, remedies, benefits or obligations of any party
thereunder.

3.21. SUPPLIES. Except as set forth on Schedule 3.21, all the
inventory and supplies constituting any part of the Assets are of a quality and
quantity usable and salable in the ordinary course of business of the
Facilities. Inventory and supplies are carried at the lower of cost or market,
on a first-in, first-out basis and are properly stated in the Financial
Statements. The inventory levels are based on past practices of the Sellers at
the Facilities.

3.22. INSURANCE. Sellers have delivered to Buyer an accurate
schedule (Schedule 3.22) disclosing the insurance policies covering the
ownership and operations of the Facilities and the Assets, which Schedule
reflects the policies' numbers, terms, identity of insurers, amounts, and
coverage. To the Knowledge of Sellers, all of such policies are in full force
and effect with no premium arrearage. Sellers have given in a timely manner to
their insurers all notices required to be given under its insurance policies
with respect to all claims and actions covered by insurance, and no insurer has
denied coverage of any such claims or actions. No Seller has (a) received any
notice or other communication from any such insurance company canceling or
materially amending any of such insurance policies, and, to the knowledge of
Sellers, no such cancellation or amendment is threatened or (b) failed to give
any required notice or present any claim which is still outstanding under any of
such policies with respect to the Facilities or any of the Assets.

3.23. THIRD PARTY PAYOR COST REPORTS. The Sellers have duly filed
all required cost reports for all the fiscal years through and including the
fiscal year ended December 31, 2002. All of such cost reports accurately reflect
the information required to be included thereon and such cost reports do not
claim and neither the Facilities nor the Sellers have received reimbursement in
any amount in excess of the amounts provided by law or any applicable agreement.
Schedule 3.23 indicates which of such cost reports have not been audited and
finally settled and a brief description of any and all notices of program
reimbursement, proposed or pending audit adjustments, disallowances, appeals of
disallowances, and any and all other unresolved claims or disputes in respect of
such cost reports. Sellers have established adequate reserves to cover any
potential reimbursement obligations that a Seller may have in respect of any
such third party cost reports, and such reserves are set forth in the Financial
Statements.

3.24. MEDICAL STAFF MATTERS. Sellers have provided to Buyer true,
correct, and complete copies of the bylaws and rules and regulations of the
medical staff of each Facility, if applicable, as well as a list of all current
members of the medical staff. Except as set forth on Schedule 3.24 hereto, there
are no adverse actions with respect to any medical staff members of the
Facilities or any applicant thereto for which a medical staff member or
applicant has requested a judicial review hearing which has not been scheduled
or has been scheduled but has not been completed, and there are no pending or,
to the knowledge of Sellers, threatened disputes with applicants, staff members,
or health professional affiliates, and all appeal periods in respect of any
medical staff member or applicant against whom an adverse action has been taken
have expired.

3.25. CONDITION OF ASSETS. The Assets and the Excluded Assets
constitute all assets which are held or used by the Sellers and necessary for
the conduct of the business and operation of the Facilities in the manner
conducted as of the date of this Agreement. All buildings, structures,
facilities, major equipment and other material items of tangible property and
assets included in the Assets are free from patent defects and in good operating
condition and repair, subject to ordinary wear and maintenance, and are usable
in the regular and ordinary course of business, and conform in all material
respects to all applicable laws, ordinances, codes, rules and regulations
relating to their use and operation by the Sellers; provided, however, that
Sellers' warranties of condition as to real estate improvements, systems and
Material Equipment (as defined in Section 6.2) are limited in accordance with
Section 6.2.

3.26. INTELLECTUAL PROPERTY; COMPUTER SOFTWARE. All trademarks,
service marks, trade names, patents, copyrights, inventions, processes and
applications therefor (whether registered or common law) currently owned or used
by the Sellers and Facilities are listed and described in Schedule 3.26
(collectively, the "INTELLECTUAL PROPERTY"). The Sellers have not licensed
anyone to use such Intellectual Property and Sellers have no knowledge of the
use or the infringement of any such Intellectual Property by any other person.
The Sellers own (or possess adequate and enforceable licenses or other rights to
use) all Intellectual Property, and all material computer software programs and
similar systems used in the conduct of their business.

3.27. ACCOUNTS RECEIVABLE. All accounts receivable and notes
receivable constituting a part of the Assets represent and constitute bona fide
indebtedness owing to the Sellers, respectively, for services actually performed
or for goods or supplies actually provided in the amounts indicated on the
Financial Statements with no known set-offs, deductions, compromises, or
reductions (other than reasonable allowances for uncollectibles and contractual
allowances based upon an evaluation of historical collections to gross
revenues). Sellers have made available to Buyer a complete and accurate aging
report of all such accounts receivable and a schedule of all accounts
receivable, whether recorded or unrecorded, which have been assigned to
collection agencies or are otherwise held or assigned for collection.

3.28. COMPLIANCE PROGRAM. Sellers have provided to Buyer a copy of
the current compliance program materials applicable to Sellers and the
Facilities. Except as set forth on Schedule 3.28, the Sellers (a) are not a
party to a Corporate Integrity Agreement with the Office of Inspector General of
the Department of Health and Human Services, (b) have no reporting obligations
pursuant to any Settlement Agreement entered into with any governmental entity,
(c) to each Seller's knowledge, have not been the subject of any government
payor program

investigation conducted by any federal or state enforcement agency, (d) have not
been a defendant in any qui tam/False Claims Act litigation, (e) have not been
served with or received any search warrant, subpoena, civil investigative
demand, contact letter, or, to the knowledge of each Seller, telephone or
personal contact by or from any federal or state enforcement agency (except in
connection with medical services provided to third-parties who may be defendants
or the subject of investigation into conduct unrelated to the operation of the
healthcare businesses conducted by a Seller), and (f) have not received any
written complaints or complaints through their telephonic hotlines from
employees, independent contractors, vendors, physicians, or any other person
that would indicate that a Seller has in the past violated, or is currently in
violation of, any law or regulation. Buyer has been provided with a description
of each audit and investigation conducted by each Seller pursuant to its
compliance program with respect to the Facilities during the last three (3)
years. For purposes of this Agreement, the term "COMPLIANCE PROGRAM" refers to
provider programs of the type described in the Compliance Program Guidance
published by the Office of Inspector General of the Department of Health and
Human Services.

3.29. HIPAA COMPLIANCE. The operations, the Facilities and each
Seller (as a health care provider, group health plan sponsor and/or group health
plan) comply with the Standards for Privacy of Individually Identifiable Health
Information (45 CFR Part 160 and Part 164, Subpart E) ("PRIVACY STANDARDS"),
including but not limited to having confidentiality agreements in effect as
required by the Privacy Standards with all of its Business Associates (as
defined in the Privacy Standards). Further, when acting as a Business Associate,
each Seller has in effect agreements with each of its Covered Entity (as defined
in 45 CFR Section 160.103) clients that satisfy the requirements of 45 CFR
Section 164.504(e), and no Seller is in material breach of any such agreements.
Sellers are currently submitting, receiving and handling or capable of
submitting, receiving and handling the transactions that have been standardized
pursuant to the Transactions and Code Set Standards (45 CFR Part 162) ("TCS
STANDARDS") in material compliance with the TCS Standards. Sellers have not
received any written complaints and, to the Sellers Knowledge oral complaints,
from any person regarding any Seller's or any Seller's agents, employees or
contractors' uses or disclosures of, or security practices regarding,
individually identifiable health-related information. With regard to
individually identifiable health-related information, no Seller is aware of any
misuse, improper disclosure, breach of a confidentiality agreement or security
incident (each as determined by reference to the Privacy Standards or state law,
as applicable) by any Seller or any Seller's agents, employees or contractors.
Sellers have not received any objections to the transfer of protected health
information or medical records to any new owner of the Facilities.

3.30. FULL DISCLOSURE. This Agreement, the Schedules hereto, and all
Closing Documents (as defined below) furnished and to be furnished to Buyer and
its representatives by Sellers pursuant hereto do not and will not include any
untrue statement of a material fact or omit to state any material fact required
therein that would make the statements made, in light of the circumstances under
which they were made and are to be made, misleading. Copies of all documents
referred to in any Schedule hereto have been delivered or made available to
Buyer and constitute true, correct and complete copies thereof and include all
amendments, exhibits, schedules, appendices, supplements or modifications
thereto or waivers thereunder. The term "CLOSING DOCUMENTS" means those
documents executed and delivered at the Closing pursuant to Article 2 above.

ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF BUYER

As of the date hereof, and, when read in light of any Schedules which
have been updated in accordance with the provisions of Section 12.1 hereof, as
of the Closing Date, Buyer represents and warrants to Sellers the following:

4.1. EXISTENCE AND CAPACITY. Buyer is a corporation, duly organized
and validly existing in good standing under the laws of the State of Delaware.
Buyer has the requisite power, authority and legal right to enter into this
Agreement, to perform its obligations hereunder, and to conduct its business as
now being conducted.

4.2. POWERS; GOVERNMENTAL CONSENTS; ABSENCE OF CONFLICTS WITH OTHER
AGREEMENTS, ETC. The execution, delivery, and performance of this Agreement by
Buyer and all other agreements referenced herein, or ancillary hereto, to which
Buyer is a party, and the consummation of the transactions contemplated herein
by Buyer:

(a) are within its corporate powers; subject to
compliance with Section 6.1, are not in contravention of law, or of the
terms of its organizational documents; and have been duly authorized by
all appropriate corporate action;

(b) except as provided in Section 6.1 below, do not
require any approval or consent of, or filing with, any governmental
agency or authority bearing on the validity of this Agreement which is
required by law or the regulations of any such agency or authority;

(c) except as set forth on Schedule 4.2(c), will neither
conflict with, nor result in any breach or contravention of, or the
creation of any lien, charge or encumbrance under, any indenture,
agreement, lease, instrument or understanding to which it is a party or
by which it is bound;

(d) subject to compliance with Section 6.1, will not
violate any statute, law, rule, or regulation of any governmental
authority to which it may be subject; and

(e) will not violate any judgment, decree, writ, or
injunction of any court or governmental authority to which it may be
subject.

