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                                                                   Exhibit 10.69

                           PURCHASE AND SALE AGREEMENT

                                  BY AND AMONG

                       MPT OPERATING PARTNERSHIP, L.P. AND

                            MPT OF SHERMAN OAKS, LLC

                    (COLLECTIVELY, THE "PURCHASER PARTIES");

                                       AND

                       PRIME HEALTHCARE SERVICES II, LLC,

                          PRIME A INVESTMENTS, L.L.C.,

                        PRIME HEALTHCARE SERVICES, INC.,

                          DESERT VALLEY HOSPITAL, INC.,

                                       AND

                        DESERT VALLEY MEDICAL GROUP, INC.

                      (COLLECTIVELY, THE "SELLER PARTIES ")

                         DATED AS OF December 30, 2005


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                                Table of Contents

<TABLE>
<S>                                                                           <C>
ARTICLE I DEFINED TERMS....................................................    2
   Section 1.1.   Certain Defined Terms....................................    2
   Section 1.2.   Interpretation; Terms Generally..........................    9

ARTICLE II PURCHASE AND SALE OF ASSETS, ASSUMPTION OF LIABILITIES..........   10
   Section 2.1.   Purchase and Sale of Assets..............................   10
   Section 2.2.   Excluded Liabilities.....................................   10

ARTICLE III PURCHASE PRICE.................................................   11
   Section 3.1.   Purchase Price...........................................   11
   Section 3.2.   Taxes, Rentals, Utilities................................   11
   Section 3.3.   Allocation of Purchase Price.............................   11

ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
           PARTIES.........................................................   11
   Section 4.1.   Organization.............................................   11
   Section 4.2.   Authorization and Enforceability.........................   11
   Section 4.3.   Absence of Conflicts.....................................   12
   Section 4.4.   Consents and Approvals...................................   12
   Section 4.5.   Financial Statements.....................................   12
   Section 4.6.   No Undisclosed Liabilities...............................   13
   Section 4.7.   Accounts Receivable......................................   13
   Section 4.8.   Absence of Changes.......................................   13
   Section 4.9.   Licenses.................................................   15
   Section 4.10.  Accreditation; Medicare and Medicaid; Third Party
                     Payors................................................   15
   Section 4.11.  HIPAA Compliance.........................................   16
   Section 4.12.  Healthcare Regulatory Matters............................   16
   Section 4.13.  Taxes....................................................   18
   Section 4.14.  Good Title to Assets.....................................   18
   Section 4.15.  Title and Condition of the Real Property.................   18
   Section 4.16.  Condition of Personal Property...........................   20
   Section 4.17.  Compliance with Environmental Laws.......................   21
   Section 4.18.  Insurance................................................   22
   Section 4.19.  Litigation...............................................   22
   Section 4.20.  Contracts, Obligations and Commitments...................   23
   Section 4.21.  Employees and Employee Relations.........................   23
   Section 4.22.  Intangible Property......................................   24
   Section 4.23.  Compliance with Law......................................   24
   Section 4.24.  Hill Burton Obligations..................................   25
   Section 4.25.  Medical Staff Matters....................................   25
   Section 4.26.  Brokers..................................................   25
   Section 4.27.  Records..................................................   25
   Section 4.28.  Existing Leases..........................................   25
   Section 4.29.  Representations Complete.................................   26
</TABLE>


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                                Table of Contents

<TABLE>
<S>                                                                           <C>
ARTICLE V REPRESENTATIONS AND WARRANTIES BY THE PURCHASER PARTIES..........   26
   Section 5.1.   Organization.............................................   26
   Section 5.2.   Authorization; Enforcement, Absence of Conflicts.........   26
   Section 5.3.   Binding Agreement........................................   27
   Section 5.4.   Litigation...............................................   27
   Section 5.5.   Brokers..................................................   27
   Section 5.6.   Compliance with Law......................................   27

ARTICLE VI TITLE AND SURVEY................................................   27
   Section 6.1.   Survey...................................................   27
   Section 6.2.   Title Insurance..........................................   28

ARTICLE VII PRE-CLOSING COVENANTS..........................................   28
   Section 7.1.   No Shop..................................................   28
   Section 7.2.   Access; Confidentiality..................................   29
   Section 7.3.   Schedule Updates.........................................   30
   Section 7.4.   Conduct of Business by the Seller Parties Pending the
                     Closing...............................................   30
   Section 7.5.   Cooperation..............................................   31
   Section 7.6.   Regulatory and other Authorizations, Notices and
                     Consents..............................................   31
   Section 7.7.   Mutual Covenants.........................................   32
   Section 7.8.   Public Announcements.....................................   32