4.3. BINDING AGREEMENT. This Agreement and all agreements to which
Buyer will become a party pursuant hereto are and will constitute the valid and
legally binding obligations of Buyer, and are and will be enforceable against
Buyer in accordance with the respective terms hereof and thereof, except insofar
as such enforceability may be limited by bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditors rights generally and general
principles of equity.

4.4. AVAILABILITY OF FUNDS FOR PURCHASE. Buyer has sufficient cash
on hand or availability of credit under established or existing credit
facilities to adequately fund the Purchase Price stated herein such that Buyer's
obligations are not contingent upon obtaining financing.

ARTICLE 5.
COVENANTS OF SELLERS PRIOR TO CLOSING

Between the date of this Agreement and the Closing:

5.1. INFORMATION. Sellers shall afford to the officers and
authorized representatives and agents (which shall include accountants,
attorneys, bankers, and other consultants) of Buyer full and complete access to
and the right to inspect the plants, properties, books, and records of the
Facilities, and will furnish Buyer with such additional financial and operating
data and other information as to the business and properties of Sellers
pertaining to the Facilities as Buyer may from time to time reasonably request
without regard to where such information may be located. Buyer's right of access
and inspection shall be exercised in such a manner as not to interfere
unreasonably with the operations of the Facilities. Buyer agrees that no
inspections shall take place and no employees or other personnel of the
Facilities shall be contacted by Buyer without Buyer first providing reasonable
notice to Sellers and coordinating such inspection or contact with Sellers.

5.2. OPERATIONS. From the date hereof until the Closing, Sellers
shall:

(a) carry on its business pertaining to the Facilities in
substantially the same manner as presently conducted and not make any
material change in personnel, operations, finance, accounting policies,
or real or personal property pertaining to the Facilities;

(b) maintain the Facilities and all parts thereof in good
operating condition, ordinary wear and tear excepted;

(d) keep in full force and effect present insurance
policies or other comparable insurance pertaining to the Facilities;

(e) use its commercially reasonable efforts to maintain
and preserve its business organizations intact, retain its present
employees at the Facilities and maintain its relationships with
physicians, referral sources, suppliers, customers, and others having
business relations with the Facilities; and

(f) pay all accounts payable on behalf of the Facilities
in a timely manner consistent with past practices.

5.3. NEGATIVE COVENANTS. From the date hereof until the Closing,
Sellers shall not, and shall cause the other Seller Entities not to, with
respect to the business or operation of the Facilities or otherwise regarding
the Assets, without the prior written consent of Buyer:

(a) amend or terminate any of its Contracts, enter into
any contract or commitment, or incur or agree to incur any liability,
except as provided herein or in the ordinary course of business and in
no event greater than Ten Thousand Dollars ($10,000) per item;

(b) enter into any contract or commitment with physicians
or other referral sources;

(c) increase compensation payable or to become payable or
make any bonus payment to or otherwise enter into one or more bonus
agreements with any employee at the Facilities, except in the ordinary
course of business in accordance with existing personnel policies;

(d) create, assume, or permit to exist any new debt,
mortgage, pledge, or other lien or encumbrance upon any of the Assets,
whether now owned or hereafter acquired;

(e) acquire (whether by purchase or lease) or sell,
assign, lease, or otherwise transfer or dispose of any property, plant,
or equipment except in the normal course of business with comparable
replacement thereof, or as currently contemplated and made known to
Buyer;

(f) purchase capital assets or incur costs in respect of
construction-in-progress in excess of Ten Thousand Dollars ($10,000);

(g) take any action outside the ordinary course of
business of the Facilities or their related ancillary services;

(h) reduce inventory of the Facilities except in the
ordinary course of business consistent with Sellers' past practices;

(i) enter into any agreement which could have a material
adverse effect on the value or operations of any of the Facilities or
any of the Assets; or

(j) alter its collections efforts with respect to
accounts receivable such that collections efforts are not consistent
with past practices.

5.4. GOVERNMENTAL APPROVALS. Sellers shall (i) obtain all
governmental approvals (or exemptions therefrom) necessary or required to allow
Sellers to perform their obligations under this Agreement; and (ii) assist and
cooperate with Buyer and its representatives and counsel in obtaining all
governmental consents, approvals, and licenses which Buyer deems necessary or
appropriate and in the preparation of any document or other material which may
be required by any governmental agency as a predicate to or as a result of the
transactions contemplated herein.

5.5. ADDITIONAL FINANCIAL INFORMATION. Within two (2) business days
after they are finalized (but in any event no later than twenty (20) days
following the end of each calendar month prior to Closing), Sellers shall
deliver to Buyer true and complete copies of the unaudited balance sheets and
the related unaudited statements of income (collectively, the "INTERIM
STATEMENTS") of, or relating to, the Facilities for each month then ended,
together with a year-to-date compilation and the notes, if any, related thereto,
which presentation shall be true, correct and complete in all material respects,
shall have been prepared from and in accordance with the books and records of
the Sellers, and shall fairly present the financial position and results of
operations of the Facilities as of the date and for the period indicated, all in
accordance with GAAP consistently applied, except that such financial statements
need not include required footnote disclosures. Sellers shall notify Buyer in
writing of any materially adverse unanticipated change in the business of any
Facility and of any governmental complaints, investigations or adjudicatory
proceedings (or communications indicating that the same may be contemplated) or
of any other such matter and shall keep Buyer fully informed of such events.

5.6. NO-SHOP CLAUSE. Except for the sale of inventory and other
assets in the ordinary course, Sellers agrees that, from and after the date of
the execution and delivery of this Agreement by Sellers until the termination of
this Agreement, Sellers will not, without the prior written consent of Buyer or
except as otherwise permitted by this Agreement: (i) offer for sale or lease all
or any portion of the Assets or any ownership interest in any entity owning any
of the Assets, (ii) solicit offers to buy all or any portion of the Assets or
any ownership interest in any entity owning any of the Assets, (iii) initiate,
encourage or provide any material documents or information to any third party in
connection with, negotiate with any person regarding any inquires, proposals or
offers relating to any disposition of all or any portion of the Assets or a
merger or consolidation of any entity owning any of the Assets, or (iv) enter
into any agreement or discussions with any party (other than Buyer) with respect
to the sale, assignment, or other disposition of all or any portion of the
Assets or any ownership interest in any entity owning any of the Assets or with
respect to a merger or consolidation of any entity owning any of the Assets.
Sellers will promptly communicate to Buyer the substance of any proposal
concerning any such transaction.

5.7. TITLE COMMITMENT AND SURVEY; UCC SEARCHES; DEFECTS AND CURE.

(a) TITLE COMMITMENT. As soon as practical after the date
of this Agreement, Buyer shall order a current title commitment (the
"TITLE COMMITMENT") issued by a nationally recognized title insurance
company reasonably acceptable to Buyer (the "TITLE COMPANY"), together
with legible copies of all exceptions to title referenced therein. The
Title Commitment shall set forth the state of title to the Real
Property, together with all exceptions or conditions to such title,
including, without limitation, all easements, restrictions,
rights-of-way, covenants, reservations, and all other encumbrances
affecting the Real Property which would appear in an owner's title
policy, if issued. The Title Commitment shall contain the express
commitment of the Title Company to issue the form Owner's Title Policy
described in Section 7.3 hereof (the "TITLE POLICY") to Buyer in an
amount equal to the portion of the Purchase Price being allocated to
the Real Property insuring good and marketable fee simple or leasehold
(as applicable) title to the Real

Property with the standard printed exceptions endorsed or deleted in
accordance with Section 7.3 hereof.

(b) SURVEY. Sellers shall deliver to Buyer copies of all
existing surveys of the Real Property in Sellers' possession. As soon
as practicable after the date hereof, Sellers, at their sole expense,
shall obtain current as-built surveys of the Real Property (the
"SURVEYS"). The Surveys shall meet the requirements of an ALTA/ACSM
survey as adopted in 1999 by the American Land Title Association and
the American Congress on Surveying and Mapping, including Table A
optional items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 13, 14, 15 and 16, and
otherwise be in form and detail satisfactory to Buyer. Unless otherwise
agreed by Buyer, the Surveys shall (i) be currently dated; (ii) show
the location on the Real Property of all improvements, fences,
evidences of abandoned fences, lakes, ponds, creeks, streams, rivers,
easements, roads, and right-of-way; (iii) identify all easements and
rights-of-way by reference to the recording information applicable to
the documents creating such easements or rights-of-way; (iv) show any
encroachments onto the Real Property from any adjacent property, any
encroachments from the Real Property onto adjacent property, and any
encroachments into any easement or restricted area within the Real
Property; (v) locate all existing improvements (such as buildings,
power lines, fences, and the like); (vi) locate all dedicated public
streets or other roadways providing access to the Real Property,
including all curb cuts and all alleys; (vii) locate all set-back lines
and similar restrictions covering the Real Property or any part thereof
and any violations of such restrictions; and (viii) show thereon a
legal description of the boundaries of the Real Property by metes and
bounds or other appropriate legal description. Each Survey shall
contain the surveyor's certification to Buyer, Sellers, and the Title
Company that (i) the Survey was made on the ground; (ii) there are no
visible or recorded easements, discrepancies, conflicts, encroachments,
or overlapping of improvements except as shown on the Survey; (iii) the
Survey correctly shows all visible or recorded easements or rights of
way across the Real Property or any other easements or rights of way of
which the surveyor has been advised, including, without limitation,
those matters affecting title reflected in the Title Commitment; (iv)
the Survey correctly shows the location of all buildings, structures,
and other improvements situated on the Real Property; (v) the Survey
conforms to all applicable minimum guidelines for ALTA/ACSM land title
surveys of comparable property as adopted in 1999 by the American Land
Title Association and the American Congress on Surveying and Mapping,
including Table A optional items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 13,
14, 15 and 16; (vi) all streets abutting the Real Property and all
means of ingress to and egress from the Real Property have been
completed, dedicated, and accepted for public maintenance by the
relevant municipal body; (vii) except as shown thereon, the Real
Property is not located within the 100 year flood plain or other flood
hazard area; (viii) the Survey is a true, correct, and accurate
representation of the Real Property; and (ix) such other matters as may
be required by the Title Company to allow it to issue the Title Policy.

(c) U.C.C. SEARCHES. U.C.C. Financing Statement searches,
local and central, including fixtures and including copies of all such
financing statements and exhibits and attachments thereto, and federal
and state tax lien and judgment searches, with respect to Sellers,
their Affiliates and predecessors, including all "DBA's," trade names
and

fictitious names of Sellers and the Facilities, from each of the
jurisdictions in which such entity does business or has done business
within the preceding five (5) years (the "U.C.C. SEARCHES"), shall be
obtained by Buyer, at Buyer's cost, at least fifteen (15) days prior to
Closing.

(d) DEFECTS AND CURE. The Commitment and the Survey and
U.C.C. Searches described in this Section 5.7 are collectively referred
to as "TITLE EVIDENCE." Buyer shall notify Sellers in writing ("Buyer's
Title Notice") within (i) fifteen (15) days after its receipt of the
last of the Commitments and Surveys, and (ii) within ten (10) days
after its receipt of the U.C.C. Searches of any liens, claims,
encroachments, exceptions or defects disclosed in the Title Evidence
which do not constitute Permitted Encumbrances (collectively,
"DEFECTS"); provided that such notice shall be given not later than
February 26, 2004, unless the parties mutually agree to extend the
March 1, 2004 Closing Date. Except as hereinafter set forth with
respect to Monetary Liens, any matters reflected in the Title Evidence
which are not included in Buyer's Title Notice shall be deemed to be
Permitted Encumbrances. Sellers shall, within ten (10) days of Sellers'
receipt of Buyer's Title Notice, or the business day prior to Closing,
whichever comes first, deliver written notice given to Buyer ("Sellers'
Title Notice") of all Defects which Seller agrees to cure, remove or
agree to pay for the Title Company to endorse over to Buyer's
satisfaction as soon as reasonably possible, but in all events not
later than the Closing Date (the "Title Cure Period"). Seller shall not
be deemed to have any obligation to cure any Defects unless Seller
expressly undertakes such an obligation pursuant to a Seller's Title
Notice; provided, however, (a) any and all monetary liens, whether
consensual or nonconsensual (hereinafter referred to collectively as
"Monetary Liens"), will be satisfied by Sellers at Closing from the
proceeds of the Purchase Price, regardless of whether included in a
Buyer's Title Notice or a Seller's Title Notice, and (b) Seller shall
use its best efforts to remove all other Defects, whether or not
included in a Seller's Title Notice, so long as the aggregate cost
incurred by Seller in connection with the removal thereof, together
with the cost of removing Defects pursuant to Section 5.7 of the Other
Purchase Agreement, does not exceed $200,000. If such Defects are not
timely cured to Buyer's satisfaction within the Title Cure Period,
Buyer may, upon written notice to Sellers, (i) terminate this Agreement
by written notice to the Sellers, or (ii) in its sole and absolute
discretion, elect to waive in writing its objection to any such
Defect(s), in which event such Defect(s) shall thereafter constitute a
Permitted Exception under this Agreement, or (iii) if Sellers so
request, agree to give Seller reasonable additional time to cure such
Defects, failing which Buyer may, upon the expiration of such
additional period, as may be granted by Buyer, exercise either of its
rights provided for in the immediately preceding clauses (i) or (ii).
In no event shall the Title Cure Period extend the Closing Date without
the express written consent of Buyer.

5.8. INSURANCE RATINGS. Sellers will take all action reasonably
requested by Buyer to enable Buyer to succeed to the Workers' Compensation and
Unemployment Insurance ratings, and other ratings for insurance or other
purposes established by the Sellers for the Facilities. Buyer shall not be
obligated to succeed to any such ratings, except as it may elect to do so.

5.9. MEDICAL STAFF DISCLOSURE. Sellers shall deliver to Buyer a
written disclosure containing a brief description of all adverse actions taken
against medical staff members or applicants by Sellers' medical staff between
the date of this Agreement and the Closing, which could result in claims or
actions against one or more Sellers and which are not disclosed in the minutes
of the meetings of the Medical Executive Committee of the Medical Staff of each
Facility which have been provided to Buyer. Information contained in such
disclosure shall be reasonably satisfactory to Buyer.

ARTICLE 6.
COVENANTS OF BUYER PRIOR TO CLOSING

6.1. GOVERNMENTAL APPROVALS. Between the date of this Agreement and
the Closing, Buyer shall (i) obtain all governmental approvals (or exemptions
therefrom) necessary or required to allow Buyer to perform its obligations under
this Agreement; and (ii) assist and cooperate with Sellers and its
representatives and counsel in obtaining all governmental consents, approvals,
and licenses which Sellers deem necessary or appropriate and in the preparation
of any document or other material which may be required by any governmental
agency as a predicate to or as a result of the transactions contemplated herein.

6.2. INSPECTION OF IMPROVEMENTS, SYSTEMS, AND EQUIPMENT; LIMITATION
OF POST-CLOSING WARRANTIES OF CONDITION. Prior to the Closing Date, Buyer shall
inspect all real property improvements, systems (plumbing, electrical, heating
and air conditioning) and equipment with a book value of $5,000 or more
("Material Equipment") constituting a part of the Assets. Not later than
February 26, 2004, Buyer shall give Sellers notice of any defects found as a
result of such inspection (herein an "Asset Defect"). Sellers and Buyer shall
agree upon a reasonable reduction of the Purchase Price to account for Asset
Defects or Sellers shall assume responsibility for the repair or replacement
cost thereof post-Closing. If Sellers dispute any Asset Defect, the matter shall
be submitted for arbitration post-Closing and a portion of the Purchase Price
equal to the estimated cost of repair or replacement shall be added to the
Escrow Account pending resolution of the dispute. Except as to Asset Defects for
which notice is timely given, Sellers shall not warrant the condition or fitness
for use of such real estate improvements, systems and Material Equipment
post-Closing and all such warranties (express or implied) are hereby waived and
released by Buyer, including warranties against redhibitory vices and defects.

ARTICLE 7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

Notwithstanding anything herein to the contrary, the obligations of
Buyer to consummate the transactions described herein are subject to the
fulfillment, on or prior to the Closing Date (unless such other date is
expressly set forth), of the following conditions precedent unless (but only to
the extent) waived in writing by Buyer at the Closing:

7.1. REPRESENTATIONS/WARRANTIES. The representations and warranties
of Sellers contained in this Agreement shall be true and accurate when made and,
when read in light of any Schedules which have been updated in accordance with
the provisions of Section 12.1 hereof, as of the Closing Date as though such
representations and warranties had been made on and as of

such Closing Date. Each and all of the terms, covenants, and conditions of this
Agreement to be complied with or performed by Sellers on or before the Closing
Date pursuant to the terms hereof shall have been duly complied with and
performed.

7.2. PRE-CLOSING CONFIRMATIONS. Buyer shall have obtained
documentation or other evidence satisfactory to Buyer in its reasonable
discretion that Buyer has:

(a) Received approval from all Government Entities whose
approval is required to complete the transactions herein contemplated;

(b) Received written confirmation from all applicable
licensure agencies that effective as of the Closing all licenses
required by law to operate the Facilities as currently operated will be
transferred to, or issued or reissued in the name of, Buyer;

(c) Obtained reasonable assurances that Medicare and
Medicaid certification of the Facilities for their operation by Buyer
will be effective as of the Closing and that Buyer may participate in
and receive reimbursement from such programs effective as of the
Closing; and

(d) Obtained the consents and approvals from all
non-Government Entities required for the consummation of the
transactions described herein.

7.3. TITLE POLICY. At the Closing, Buyer shall receive from the
Title Company, at Seller's sole cost and expense, a pro forma of the Title
Policy (or marked Title Commitment containing no additional exceptions to title
to the Real Property). The Title Policy shall be issued on an ALTA Form 1992
Owner's Title Policy in an amount equal to the portion of the Purchase Price
being allocated to the Real Property and shall insure to Buyer good and
marketable title to the owned Real Property subject only to (i) the Permitted
Encumbrances, and (ii) taxes for the current and subsequent years "not yet due
and payable." The Title Policy shall have all standard and general exceptions
deleted so as to afford full "extended form coverage" and shall contain such
endorsements thereto as Buyer may reasonably require in connection with its
review of the Title Commitment and the Surveys; provided, that to the extent
Buyer requests any special coverage endorsements to the standard title insurance
coverage, other than zoning, comprehensive and any endorsements necessary to
remove Defects that Sellers are obligated to remove, Buyer shall pay the cost
for such endorsements. The Title Policy shall permit a simultaneous issue rate
if requested by Buyer for its lender for a lender's mortgage title policy.
Sellers shall execute such certificates and affidavits as may be reasonably
necessary in connection with the issuance of the Title Policy as provided in
this Section 7.3.

7.4. ACTIONS/PROCEEDINGS. No action or proceeding before a court or
any other governmental agency or body shall have been instituted or threatened
to restrain or prohibit the transactions herein contemplated, and no
governmental agency or body shall have taken any other action or made any
request of any party hereto as a result of which Buyer reasonably and in good
xxxxx xxxxx it inadvisable to proceed with the transactions hereunder.

7.5. ADVERSE CHANGE. No material adverse change in the results of
operations, financial condition, or business of the Facilities shall have
occurred since the date of this Agreement, and Sellers shall not have suffered
any material change, loss or damage to the Assets (taken as a whole), whether or
not covered by insurance.