ARTICLE VIII CLOSING CONDITIONS............................................   33
   Section 8.1.   Conditions to the Obligations of the Seller Parties......   33
   Section 8.2.   Conditions to the Obligations of the Purchaser Parties...   33

ARTICLE IX CLOSING.........................................................   34
   Section 9.1.   Closing Date.............................................   34
   Section 9.2.   The Seller Parties' Closing Date Deliverables............   34
   Section 9.3.   Purchaser Parties' Closing Date Deliverables.............   36

ARTICLE X TERMINATION......................................................   37
   Section 10.1.  Termination..............................................   37
   Section 10.2.  Notice and Effect........................................   37

ARTICLE XI CERTAIN POST-CLOSING COVENANTS..................................   38
   Section 11.1.  Post-Closing Access to Information.......................   38
   Section 11.2.  Licensure................................................   38
   Section 11.3.  Sherman Oaks Purchase Agreement Indemnification..........   38

ARTICLE XII INDEMNIFICATION................................................   39
   Section 12.1.  The Seller Parties' Agreement to Indemnify...............   39
   Section 12.2.  The Purchaser Parties' Agreement to Indemnify............   39
   Section 12.3.  Notification and Defense of Claims.......................   40
   Section 12.4.  Investigations...........................................   41
</TABLE>


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                                Table of Contents

<TABLE>
<S>                                                                           <C>
   Section 12.5.  Treatment of Indemnification Payments....................   41
   Section 12.6.  Exclusive Remedy.........................................   42
   Section 12.7.  Limitation of Liability of Seller Parties................   42

ARTICLE XIII DISPUTE RESOLUTION............................................   42
   Section 13.1.  Governing Law............................................   42
   Section 13.2.  Jurisdiction and Venue...................................   42

ARTICLE XIV MISCELLANEOUS..................................................   43
   Section 14.1.  Assignment...............................................   43
   Section 14.2.  Notice...................................................   43
   Section 14.3.  Calculation of Time Period...............................   44
   Section 14.4.  Captions.................................................   44
   Section 14.5.  Entire Agreement; Modification...........................   44
   Section 14.6.  Schedules and Exhibits...................................   44
   Section 14.7.  Further Assurances.......................................   44
   Section 14.8.  Counterparts.............................................   44
   Section 14.9.  Expenses.................................................   44
   Section 14.10. Syndication..............................................   45
   Section 14.11. Securities Offering and Filings..........................   45
   Section 14.12. Binding Effect...........................................   45
</TABLE>


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                           PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered into as
of December 30, 2005 by and among MPT OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership ("MPT"), and MPT OF SHERMAN OAKS, LLC, a Delaware limited
liability company (the "Acquisition Sub") (MPT and the Acquisition Sub being
herein referred to, collectively, as the "Purchaser Parties"); and PRIME
HEALTHCARE SERVICES II, LLC, a Delaware limited liability company ("Desert
Valley Operator"), PRIME A INVESTMENTS, L.L.C., a Delaware limited liability
company ("Prime A"), PRIME HEALTHCARE SERVICES, INC., a Delaware corporation
("Desert Valley Parent"), DESERT VALLEY HOSPITAL, INC., a California corporation
("Desert Valley Hospital"), and DESERT VALLEY MEDICAL GROUP, INC., a California
corporation (Desert Valley Operator, Prime A, Desert Valley Parent, Desert
Valley Hospital and Desert Valley Medical Group, Inc., being collectively
referred to herein as the "Seller Parties").

                                   WITNESSETH:

WHEREAS, Desert Valley Operator and Prime A are parties to that certain Asset
Purchase Agreement dated September 21, 2005 between Sherman Oaks Health System
("Sherman Oaks"), the subsidiaries of Sherman Oaks, Desert Valley Operator and
Prime A (the "Sherman Oaks Purchase Agreement") pursuant to which Sherman Oaks
has agreed to sell and assign to Desert Valley Operator and Prime A, and Desert
Valley Operator and Prime A have agreed to purchase and assume from Sherman
Oaks, certain assets related to the Sherman Oaks Hospital located in Sherman
Oaks, California (the "Hospital"), including the Real Property (as hereinafter
defined), as well as Sherman Oaks' leasehold interest in the Landlord Leases (as
hereinafter defined);