7.6. INSOLVENCY. No Seller shall (i) be in receivership or
dissolution, (ii) have made any assignment for the benefit of creditors, (iii)
have admitted in writing its inability to pay its debts as they mature, (iv)
have been adjudicated a bankrupt, or (v) have filed a petition in voluntary
bankruptcy, a petition or answer seeking reorganization, or an arrangement with
creditors under the federal bankruptcy law or any other similar law or statute
of the United States or any state, nor shall any such petition have been filed
against any Seller.

7.7. OPINION OF COUNSEL TO SELLERS. Buyer shall have received an
opinion from counsel to Sellers dated as of the Closing Date and addressed to
Buyer, in form and substance satisfactory to counsel for Buyer, covering the
matters set forth in Exhibit D hereto.

7.8. VESTING/RECORDATION. Sellers shall have furnished to Buyer, in
form and substance satisfactory to Buyer, assignments or other instruments of
transfer and consents and waivers by others, necessary or appropriate to
transfer to and effectively vest in Buyer all right, title, and interest in and
to the Assets, in proper statutory form for recording if such recording is
necessary or appropriate.

7.9. DELIVERY OF CERTAIN DOCUMENTS. At the Closing, Sellers shall
have delivered to Buyer the Closing Documents contemplated by Section 2.2. 7.10.
SIMULTANEOUS CLOSING. Buyer and the selling parties to the Other Asset Purchase
Agreement for the affiliated Shreveport facilities shall simultaneously close
the transactions contemplated thereby.

7.11. DUE DILIGENCE. Buyer shall have completed its due diligence
review of Sellers, the Assets and the Facilities, to its sole satisfaction, by
February 26, 2004.

7.12. INTERIM MANAGEMENT AGREEMENT. Brentwood Health Management of
MS, LLC shall enter into an Interim Management Agreement substantially in the
form of Exhibit G hereto.

7.13. INSURANCE. Sellers shall have delivered to Buyer evidence of
the "tail" insurance contemplated by Section 10.6.

7.14. EXTENSIONS OF CERTAIN LEASES. Sellers shall have received
copies of lease extensions, in a form satisfactory to Buyer, to those certain
lease agreements in which a Seller is a landlord and which are expired and/or
operating pursuant to tenant holdover provisions as of the date of this
Agreement.

ARTICLE 8.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS

Notwithstanding anything herein to the contrary, the obligations of
Sellers to consummate the transactions described herein are subject to the
fulfillment, on or prior to the Closing Date, of the following conditions
precedent unless (but only to the extent) waived in writing by Sellers at the
Closing:

8.1. REPRESENTATIONS/WARRANTIES. The representations and warranties
of Buyer contained in this Agreement shall be true and accurate when made and,
when read in light of any Schedules which have been updated in accordance with
the provisions of Section 12.1 hereof, as of the Closing Date as though such
representations and warranties had been made on and as of such Closing Date.
Each and all of the terms, covenants, and conditions of this Agreement to be
complied with or performed by Buyer on or before the Closing Date pursuant to
the terms hereof shall have been in duly complied with and performed.

8.2. BUYER'S GOVERNMENTAL APPROVALS. All material consents,
authorizations, orders and approvals of (or filings or registrations with) any
Government Entity or other party required to be obtained by Buyer in connection
with the execution, delivery and performance of this Agreement shall have been
obtained or made by Buyer when so required, except for any documents required to
be filed, or consents, authorizations, orders or approvals required to be
issued, after the Closing Date. 8.3. ACTIONS/PROCEEDINGS. No action or
proceeding before a court or any other governmental agency or body shall have
been instituted or threatened to restrain or prohibit the transactions herein
contemplated, and no governmental agent or body shall have taken any other
action or made any request of any party hereto as a result of which Sellers
reasonably and in good xxxxx xxxx it inadvisable to proceed with the
transactions hereunder.

8.4. INSOLVENCY. Buyer shall not (i) be in receivership or
dissolution, (ii) have made any assignment for the benefit of creditors, (iii)
have admitted in writing its inability to pay its debts as they mature, (iv)
have been adjudicated a bankrupt, or (v) have filed a petition in voluntary
bankruptcy, a petition or answer seeking reorganization, or an arrangement with
creditors under the federal bankruptcy law or any other similar law or statute
of the United States or any state, nor shall any such petition have been filed
against Buyer.

8.5. OPINION OF COUNSEL TO BUYER. Sellers shall have received an
opinion from counsel to Buyer dated as of the Closing Date and addressed to
Sellers, in form and substance satisfactory to counsel for Sellers, covering the
matters set forth in Exhibit E hereto. 8.6. INTERIM MANAGEMENT AGREEMENT. The
appropriate Buyer Entity shall enter into an Interim Management Agreement
substantially in the form of Exhibit G hereto.

8.7. DELIVERY OF CERTAIN DOCUMENTS. At the Closing, Buyer shall
have delivered to Sellers the Closing Documents and Purchase Price contemplated
by Section 2.3.

8.8. SIMULTANEOUS CLOSING. Buyer and the selling parties to the
Other Asset Purchase Agreement for the affiliated Shreveport facilities shall
simultaneously close the transactions contemplated thereby.

ARTICLE 9.
SELLERS' POST CLOSING COVENANTS

9.1. COVENANT NOT TO COMPETE; NON-SOLICITATION.

(a) Sellers hereby covenant that at all times from the
Closing Date until the fifth (5th) anniversary of the Closing Date,
Sellers and their respective Affiliates shall not, directly or
indirectly (except (i) as a consultant or contractor to or of Buyer (or
any Affiliate of Buyer), or their successors), own, lease, manage,
operate, control, or participate in any manner with the ownership,
leasing, management, operation or control of any business which offers
services in competition with the services of the Facilities within a
one hundred (100) mile radius of any of the Facilities (the "RESTRICTED
AREA"), without Buyer's prior written consent (which Buyer may withhold
in its sole and absolute discretion). In the event of a breach of this
Section 9.1, Sellers recognizes that monetary damages shall be
inadequate to compensate Buyer and Buyer shall be entitled, without the
posting of a bond or similar security, to an injunction restraining
such breach, with the costs (including attorneys' fees) of securing
such injunction to be borne by Sellers. Nothing contained herein shall
be construed as prohibiting Buyer from pursuing any other remedy
available to it for such breach or threatened breach. All parties
hereto hereby acknowledge the necessity of protection against the
competition of Sellers and their Affiliates and that the nature and
scope of such protection has been carefully considered by the parties.
Sellers further acknowledge and agree that the covenants and provisions
of this Section 9.1 form part of the consideration under this Agreement
and are among the inducements for Buyer entering into and consummating
the transactions contemplated herein. The period provided and the area
covered are expressly represented and agreed to be fair, reasonable and
necessary. The consideration provided for herein is deemed to be
sufficient and adequate to compensate for agreeing to the restrictions
contained in this Article 9 and no part of the consideration is
intended to be inducement or remuneration for the referral of patients.
If, however, any court determines that the foregoing restrictions are
not reasonable, such restrictions shall be modified, rewritten or
interpreted to include as much of their nature and scope as will render
them enforceable.

(b) Sellers hereby covenant that at all times from the
date hereof until the third (3rd) anniversary of the Closing Date,
Sellers and their respective Affiliates shall not, directly or
indirectly solicit, hire, employ, engage, or assist others in
soliciting, hiring, employing or engaging, any employee of Buyer or its
affiliates that became such in connection with the Closing of the
transactions contemplated herein.

9.2. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated among the various classes of Assets as set forth on Schedule 9.2
hereof, all in accordance with and as provided by Section 1060 of the Code. The
parties agree that any tax returns or other tax information they may file or
cause to be filed with any governmental agency shall be prepared

and filed consistently with such agreed upon allocation. In this regard, the
parties agree that, to the extent required, they will each properly prepare and
timely file Form 8594 in accordance with Section 1060 of the Code.

9.3. POST CLOSING ACCESS TO INFORMATION. Sellers and Buyer
acknowledge that subsequent to Closing each party may need access to information
or documents in the control or possession of the other party for the purposes of
concluding the transactions herein contemplated, audits, compliance with
governmental requirements and regulations, and the prosecution or defense of
third party claims. Accordingly, Sellers and Buyer agree that for a period of
six (6) years after Closing each will make reasonably available to the other's
agents, independent auditors, counsel, and/or governmental agencies upon written
request and at the expense of the requesting party such documents and
information as may be available relating to the Assets and Facilities for
periods prior and subsequent to Closing to the extent necessary to facilitate
concluding the transactions herein contemplated, audits, compliance with
governmental requirements and regulations, and the prosecution or defense of
claims.

9.4. PRESERVATION AND ACCESS TO RECORDS AFTER THE CLOSING. After
the Closing, Buyer shall, in the ordinary course of business and as required by
law, keep and preserve in their original form all medical and other records of
the Facilities existing as of the Closing, and which constitute a part of the
Assets delivered to Buyer at the Closing. For purposes of this Agreement, the
term "RECORDS" includes all documents, electronic data and other compilations of
information in any form. Buyer acknowledges that as a result of entering into
this Agreement and operating the Facilities it will gain access to patient and
other information which is subject to rules and regulations regarding
confidentiality. Buyer agrees to abide by any such rules and regulations
relating to the confidential information it acquires. Buyer agrees to maintain
the patient records delivered to Buyer at the Closing at the Facilities after
Closing in accordance with applicable law (including, if applicable, Section
1861(v)(i)(I) of the Social Security Act (42 U.S.C. 1395(v)(l)(i)), and
requirements of relevant insurance carriers, all in a manner consistent with the
maintenance of patient records generated at the Facilities after Closing. Upon
reasonable notice, during normal business hours, at the sole cost and expense of
Sellers, Buyer will afford to the representatives of Sellers, including its
counsel and accountants, full and complete access to, and copies of, the records
transferred to Buyer at the Closing (including, without limitation, access to
patient records in respect of patients treated by Sellers at the Facilities).
Upon reasonable notice, during normal business hours, Buyer shall also make its
officers and employees available to Sellers at reasonable times and places after
the Closing. In addition, Sellers shall be entitled, at Sellers' sole risk, to
remove from the Facilities copies of any such patient records, but only for
purposes of pending litigation involving a patient to whom such records refer,
as certified in writing prior to removal by counsel retained by Sellers in
connection with such litigation. Any patient record so removed from a Facility
shall be promptly returned to the Facility following its use by Sellers. Any
access to the Facilities, their records or Buyer's personnel granted to Sellers
in this Agreement shall be upon the condition that any such access not
materially interfere with the business operations of Buyer.

9.5. COOPERATION ON TAX MATTERS. Following the Closing, the parties
shall cooperate fully with each other and shall make available to the other, as
reasonably requested and at the expense of the requesting party, all
information, records or documents relating to tax liabilities or

potential tax liabilities of Sellers for all periods on or prior to the Closing
and any information which may be relevant to determining the amount payable
under this Agreement, and shall preserve all such information, records and
documents (to the extent a part of the Assets delivered to Buyer at Closing) at
least until the expiration of any applicable statute of limitations or
extensions thereof.

9.6. COST REPORTS. Sellers, at their expense, shall prepare and
timely file all terminating and other cost reports required or permitted by law
to be filed under the Medicare and Medicaid or other third party payor programs
and the State Health Agency for periods ending on or prior to the Closing Date,
or as a result of the consummation of the transactions described herein
("SELLERS COST REPORTS"). Buyer shall forward to Sellers any and all
correspondence relating to the Sellers Cost Reports within five (5) business
days after receipt by Buyer. Buyer shall remit any receipts of funds relating to
the Sellers Cost Reports promptly after receipt by Buyer and shall forward to
Sellers any demand for payments within five (5) business days after receipt by
Buyer. Sellers shall retain all rights to the Sellers Cost Reports including any
amounts receivable or payable in respect of such reports or reserves relating to
such reports. Such rights shall include the right to appeal any Medicare or
Medicaid determinations relating to the Sellers Cost Reports. Sellers shall
retain the originals of the Sellers Cost Reports, correspondence, work papers
and other documents relating to the Sellers Cost Reports. Sellers will furnish
copies of such cost reports, correspondence, work papers and other documents
relating to the Seller Cost Reports to Buyer upon request.

9.7. MISDIRECTED PAYMENTS, ETC. Sellers and Buyer covenant and
agree to remit, with reasonable promptness, to the other any payments received,
which payments are on or in respect of accounts or notes receivable owned by (or
are otherwise payable to) the other. In addition, and without limitation, in the
event of a determination by any governmental or third-party payor that payments
to the Sellers or the Facilities resulted in an overpayment or other
determination that funds previously paid by any program or plan to the Sellers
or the Facilities must be repaid, Sellers shall be responsible for repayment of
said monies (or defense of such actions) if such overpayment or other repayment
determination was for services rendered prior to the Closing Date and Buyer
shall be responsible for repayment of said monies (or defense of such actions)
if such overpayment or other repayment determination was for services rendered
on or after the Closing Date. In the event that, following Closing, Buyer
suffers any offsets against reimbursement under any third-party payor or
reimbursement programs due to Buyer, relating to amounts owing under any such
programs by Sellers or any of its Affiliates for services rendered prior to the
Closing Date, Sellers shall immediately upon demand from Buyer pay to Buyer the
amounts so billed or offset.

9.8. USE OF CONTROLLED SUBSTANCE PERMITS. To the extent permitted
by applicable law, Buyer shall have the right, for a period not to exceed one
hundred twenty (120) days following the Closing Date, to operate under the
licenses and registrations of the Sellers relating to controlled substances and
the operations of pharmacies and laboratories, until Buyer is able to obtain
such licenses and registrations for itself. In furtherance thereof, the Sellers
shall execute and deliver to Buyer at or prior to the Closing limited powers of
attorney substantially in the form of Exhibit E hereto.

9.9. LOSS EXPERIENCE. For a period of six (6) years following the
Closing Date, Sellers shall provide Buyer with annual reports concerning the
professional liability and general liability loss experience of the Facilities
related to events occurring prior to the Closing Date. In addition, for a period
of five (5) years following the Closing Date, Sellers shall provide Buyer with
annual reports concerning the workers' compensation loss experience of the
Facilities related to events occurring prior to the Closing Date.

9.10. NET WORTH COVENANT. For a period of not less than four (4)
years following the Closing, Sellers and/or one or more of Sellers' owners,
designated at Closing, shall guarantee the Sellers' indemnification obligations
under Article 11 hereof. The form of guaranty shall be set forth on Exhibit H
hereto. The same guaranty shall also secure the indemnification obligations of
Sellers under Article 11 of the Other Purchase Agreement. For the four (4) year
term of the guaranty, such Seller (or guarantor, if applicable) shall have and
maintain a minimum net worth of not less than two million dollars ($2,000,000).

9.11. OPTION TO PURCHASE ADDITIONAL ASSETS. For three (3) years
after Closing (the "Option Period"), Buyer shall have the option to acquire from
Brentwood Health Management of MS, LLC, the Mississippi certificates of need
#R-0077 and #R-0134 (the "Xxxxxx County CONs") for the total purchase price of
one dollar ($1.00) (the "Purchase Option"), such Purchase Option to be
assignable by Buyer without requiring the consent of any Seller. Buyer (or its
assignee) shall elect to exercise this Purchase Option by delivering to Seller
Representative a notice (pursuant to the provisions of Section 12.13 hereof) of
its intent to exercise the Purchase Option. Within thirty (30) days after the
Seller Representative's receipt of such notice, Buyer (or its assignee) and
Brentwood Health Management of MS, LLC shall negotiate a purchase agreement
including customary representations and warranties for the purchase of the
Xxxxxx County CONS, subject to the consent of the Mississippi Department of
Health. Brentwood Health Management of MS, LLC and the Seller Representative
shall cooperate in the preparation, filing, and prosecution of an amendment to
the Xxxxxx County CONs permitting the transfer of same to Buyer (or its
assignee) and any and all other requested changes to the Xxxxxx County CONs as
deemed necessary or advisable by Buyer (or its assignee) (the "Proposed
Amendment"). During the Option Period and for so long as the Proposed Amendment
is pending with the Mississippi Department of Health, Brentwood Health
Management of MS, LLC shall maintain its legal existence and shall refrain from
any action which may endanger the current validity of one or both of the Xxxxxx
County CONs or which may create a likelihood of revocation of one or both of the
Xxxxxx County CONs.

ARTICLE 10.
ADDITIONAL AGREEMENTS

10.1. TERMINATION PRIOR TO CLOSING. Notwithstanding anything herein
to the contrary, this Agreement may be terminated at any time: (i) on or prior
to the Closing Date by mutual written consent of Sellers and Buyer; (ii) on or
prior to the Closing Date by Buyer, if any of the conditions specified in
Article 7 of this Agreement have not been satisfied and cannot be satisfied
prior to or on the Closing Date (unless the failure results primarily from Buyer
breaching any representation, warranty, or covenant herein) and shall not have
been waived by Buyer; (iii) on or prior to the Closing Date by Sellers if any of
the conditions specified in Article 8 of this

Agreement have not been satisfied and cannot be satisfied prior to or on the
Closing Date (unless the failure results primarily from Sellers' breaching any
representation, warranty, or covenant herein) and shall not have been waived by
Sellers; (iv) by Buyer or Sellers if the Closing Date shall not have taken place
on or before March 1, 2004 (which date may be extended by mutual written
agreement of Buyer and Sellers, such extension not to be unreasonably withheld),
or (v) by either Sellers or Buyer pursuant to Section 12.1 hereof.
Notwithstanding the foregoing, the parties hereto confirm and agree to extend
the termination date set forth in subparagraph (iv) above for a period of up to
fifteen (15) days in the event any regulatory approval of a Governmental Entity
required hereby has not been received as of the anticipated Closing Date set
forth in Section 2.1.

10.2. CON DISCLAIMER. This Agreement shall not be deemed to be an
acquisition or an obligation to make a capital investment or to expend funds
within the meaning of the certificate of need statute of any state, until the
appropriate governmental agencies shall have granted a certificate of need or
the appropriate approval or ruled that no certificate of need or other approval
is required.

10.3. TAX AND MEDICARE EFFECT. None of the parties (nor such
parties' counsel or accountants) has made or is making any representations to
any other party (nor such party's counsel or accountants) concerning any of the
tax or Medicare reimbursement effects of the transactions provided for in this
Agreement as each party hereto represents that each has obtained, or may obtain,
independent tax and Medicare advice with respect thereto and upon which it, if
so obtained, has solely relied.