WHEREAS, pursuant to that certain Amended and Restated Air Space Agreement,
dated March 1, 1995, between Trustee in Bankruptcy for Triad and G&L Medical
Partnership, L.P. ("G&L"), as assigned to Desert Valley Operator (the "Air Space
Agreement"), Desert Valley Operator leases to G&L certain air space above a
portion of the Real Property for the operation of a parking facility and
subleases back from G&L Medical Partnership, L.P. twenty (20) parking spaces;

WHEREAS, subject to the terms and conditions hereinafter set forth, Seller
Parties desire to sell and assign to the Acquisition Sub, and the Acquisition
Sub desires to purchase and assume from Seller Parties, the Real Property and
certain other assets associated or used in connection with the Hospital, all on
the terms and conditions set forth in this Agreement;

WHEREAS, contemporaneously with the closing of such purchase and sale, Desert
Valley Operator shall lease back the Real Property from the Acquisition Sub
pursuant to a lease in the form of EXHIBIT A hereto (the "Lease"); and

WHEREAS, until its change in ownership application is approved by the California
Department of Health Services ("DHS"), Desert Valley Operator intends to
sublease the Real Property and

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other assets back to Sherman Oaks and to operate the same for Sherman Oaks
pursuant to the terms and conditions of the Management Agreement (as hereinafter
defined).

NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

                                    ARTICLE I

                                  DEFINED TERMS

SECTION 1.1. CERTAIN DEFINED TERMS. Capitalized terms used herein shall have the
respective meanings ascribed to them in this Section 1.1.

"Acquisition Sub" shall have the meaning set forth in the preamble to this
Agreement.

"Affiliate" "means, with respect to any Person (i) any Person that, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (ii) any other Person that owns, beneficially, directly or indirectly,
10% or more of the outstanding capital stock, shares or equity interests of such
Person, or (iii) any officer, director, employee, partner, member, manager or
trustee of such Person or any Person controlling, controlled by or under common
control with such Person (excluding trustees and persons serving in similar
capacities who are not otherwise an Affiliate of such Person). For the purposes
of this definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities or otherwise.

"Agreement" shall have the meaning set forth in the preamble to this Agreement.

"Air Space Agreement" shall have the meaning set forth in the recitals to this
Agreement.

"Appraisal" means that certain appraisal of the Real Property in form and
substance, and prepared by a Person, satisfactory to MPT in its sole discretion.

"Appraised Value" means the fair market value of the Real Property as set forth
in the Appraisal.

"Assets" shall have the meaning set forth in Section 2.1 hereof.

"Assumed Liabilities" shall have the meaning set forth in Section 2.2 hereof.

"Balance Sheet" shall have the meaning set forth in Section 4.5 hereof.

"Balance Sheet Date" shall have the meaning set forth in Section 4.5 hereof.

"Business" means the operation of the Hospital and the engagement in and pursuit
and conduct of any business venture or activity related thereto.


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"Business Day" means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York, New York are
authorized or required by law, regulation or executive order to close.

"Business Employee" shall have the meaning set forth in Section 4.21 hereof.

"CMS" means the Centers for Medicare and Medicaid Services.

"Claim" shall have the meaning set forth in Section 4.19 hereof.

"Closing" shall have the meaning set forth in Section 9.1 hereof.

"Closing Date" shall have the meaning set forth in Section 9.1 hereof.

"Code" means the United States Internal Revenue Code of 1986, as amended through
the date hereof, and all regulations thereunder. Any reference herein to a
specific section or sections of the Code shall be deemed to include a reference
to any corresponding provision of future law.

"Confidentiality Agreement" shall have the meaning set forth in Section 7.2(c)
hereof.

"Contracts" shall have the meaning set forth in Section 4.20 hereof.

"Deed" shall have the meaning set forth in Section 9.2(b) hereof.

"DHS" shall have the meaning set forth in the recitals to this Agreement.

"Desert Valley Hospital" shall have the meaning set forth in the preamble to
this Agreement.

"Desert Valley Operator" shall have the meaning set forth in the preamble to
this Agreement.

"Desert Valley Parent" shall have the meaning set forth in the preamble to this
Agreement.