10.4. REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating hereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) the documents delivered at
the Closing, and (c) financial statements, certificates and other information
previously or hereafter furnished to Sellers or to Buyer, may, subject to the
provisions of Section 12.10 hereof, be reproduced by Sellers and by Buyer by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and Sellers and Buyer may destroy, in accordance with
applicable law, any original documents so reproduced. Sellers and Buyer agree
and stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial, arbitral or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction was
made by the Sellers or Buyer in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

10.5. EMPLOYEE MATTERS. As of the Closing Date, the Sellers shall
(i) assign the Xxxxxxx X. Xxxxxx employment Contract set forth on Schedule
1.1(i) and (ii) terminate all other employees at the Facilities, and Buyer shall
offer to hire substantially all such employees commencing as of the Closing Date
at compensation levels consistent with those being provided by the Sellers
immediately prior to the Closing Date. Buyer shall provide a list to Sellers at
least ten (10) days prior to Closing of all employees of the Sellers that Buyer
does not intend to hire, if any. The offers of employment will be subject to
reasonable and satisfactory job performance by each individual, and no such
offer will alter the status of any "at will" employee. Nothing herein shall be
deemed to affect or limit in any way normal management prerogatives of Buyer
with

respect to employees or to create or grant to any such employees third
party beneficiary rights or claims of any kind or nature. Within the period of
ninety (90) days before the Closing, the Sellers shall not, and within the
ninety (90) days following the Closing, Buyer shall not: (1) permanently or
temporarily shut down a single site of employment, or one or more facilities or
operating units within a single site of employment, if the shutdown results in
an employment loss during any thirty (30) day period at the single site of
employment for fifty (50) or more employees, excluding any part-time employees;
or (2) have a mass layoff at a single site of employment of at least
thirty-three percent (33%) of the active employees and at least fifty (50)
employees, excluding part-time employees. The terms "single site of employment,"
"operating unit," "employment loss" and "mass layoff" shall be defined as in the
Workers Adjustment Retraining and Notification Act (the "WARN ACT"). With
respect to terminations of employees following the Closing, Buyer shall be
responsible for any notification required under the WARN Act. To the extent
Buyer fails to provide proper WARN Act notice (as and if required), Buyer shall
be responsible for payments due affected employees under the WARN Act. In
respect of the employees employed by Buyer, it shall provide such employees with
employee benefits consistent with the benefits generally offered to employees of
Affiliates of Buyer in the same geographic area as the Facilities and, to the
extent the Sellers have qualified retirement programs for such employees, Buyer
shall recognize the existing seniority of all such employees for benefits
purposes and shall provide credit under such plans for purposes of determining
eligibility and vesting and the rate of benefit accrual (but not actual benefit
accrual); provided, however, that no such credit need be given in respect of any
new plan commenced or participated in by Buyer in which no prior service credit
is given or recognized to or for other plan beneficiaries. In extending such
benefits, Buyer shall waive pre-existing conditions limitations in Buyer's
welfare benefit plans which might otherwise apply to such employees except to
the extent employees have not satisfied such limitations under the current
welfare benefit plans of the Sellers.

10.6. INSURANCE. Prior to the Closing, Sellers shall, at their sole
cost and expense, obtain "tail" insurance for a period not less than three (3)
years to insure against professional and general liabilities of the Facilities,
their professional employees, and their professional independent contractors
relating to all periods prior to the Closing. Such insurance shall have coverage
levels equal to the current policies insuring Sellers.

ARTICLE 11.
INDEMNIFICATION

11.1. INDEMNIFICATION BY BUYER. Subject to the limitations set forth
in Section 11.3 hereof, Buyer and its Affiliates and successors shall defend,
indemnify and hold harmless Sellers and its Affiliates, and its and their
respective officers, employees, shareholders, members, agents or independent
contractors (collectively, "SELLER INDEMNIFIED PARTIES"), from and against any
and all losses, liabilities, damages, costs (including, without limitation,
court costs and costs of appeal) and expenses (including, without limitation,
reasonable attorneys' fees and fees of expert consultants and witnesses) that
such Seller Indemnified Party incurs as a result of, or with respect to (i) any
misrepresentation or breach of warranty by Buyer under this Agreement, (ii) any
breach by Buyer of, or any failure by Buyer to perform, any covenant or
agreement of (exclusive of the items covered by subparagraph (i) above), or
required to be performed by, Buyer under this

Agreement, (iii) any of the Assumed Liabilities, or (iv) any claim made by a
third party with respect to the operation of the Facilities following the
Closing Date.

11.2. INDEMNIFICATION BY SELLERS. Subject to the limitations set
forth in Section 11.3 hereof, Sellers jointly and severally shall defend,
indemnify and hold harmless Buyer and its Affiliates, and its and their
respective officers, employees, shareholders, members, agents, or independent
contractors (collectively, "BUYER INDEMNIFIED PARTIES"), from and against any
and all losses, liabilities, damages, costs (including, without limitation,
court costs and costs of appeal) and expenses (including, without limitation,
reasonable attorneys' fees and fees of expert consultants and witnesses) that
such Buyer Indemnified Party incurs as a result of, or with respect to (i) any
misrepresentation or breach of warranty by a Seller under this Agreement, (ii)
any breach by a Seller of, or any failure by a Seller to perform, any covenant
or agreement of (exclusive of the items covered by subparagraph (i) above), or
required to be performed by, a Seller under this Agreement, (iii) any of the
Excluded Liabilities, or (iv) any claim made by a third party with respect to
the operation of the Facilities prior to the Closing Date.

11.3. LIMITATIONS. Buyer and Sellers shall be liable under Section
11.1(i) or Section 11.2(i) (i.e., for misrepresentations and breaches of
warranties), as applicable, only when aggregate indemnification claims exceed
$20,000 ("THRESHOLD AMOUNT"), after which Buyer or Sellers, as applicable, shall
be liable for all such claims back to the first dollar of damages. No party
shall be liable for any indemnification pursuant to Section 11.1 (i) or Section
11.2(i), as applicable, for any claims for misrepresentations and breaches of
warranty which are the basis upon which any other party shall have failed to
consummate the transactions described herein pursuant to Section 7.1 or Section
8.1, as applicable, or which are based upon misrepresentations and breaches of
warranty which have been waived in writing by the party seeking indemnification
therefor.

The liability of Buyer and Sellers for indemnification under Section
11.1(i) or Section 11.2(i), respectively, shall be limited to an amount equal to
(i) the Purchase Price with respect to the representations and warranties
contained in Sections 3.1, 3.2, 3.3, 3.12 (subject to the limitations of title
warranties stated in Section 2.2(a) and (b)), 4.1, 4.2 and 4.3, (ii) Two Million
Dollars ($2,000,000) with respect to the representations and warranties
contained in Sections 3.7, 3.8, 3.9, 3.15 and 3.23, and (iii) One Million
Dollars ($1,000,000) with respect to all other representations and warranties.
Notwithstanding anything to the contrary, the limitations contained in this
Section 11.3 shall not apply to any indemnification claims arising under Section
11.1(i) or Section 11.2(i) as a result of the intentional misrepresentation or
fraud of Buyer or Sellers, respectively. Except in the case of intentional
misrepresentation or fraud, the sole and exclusive remedy for any breach or
inaccuracy, or alleged breach or inaccuracy, of any representation or warranty
made by a Seller or Buyer shall be the remedies provided by this Article 11. The
losses of any Indemnified Party (as defined below) shall be reduced by the
amount of any insurance proceeds received (net of applicable insurance premium
increases) by such Indemnified Party in respect of the claim to which such
losses relate. The losses of any Indemnified Party shall not include punitive
damages, except to the extent such punitive damages are included in a third
party claim.

11.4. NOTICE AND CONTROL OF LITIGATION. If any claim or liability is
asserted in writing by a third party against a party entitled to indemnification
under this Article 11 (the "INDEMNIFIED

PARTY") which would give rise to a claim under this Article 11, the Indemnified
Party shall promptly notify the person giving the indemnity (the "INDEMNIFYING
PARTY") in writing of the same within fifteen (15) days of receipt of such
written assertion of a claim or liability. The failure to give such notice shall
not relieve the Indemnifying Party of its indemnification obligations under this
Agreement, unless and to the extent that the failure to give such notice to the
Indemnifying Party prevents the Indemnifying Party from raising a defense to
such legal proceeding, claim or demand or otherwise materially and adversely
affects the Indemnifying Party's ability to defend against such legal
proceeding, claim or demand. The Indemnifying Party shall have the right to
defend a claim and control the defense, settlement, and prosecution of any
litigation. The Indemnifying Party shall have ten (10) days from the date of
delivery of notice to notify the Indemnified Party (i) whether the Indemnifying
Party disputes liability to the Indemnified Party hereunder with respect to the
third party claim, and, if so, the basis for such a dispute, and (ii) if such
party does not dispute liability, whether or not the Indemnifying Party desires,
to defend against the third party claim. If the Indemnifying Party fails to
defend such claim, the Indemnified Party shall (upon further notice to the
Indemnifying Party) have the right to undertake the defense, compromise, or
settlement of such claim on behalf of and for the account and at the risk of the
Indemnifying Party, subject to the right of the Indemnifying Party to assume the
defense of such claim at any time prior to settlement, compromise, or final
determination thereof. Anything in this Section 11.4 notwithstanding, (i) if
there is a reasonable probability that a claim may materially and adversely
affect the Indemnified Party other than as a result of money damages or other
money payments, the Indemnified Party shall have the right, at its own cost and
expense, to defend, compromise, and settle such claim, and (ii) the Indemnifying
Party shall not, without the written consent of the Indemnified Party, settle or
compromise any claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the giving by the claimant to the
Indemnified Party of a release from all liability in respect of such claim. The
foregoing rights and agreements shall be limited to the extent of any
requirement of any third-party insurer or indemnitor. All parties agree to
cooperate fully as necessary in the defense of such matters.

11.5. NOTICE OF CLAIM. If an Indemnified Party becomes aware of any
breach of the representations or warranties of the Indemnifying Party hereunder
or any other basis for indemnification under this Article 11, the Indemnified
Party shall notify the Indemnifying Party in writing of the same within thirty
(30) days after becoming aware of such breach or claim, specifying in detail the
circumstances and facts which give rise to a claim under this Article 11. Should
the Indemnified Party fail to notify the Indemnifying Party within the time
frame required above, the indemnity with respect to the subject matter of the
required notice shall be limited to the damages that would have nonetheless
resulted absent the Indemnified Party's failure to notify the Indemnifying Party
in the time required above after taking into account such actions as could have
been taken by the Indemnifying Party had it received timely notice from the
Indemnified Party. An Indemnifying Party's liability under Section 11.1(i) or
11.2(i) shall terminate upon the expiration of the survival period set forth in
Section 12.17 hereof, except for claims for which notice has been given on or
prior to such expiration date in accordance with this Section 11.5.