"Environmental Claim" means any Claim, action, cause of action, investigation or
notice (written or oral) by any Governmental Entity or other Person alleging
actual or potential liability for investigatory, cleanup or governmental
response costs, or natural resources or property damages, or personal injuries,
attorney's fees or penalties relating to (i) the presence, or release into the
environment, of any Hazardous Materials at the Real Property, now or in the
past, or (ii) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.

"Environmental Law" means each federal, state, local and foreign law and
regulation relating to pollution, protection or preservation of human health or
the environment, including ambient air, surface water, ground water, land
surface or subsurface strata, and natural resources, and including each law and
regulation relating to emissions, discharges, releases or threatened releases of
Hazardous Materials, or otherwise relating to the manufacturing, processing,
distribution, use, treatment, generation, storage, containment (whether above
ground or underground), disposal, transport or handling of Hazardous Materials,
or the preservation of the environment or mitigation of adverse effects thereon
and each law and regulation with regard to


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record keeping, notification, disclosure and reporting requirements respecting
Hazardous Materials, including, without limitation, the Resource Conservation
and Recovery Act of 1976, the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, the Hazardous Materials Transportation Act, the
Federal Water Pollution Control Act, the Clean Air Act, the Clean Water Act, the
Toxic Substances Control Act, the Safe Drinking Water Act, and all similar
federal, state and local environmental statutes, ordinances and the regulations,
orders, or decrees now or hereafter promulgated thereunder, in each case as
amended from time to time.

"Equity Constituents" means, with respect to any Person, as applicable, the
members, general or limited partners, shareholders, stockholders or other
Persons, however designated, who are the owners of the issued and outstanding
equity or ownership interests of such Person.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Exception Documents" means true, correct, current and legible copies of each
document listed as an exception to title on the Title Commitment.

"Excluded Liabilities" shall have the meaning set forth in Section 2.2 hereof.

"Existing Leases" means those certain lease agreements in effect as of the date
hereof (other than the Lease) between Affiliates of MPT and Affiliates of Desert
Valley Parent.

"Expansion Commitment Letter" shall have the meaning set forth in Section 9.2(x)
hereof.

"Financial Statements" shall have the meaning set forth in Section 4.5 hereof.

"Fixtures" means all permanently affixed non-medical equipment, machinery,
fixtures, and other items of real property, including all components thereof,
now and hereafter located in, on or used in connection with, and permanently
affixed to or incorporated into the Improvements, including, without limitation,
all furnaces, boilers, heaters, electrical equipment, heating, plumbing,
lighting, ventilating, refrigerating, incineration, air and water pollution
control, waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, and built-in vacuum,
cable transmission, oxygen and similar systems, all of which, to the greatest
extent permitted by law, are hereby deemed by the parties hereto to constitute
real estate, together with all replacements, modifications, alterations and
additions thereto.

"G&L" shall have the meaning set forth in the recitals to this Agreement.

"GAAP" means United States generally accepted accounting principles as in effect
from time to time. Any accounting term used herein and not specifically defined
herein shall be construed in accordance with GAAP.

"Governing Documents" means, with respect to any Person, as applicable, such
Person's charter, articles or certificate of incorporation, formation or
organization, bylaws or other documents or instruments which establish and/or
set forth the rules, procedures and rights with respect to such Person's
governance, including, without limitation, any stockholders, limited liability
company,


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operating or partnership agreement related to such Person, in each case as
amended, restated, supplemented and/or modified and in effect as of the relevant
date.

"Governmental Entity" means any national, federal, regional, state, local,
provincial, municipal, foreign or multinational court or other governmental or
regulatory authority, administrative body or government, department, board,
body, tribunal, instrumentality or commission.

"Government Programs" shall have the meaning set forth in Section 4.10 hereof.

"Hazardous Materials" means any substance deemed hazardous under any
Environmental Law, including, without limitation, asbestos or any substance
containing asbestos, the group of organic compounds known as polychlorinated
biphenyls, flammable explosives, radioactive materials, infectious wastes,
biomedical and medical wastes, chemicals known to cause cancer or reproductive
toxicity, lead and lead-based paints, radon, pollutants, effluents,
contaminants, emissions or related materials and any items included in the
definition of hazardous or toxic wastes, materials or substances under any
Environmental Law.

"Healthcare Fraud Laws" shall have the meaning set forth in Section 4.12(a)
hereof.

"HIPAA" shall have the meaning set forth in Section 4.11 hereof.

"Hospital" shall have the meaning set forth in the recitals to this Agreement.

"Improvements" means all buildings, improvements, structures and Fixtures now or
on the Closing Date located on the Land, including, without limitation,
landscaping, parking lots and structures, roads, drainage and all above ground
and underground utility structures, equipment systems and other so-called
"infrastructure" improvements.

"Indebtedness" of any Person means, without duplication, (a) all liabilities and
obligations, contingent or otherwise, of such Person: (i) in respect of borrowed
money (whether secured or unsecured), (ii) under conditional sale or other title
retention agreements relating to property or services purchased and/or sold by
such Person, (iii) evidenced by bonds, notes, debentures or similar instruments,
(iv) for the payment of money relating to a capitalized lease obligation, (v)
evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit, (vi) pursuant to any guarantee, or (vii)
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) a Lien on the assets or property of
such Person, and (b) all liabilities and obligations of others of the kind
described in the preceding clause (a) and otherwise that (i) such Person is
responsible or liable for, directly or indirectly, as obligor, guarantor, surety
or otherwise, or (ii) which are secured by a Lien on any of the assets or
property of such Person.

"Indemnified Party" shall have the meaning set forth in Section 12.3(a) hereof.

"Indemnifying Party" shall have the meaning set forth in Section 12.3(a) hereof.

"Intangible Property" shall have the meaning set forth in Section 4.22 hereof.

"JCAHO" shall have the meaning set forth in Section 4.10 hereof.


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"Knowledge," "to the knowledge or best knowledge of" or similar words or phrases
means, with respect to any Person, such Person's actual or deemed knowledge of a
particular fact or matter if any of such Person's current or former officers or
directors (or other Persons however denominated, currently or formerly
exercising similar authority with respect to such Person) (a Person's "Knowledge
Group"), including, but not limited to, in the case of the Seller Parties, Prem
Reddy, M.D. and/or Lex Reddy, has actual knowledge of such fact or matter.

"Land" shall have the meaning set forth in Section 2.1(a) hereof.

"Landlord Leases" means those certain leases set forth on EXHIBIT B hereto,
pursuant to which Desert Valley Operator or Sherman Oaks Medical Group
Management, Inc., a California professional corporation, as tenant, leases
certain property or space related to the Business.

"Law" means any federal, state or local statute, rule, regulation, ordinance,
order, code, policy or rule of common law, now or hereafter in effect, and in
each case as amended, and any judicial or administrative interpretation thereof
by a Governmental Entity or otherwise, including, without limitation, any
judicial or administrative order, consent, decree or judgment.

"Lease" shall have the meaning set forth in the recitals to this Agreement.

"Lien" means any mortgage, adverse Claim, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, lien (statutory or otherwise) or
preference, security interest or other encumbrance of any kind or nature
whatsoever.

"Management Agreement" means that certain Interim Management Agreement dated as
of the closing date by and between the Desert Valley Operator and Sherman Oaks.

"Material Adverse Effect" means, with respect to any Person, any change,
event(s), occurrence(s) or effect(s), whether direct or indirect, that, both
before and after giving effect to the transactions contemplated by this
Agreement, could, individually or in the aggregate, have a material adverse
effect on (i) the business, properties, results of operations, assets, revenue,
income, prospects or condition (financial or otherwise) of, or the ability to
timely satisfy the obligations or liabilities (whether absolute or contingent)
of, such Person, (ii) such Person's business or assets, or (iii) the ability of
such Person to perform its obligations under, and/or consummate the transactions
contemplated by, this Agreement within the time periods specified herein.

"Medicaid" shall have the meaning set forth in Section 4.10 hereof.

"Medi-Cal" shall have the meaning set forth in Section 4.10 hereof.

"Medicare" shall have the meaning set forth in Section 4.10 hereof.

"Minimum Aggregate Liability Amount" shall have the meaning set forth in Section
12.1(b) hereof.

"MPT" shall have the meaning set forth in the recitals to this Agreement.


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"Permitted Encumbrances" means (i) Liens for or arising from current taxes not
yet due and payable; (ii) easements and other restrictions of record; (iii)
matters set forth in the Title Commitment issued by the Title Company; (iv)
matters disclosed on the Survey; and (v) other matters, encumbrances and defects
approved by MPT in writing.

"Permits" shall have the meaning set forth in Section 4.9 hereof.

"Person" means an individual, a corporation, a limited liability company, a
partnership, an unincorporated association, a joint venture, a Governmental
Entity or another entity or group.