ARTICLE 12.
MISCELLANEOUS

12.1. SCHEDULES AND OTHER INSTRUMENTS. Each Schedule and Exhibit to
this Agreement shall be considered a part hereof as if set forth herein in full.
At any time prior to the Closing, Sellers or Buyer may update a Schedule
required to be provided by it subject to the other party's approval rights
described below. Any other provision herein to the contrary notwithstanding, all
Schedules, Exhibits or other instruments provided for herein and not delivered
at the time of execution of this Agreement or which are incomplete at the time
of execution of this Agreement shall be delivered or completed within ten (10)
days after the date hereof or prior to the Closing, whichever is sooner. It
shall be deemed a condition precedent to the obligations of the parties hereto
that each of the Schedules, and Exhibits shall meet with the approval of such
parties. If a party, in its sole discretion, determines that it should not
consummate the transactions contemplated by this Agreement because of
information contained in a Schedule or Exhibit that is delivered to such party
after the execution of this Agreement, then such party may terminate this
Agreement on or before the Closing by giving written notice thereof to the other
party.

12.2. ADDITIONAL ASSURANCES. The provisions of this Agreement shall
be self-operative and shall not require further agreement by the parties except
as may be herein specifically provided to the contrary; provided, however, at
the request of a party, the other party or parties shall execute such additional
instruments and take such additional actions as are reasonable to effectuate
this Agreement. In addition and from time to time after Closing, Sellers shall
execute and deliver such other instruments of conveyance and transfer, and take
such other actions as Buyer reasonably may request, more effectively to convey
and transfer full right, title, and interest to, vest in, and place Buyer in
legal and actual possession of, any and all of the Facilities and the Assets.
Sellers shall also furnish Buyer with such information and documents in its
possession or under its control, or which Sellers can execute or cause to be
executed, as will enable Buyer to prosecute any and all petitions, applications,
claims, and demands relating to or constituting a part of the Facilities or the
Assets. Additionally, the parties hereto shall cooperate and use their
commercially reasonable efforts to have its present directors, officers, members
and employees cooperate with such other party on and after Closing in furnishing
information, evidence, testimony, and other assistance in connection with any
action, proceeding, arrangement, or dispute of any nature with respect to
matters pertaining to all periods prior to (or post) Closing in respect of the
items subject to this Agreement, including, but not limited to, all records and
personnel with regard to any pending litigation or litigation arising after the
Closing.

12.3. CONSENTED ASSIGNMENT. Anything contained herein to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any claim, right, contract, license, lease, commitment, sales order, or
purchase order if an attempted assignment thereof without the consent of the
other party thereto would constitute a breach thereof or in any material way
affect the rights of Sellers thereunder, unless such consent is obtained. Each
of the Sellers and Buyer, respectively, shall use its reasonable efforts to
obtain any third party consents to the transactions contemplated by this
Agreement from parties with which each, respectively, has a contractual
relationship. If such consent is not obtained, or if an attempted assignment
would be ineffective or would materially affect the rights thereunder of Sellers
so that Buyer would not in fact receive all such rights, Sellers and Buyer shall
cooperate in good faith in any

reasonable arrangement designed to provide for Buyer the benefits under any such
claim, right, contract, license, lease, commitment, sales order, or purchase
order, including, without limitation, enforcement of any and all rights of
Sellers against the other party or parties thereto arising out of the breach or
cancellation by such other party or otherwise.

12.4. CONSENTS, APPROVALS AND DISCRETION. Except as herein expressly
provided to the contrary, whenever this Agreement requires any consent or
approval to be given by a party, or whenever a party must or may exercise
discretion, the parties agree that such consent or approval shall not be
unreasonably withheld or delayed and such discretion shall be reasonably
exercised.

12.5. LEGAL FEES AND COSTS. In the event a party elects to incur
legal expenses to enforce or interpret any provision of this Agreement by
judicial proceedings or arbitration, the prevailing party will be entitled to
recover such legal expenses, including, without limitation, reasonable
attorneys' fees, reasonable expert witness fees, costs, and necessary
disbursements at all court levels, in addition to any other relief to which such
party shall be entitled.

12.6. CHOICE OF LAW. The parties agree that this Agreement shall be
governed by and construed in accordance with the laws of the State of Tennessee
without regard to conflict of laws principles. Furthermore, the parties
acknowledge that the Mississippi statutory laws and regulations are applicable
to (i) the licensure matters associated with the Facilities, and (ii) the deed
evidencing the transfer of the Real Property assets.

12.7. BENEFIT/ASSIGNMENT. Subject to provisions herein to the
contrary, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective legal representatives, successors, and
assigns. No party may assign this Agreement without the prior written consent of
the other parties, which consent shall not be unreasonably withheld; provided,
however, that any party may, without the prior written consent of the other
parties, assign its rights and delegate its duties hereunder to one or more
Affiliates (as defined in Section 12.18), but in such event, the assignor shall
be required to remain obligated hereunder in the same manner as if such
assignment had not been effected. Sellers hereby agree to transfer the Assets
and Assumed Liabilities to the Buyer Entities specified on Exhibit B at the
Closing. The transfer of the Assets and Assumed Liabilities to the Buyer
Entities shall not relieve Buyer of any of its obligations under this Agreement.

12.8. NO BROKERAGE. Each party agrees to be solely liable for and
obligated to satisfy and discharge all loss, cost, damage, or expense arising
out of claims for fees or commissions of brokers, investment bankers and
financial advisors employed or alleged to have been employed by such party.

12.9. COST OF TRANSACTION. Whether or not the transactions
contemplated hereby shall be consummated and except as expressly set forth in
Sections 12.28 and 12.29, the parties agree as follows: (i) Sellers shall pay
the fees, expenses, and disbursements of Sellers and their agents,
representatives, accountants, and legal counsel incurred in connection with the
subject matter hereof and any amendments hereto; and (ii) Buyer shall pay the
fees, expenses, and disbursements of Buyer and its agents, representatives,
accountants and legal counsel incurred in connection with the subject matter
hereof and any amendments hereto.

12.10. CONFIDENTIALITY. It is understood by the parties hereto that
the information, documents, and instruments delivered to Buyer by Sellers and
its agents and the information, documents, and instruments delivered to Sellers
by Buyer and its agents are of a confidential and proprietary nature. Each of
the parties hereto agrees that both prior and subsequent to the Closing it will
maintain the confidentiality of all such confidential information, documents, or
instruments delivered to it by each of the other parties hereto or their agents
in connection with the negotiation of this Agreement or in compliance with the
terms, conditions, and covenants hereof and will only disclose such information,
documents, and instruments to its duly authorized officers, members, directors,
shareholders, representatives, and agents (including consultants, attorneys, and
accountants of each party) and applicable governmental authorities in connection
with any required notification or application for approval or exemption
therefrom. Each of the parties hereto further agrees that if the transactions
contemplated hereby are not consummated, it will return (or destroy and certify
the destruction thereof) all such documents and instruments and all copies
thereof in its possession to the other parties to this Agreement. Each of the
parties hereto recognizes that any breach of this Section 12.10 would result in
irreparable harm to the other party to this Agreement and its Affiliates (as
defined in Section 12.18 below) and that therefore either Sellers or Buyer shall
be entitled to an injunction to prohibit any such breach or anticipated breach,
without the necessity of posting a bond, cash, or otherwise, in addition to all
of its other legal and equitable remedies. Nothing in this Section 12.10,
however, shall prohibit the use of such confidential information, documents, or
information for such governmental filings as in the opinion of Sellers' counsel
or Buyer's counsel are required by law or governmental regulations or are
otherwise required to be disclosed pursuant to applicable law.

12.11. PUBLIC ANNOUNCEMENTS. Sellers and Buyer mutually agree that no
party hereto shall release, publish, or otherwise make available to the public
in any manner whatsoever any information or announcement regarding the
transactions herein contemplated without the prior written consent of Sellers
and Buyer, except for information and filings reasonably necessary to be
directed to governmental agencies to fully and lawfully effect the transactions
herein contemplated or required in connection with securities and other laws.
Nothing herein shall prohibit either party from responding to questions
presented by the press or media without first obtaining prior consent of the
other party hereto.

12.12. WAIVER OF BREACH. The waiver by any party of a breach or
violation of any provision of this Agreement shall not operate as, or be
construed to constitute, a waiver of any subsequent breach of the same or any
other provision hereof.

12.13. NOTICE. Any notice, demand, or communication required,
permitted, or desired to be given hereunder shall be deemed effectively given
when personally delivered, when received by receipted overnight delivery, or
five (5) days after being deposited in the United States mail, with postage
prepaid thereon, certified or registered mail, return receipt requested,
addressed as follows:

Sellers: Brentwood Health Management of MS, LLC
Xxxxxx-Xxxxxxx of Mississippi, LLC
c/o 000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx

With a copy to: Davidson, Xxxxx & Xxxxxxx, APLC
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx

Buyer: Psychiatric Solutions, Inc.
000 Xxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer

With a copy to: Bass, Xxxxx & Xxxx PLC
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx III

or to such other address, and to the attention of such other person or officer
as any party may designate, with copies thereof to the respective counsel
thereof as notified by such party.

12.14. SEVERABILITY. In the event any provision of this Agreement is
held to be invalid, illegal or unenforceable for any reason and in any respect,
such invalidity, illegality, or unenforceability shall in no event affect,
prejudice, or disturb the validity of the remainder of this Agreement, which
shall be and remain in full force and effect, enforceable in accordance with its
terms.

12.15. GENDER AND NUMBER. Whenever the context of this Agreement
requires, the gender of all words herein shall include the masculine, feminine,
and neuter, and the number of all words herein shall include the singular and
plural.

12.16. DIVISIONS AND HEADINGS. The divisions of this Agreement into
sections and subsections and the use of captions and headings in connection
therewith are solely for convenience and shall have no legal effect in
construing the provisions of this Agreement.