"Personal Property" shall have the meaning set forth in Section 4.16 hereof.

"Personal Property Leases" shall have the meaning set forth in Section 4.16
hereof.

"Physician" means any physician rendering services, within, at or on the
Hospital or its premises within the five (5) year period ending on the date of
this Agreement.

"Plan" shall have the meaning set forth in Section 4.21 hereof.

"Prime A" shall have the meaning set forth in the preamble to this Agreement.

"Public Taking" shall means any condemnation, requisition or other taking by any
Governmental Entity.

"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.

"Purchaser Damages" shall have the meaning set forth in Section 12.1(a) hereof.

"Purchaser Parties" shall have the meaning set forth in the preamble to this
Agreement.

"Purchaser Indemnified Party" shall have the meaning set forth in Section
12.1(a).

"Purchaser's Indemnity Periods" shall have the meaning set forth in Section
12.1(b) hereof.

"Real Property" shall have the meaning set forth in Section 2.1(b) hereof.

"Search Reports" means reports of searches made of the uniform commercial code
records of the county in which the Real Property is located, and of the office
of the secretary of state of the state in which the Real Property is located and
in the state in which the principal office of the Seller Parties is located.

"Seller Damages" shall have the meaning set forth in Section 12.2(a) hereof.

"Seller Indemnified Parties" shall have the meaning set forth in Section 12.2(a)
hereof.

"Seller Indemnity Period" shall have the meaning set forth in Section 12.2(b)
hereof.

"Seller Party Instruments" shall have the meaning set forth in Section 4.2
hereof.


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"Seller Parties" shall have the meaning set forth in the preamble to this
Agreement.

"Service Provider" means any Person who has rendered or is rendering services to
or on behalf of Desert Valley Parent or any of its Subsidiaries.

"Sherman Oaks" shall have the meaning set forth in the recitals to this
Agreement.

"Sherman Oaks Claim" shall have the meaning set forth in Section 11.3 hereof.

"Sherman Oaks Purchase Agreement" shall have the meaning set forth in Section
11.3 hereof.

"Special Purpose Entity" means an entity which (i) exists solely for the purpose
of owning and/or leasing all or any portion of the Real Property and conducting
the operation of the Business, (ii) conducts business only in its own name,
(iii) does not engage in any business other than the ownership and/or leasing
all or any portion of the Real Property and the operation of the Business, (iv)
does not hold, directly or indirectly, any ownership interest (legal or
equitable) in any entity or any real or personal property other than the
interest which it owns in the Real Property and the other assets incident to the
operation of the Business, (v) does not have any debt other than as permitted by
the Lease or arising in the ordinary course of the Business and does not
guarantee or otherwise obligate itself with respect to the debts of any other
Person other than as approved by MPT, (vi) has its own separate books, records,
accounts, financial statements and tax returns (with no commingling of funds or
assets), (vii) holds itself out as being a company separate and apart from any
other entity, (viii) maintains all corporate formalities independent of any
other entity.

"Subsidiary" means with respect to Desert Valley Parent, those certain
subsidiaries of Desert Valley Parent listed and described on SCHEDULE 4.1 hereto
and with respect to any Person, any other Person of or with respect to which
Fifty Percent (50%) or more of the total voting power of the voting securities
is beneficially owned by such Person.

"Survey" means a current "as-built" ALTA survey, certified to ALTA requirements,
prepared by an engineer or surveyor licensed in the state in which the Real
Property is located acceptable to MPT in its sole discretion, which shall be
prepared in accordance with the provisions set forth in Section 6.1 of this
Agreement.

"Taxes" means any and all taxes, charges, fees, levies or other assessments,
including, without limitation, any and all income, gross receipts, excise, real
and personal property (including leaseholds and interests in leaseholds), sales,
use, occupation, transfer, license, ad valorem, gains, profits, gift, minimum
estimated, social security, unemployment, disability, premium, recapture,
credit, payroll, withholding, severance, stamp, capital stock, value added
leasing, franchise and other taxes or similar charges of any kind including any
interest and penalties on or additions thereto or attributable to any failure to
comply with any requirement regarding any Tax Return.

"Tax Return" means any return, declaration, filing, report, claim for refund or
information return or other statement relating to Taxes (whether filed with or
submitted to, or required to be filed with or submitted to, any Governmental
Entity), including any schedule or attachment thereto, and including any
amendment or extension thereof.


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"Tax Structure" shall have the meaning set forth in Section 7.2(c) hereof.