12.17. SURVIVAL. All of the representations, warranties, covenants,
and agreements made by the parties in this Agreement or pursuant hereto in any
certificate, instrument, or document shall survive the consummation of the
transactions described herein, and may be fully and completely relied upon by
Sellers and Buyer, as the case may be, notwithstanding any investigation
heretofore or hereafter made by any of them or on behalf of any of them, and
shall not be deemed merged into any instruments or agreements delivered at the
Closing or thereafter. Notwithstanding anything in this Section 12.17 which may
be to the contrary, any claim, demand, or cause of action with respect to a
breach of any representation or warranty made in this

Agreement (other than representations or warranties contained in Sections 3.1,
3.2, 3.3, 3.12 (subject to the limitations of title warranties stated in Section
2.2(a) and (b)), 4.1, 4.2 and 4.3, which shall survive indefinitely, and the
representations or warranties contained in Sections 3.7, 3.8, 3.9, 3.17 and
3.23, which shall each survive for the term of the applicable statute of
limitations) must be made or brought, if at all, within one (1) year after the
Closing Date. For the avoidance of doubt, this Section 12.17 shall not affect
any rights to bring claims after one (1) year based on (x) any covenant or
agreement of the parties which contemplates performance after the Closing, (y)
the obligations of Buyer under Sections 11.1(ii), 11.1(iii) or 11.1(iv) or (z)
the obligations of Sellers under Section 11.2(ii), 11.2(iii) or 11.2(iv).

12.18. AFFILIATES. As used in this Agreement, the term "AFFILIATE"
means, as to the entity in question, any person or entity that directly or
indirectly controls, is controlled by or is under common control with, the
entity in question and the term "CONTROL" means possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity whether through ownership of voting securities, by
contract or otherwise.

12.19. KNOWLEDGE. "KNOWLEDGE" or similar phrases shall mean in the
case of any Seller, the particular fact was actually known or not known, after
due inquiry, as the context requires, by Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxx,
Xx., Xxxxx Xxxxxxxx, Xxxx Xxxxx and/or Xxxxxxx Xxxxxx.

12.20. RESOLUTION OF DISPUTES

(a) Arbitration. Any dispute, controversy or claim
arising out of or relating to this Agreement or any contract or
agreement entered into pursuant hereto or the performance by the
parties of its or their terms shall be settled by binding arbitration
held in Memphis, Tennessee (or such other location as may be mutually
acceptable to the parties) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in
effect, except as specifically otherwise provided in this Section
12.20. Notwithstanding the foregoing, Buyer may, in its discretion,
apply to a court of competent jurisdiction for equitable relief from
any violation or threatened violation of the covenants of any
Shareholder under Section 5.3 of this Agreement, or any covenants not
to compete contained in any Employment and Noncompetition Agreement
delivered pursuant to Section 5.2 hereof.

(b) Arbitrators. The arbitration shall be decided before
three neutral arbitrators unless the parties agree to a mutually
selected single arbitrator. Each party shall be entitled to select an
arbitrator (approved by the AAA) and the two arbitrators shall mutually
select the third AAA arbitrator.

(c) Procedures; No Appeal. The arbitrator(s) shall allow
such discovery as the arbitrator(s) determine appropriate under the
circumstances (provided that each side shall be entitled to at least
one day of depositions and reasonable production of relevant documents)
and shall resolve the dispute as expeditiously as practicable, and if
reasonably practicable, within 120 days after the selection of the
arbitrator(s). The arbitrator(s) shall give the parties written notice
of the decision, with the reasons therefor set out, and shall have 30
days thereafter to reconsider and modify such decision if any party so
requests

within 10 days after the decision. Thereafter, the decision of the
arbitrator(s) shall be final, binding, and nonappealable with respect
to all persons, including (without limitation) persons who have failed
or refused to participate in the arbitration process.

(d) Authority. The arbitrator(s) shall have authority to
award relief under legal or equitable principles, including interim or
preliminary relief, and to allocate responsibility for the costs of the
arbitration and to award recovery of attorneys fees and expenses in
such manner as is determined to be appropriate by the arbitrator(s).

(e) Entry of Judgment. Judgment upon the award rendered
by the arbitrator(s) may be entered in any court having in personam and
subject matter jurisdiction. Buyer and each Seller hereby submit to the
in personam jurisdiction of the Federal and State courts in Louisiana
and Tennessee, for the purpose of confirming any such award and
entering judgment thereon.

(f) Confidentiality. All proceedings under this Section
12.20, and all evidence given or discovered pursuant hereto, shall be
maintained in confidence by all parties.

(g) Continued Performance. The fact that the dispute
resolution procedures specified in this Section 12.20 shall have been
or may be invoked shall not excuse any party from performing its
obligations under this Agreement and during the pendency of any such
procedure all parties shall continue to perform their respective
obligations in good faith, subject to any rights to terminate this
Agreement that may be available to any party.

(h) Tolling. All applicable statutes of limitations shall
be tolled while the procedures specified in this Section 12.20 are
pending. The parties will take such action, if any, required to
effectuate such tolling.

12.21. ACCOUNTING DATE. The transactions contemplated hereby shall be
effective for accounting purposes as of 12:01 a.m. Central Time on the Closing
Date, unless otherwise agreed in writing by Sellers and Buyer.

12.22. NO INFERENCES. Inasmuch as this Agreement is the result of
negotiations between sophisticated parties of equal bargaining power represented
by counsel, no inference in favor of, or against, either party shall be drawn
from the fact that any portion of this Agreement has been drafted by or on
behalf of such party.

12.23. NO THIRD PARTY BENEFICIARIES. The terms and provisions of this
Agreement are intended solely for the benefit of Buyer and Sellers and their
respective permitted successors or assigns, and it is not the intention of the
parties to confer, and this Agreement shall not confer, third-party beneficiary
rights upon any other person.

12.24. ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the

parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of competent jurisdiction, this being in addition to any other remedy
to which they are entitled at law or in equity.

12.25. ENTIRE AGREEMENT; AMENDMENT. Except for the Non-Disclosure and
Non-Solicitation Agreement dated September 18, 2003 which remains in full force
and affect according to its terms, this Agreement supersedes all previous
contracts or understandings, including any offers, letters of intent, proposals
or letters of understanding, and constitutes the entire agreement of whatsoever
kind or nature existing between or among the parties respecting the within
subject matter, and no party shall be entitled to benefits other than those
specified herein. Notwithstanding the foregoing, the parties hereto acknowledge
that Buyer and certain Affiliates of the Sellers are party to an asset purchase
agreement of even date herewith. As between or among the parties, no oral
statements or prior written material not specifically incorporated herein shall
be of any force and effect. The parties specifically acknowledge that in
entering into and executing this Agreement, the parties rely solely upon the
representations and agreements contained in this Agreement and no others. All
prior representations or agreements, whether written or verbal, not expressly
incorporated herein are superseded, and no changes in or additions to this
Agreement shall be recognized unless and until they are made in writing and
signed by all parties hereto. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.

12.26. RISK OF LOSS. Notwithstanding any other provision hereof to
the contrary, the risk of loss in respect of casualty to the Assets shall be
borne by Sellers prior to the time of Closing and by Buyer thereafter.

12.27. OTHER OWNERS OF ASSETS. The parties acknowledge that certain
Assets may be owned by Affiliates of Sellers and not Sellers. Notwithstanding
the foregoing, and for purposes of all representations, warranties, covenants
and agreements contained herein, Sellers agree that (i) its obligations with
respect to any Assets shall be joint and several with any Affiliate which owns
or controls such Assets, (ii) the representations and warranties herein, to the
extent applicable, shall be deemed to have been made by, on behalf of and with
respect to, such Affiliates in their ownership capacity, and (iii) it has the
legal capacity to cause, and it shall cause, any Affiliate which owns or
controls any Assets to meet all of Sellers' obligations under this Agreement
with respect to such Assets. Sellers hereby waive any defense to a claim made by
Buyer under this Agreement based on the failure of any person who owns or
controls the Assets to be a party to this Agreement.

12.28. TRANSFER, SALES AND OTHER TAXES. Any transfer, use or sales
taxes due as a result of the purchase, sale, use or transfer of the Assets
arising out of this transaction, if any, will be paid by Sellers. Any state or
local deed, stamp, or other tax associated with or assessed in connection with
the conveyance of any of the Assets, if any, will be paid by Sellers.

12.29. PRORATIONS. All of the costs that are directly attributable to
the conduct of the business and operations of the Facilities and the Assets
transferred to Buyer shall be prorated between Sellers and Buyer as of the
Closing Date. These costs shall include, but not be limited to,

all personal property taxes, real estate taxes and assessments and other taxes
imposed upon or assessed against the Real Property ("REAL ESTATE TAXES").
Sellers shall pay all Real Estate Taxes for the years prior to the year in which
Closing occurs. In the event Real Estate Taxes for the year in which Closing
occurs are not payable or determinable at the time of Closing, Real Estate Taxes
shall be prorated on the basis of the most currently available information. In
the event that after Closing it is determined that the actual Real Estate Taxes
for the year in which Closing occurs exceed such estimated amount ("TAX EXCESS")
or are less than such estimated amount ("TAX REFUND") on which such proration is
based, then (i) Sellers shall pay its pro rata share of any Tax Excess promptly
upon receipt from Buyer of Notice of such Tax Excess after its receipt of the
tax bills for Real Estate Taxes for the year in which Closing occurs or (ii)
Buyer shall refund and pay to Sellers its pro rata share of any Tax Refund
promptly after its receipt of such tax bills.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in multiple originals by their authorized officers, all as of the date
first above written.

PSYCHIATRIC SOLUTIONS, INC.

By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Title: Chief Development Officer, Secretary

BRENTWOOD HEALTH MANAGEMENT OF MS, LLC

By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Title: Member

XXXXXX-XXXXXXX OF MISSISSIPPI, LLC

By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Title: Member

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