"Tax Treatment" shall have the meaning set forth in Section 7.2(c) hereof.

"Tenant" means the lessees or tenants under the Tenant Leases (as hereinafter
defined), if any.

"Tenant Leases" shall have the meaning set forth in Section 4.15(i) hereof.

"Third Party Claim" shall have the meaning set forth in Section 12.3(a) hereof.

"Title Commitment" means a current commitment issued by the Title Company to the
Purchaser Parties pursuant to the terms of which the Title Company shall commit
to issue the Title Policy to the Purchaser Parties in accordance with the
provisions of this Agreement, and reflecting all matters which would be listed
as exceptions to coverage on the Title Policy.

"Title Company" means the national service office of a title insurance company
licensed in the state in which the Real Property is located and selected by MPT
in its sole discretion.

"Title Policy" means a title insurance policy in form and substance satisfactory
to MPT in its sole discretion.

"Warranties" means all warranties, representations and guaranties with respect
to any of the Assets, whether express or implied, which the Seller Parties now
hold or under which the Seller Parties are the beneficiary.

SECTION 1.2. INTERPRETATION; TERMS GENERALLY. The definitions set forth in
Section 1.1 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. Unless otherwise indicated, the words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
The words "herein", "hereof" and "hereunder" and words of similar import shall
be deemed to refer to this Agreement (including the Schedules and Exhibits) in
its entirety and not to any part hereof, unless the context shall otherwise
require. All references herein to Articles, Sections, Schedules and Exhibits
shall be deemed to refer to Articles, Sections and Schedules of, and Exhibits
to, this Agreement, unless the context shall otherwise require. Unless the
context shall otherwise require, any references to any agreement or other
instrument or statute or regulation are to it as amended and supplemented from
time to time (and, in the case of a statute or regulation, to any corresponding
provisions of successor statutes or regulations). Any reference in this
Agreement to a "day" or number of "days" that does not refer explicitly to a
"Business Day" or "Business Days" shall be interpreted as a reference to a
calendar day or number of calendar days. If any action or notice is to be taken
or given on or by a particular calendar day, and such calendar day is not a
Business Day, then such action or notice shall be deferred until, or may be
taken or given on, the next Business Day.


                                        9

<PAGE>

                                   ARTICLE II

             PURCHASE AND SALE OF ASSETS, ASSUMPTION OF LIABILITIES

SECTION 2.1. PURCHASE AND SALE OF ASSETS. Based upon the representations and
warranties of the Seller Parties as set forth herein, and subject to the terms
and conditions hereof, at the Closing, the Seller Parties, in consideration for
the payment of the Purchase Price in accordance with Section 3.1, shall grant,
sell, assign, transfer, convey and deliver to the Acquisition Sub, and the
Acquisition Sub shall purchase and acquire from the Seller Parties, free and
clear of all Liens, other than Permitted Encumbrances, the following assets of
the Seller Parties to the extent the Seller Parties have an interest therein
(collectively, the "Assets"):

(a) those certain tracts of land consisting of approximately 3.7 acres
located in Sherman Oaks, California the legal descriptions of which are set
forth on EXHIBIT C attached hereto (the "Land") and all Improvements located
thereon (collectively the "Real Property");

(b) all of the Seller Parties' rights under and interest in the Air Space
Agreement;

(c) to the extent assignable, all of Seller Parties' rights in all intangible
property relating exclusively to the Real Property, including, but limited to,
zoning rights, Permits and indemnification or similar rights and all Warranties
affecting or inuring to the benefit of the Real Property or the owner thereof
(including, without limitation, any indemnification or similar rights and
Warranties related to the Real Property);

(d) all of the Seller Parties' right, title and interest in and to site plans,
surveys, soil and substrata studies, architectural drawings, plans and
specifications, inspection reports, engineering and environmental plans and
studies, title reports, floor plans, landscape plans and other plans relating to
the Real Property and the Improvements; and

(e) all of the Seller Parties' right, title and interest in and to all causes of
action, claims and rights in litigation (or which could result in litigation
against any party) pertaining or relating to the Real Property (including,
without limitation, any causes of action, claims or rights in litigation or
other rights related to or arising under any purchase contracts (including,
without limitation, all of Seller Parties' rights to indemnification and claims
for breach or default under the Sherman Oaks Purchase Agreement) respecting the
Real Property).

SECTION 2.2. EXCLUDED LIABILITIES. Notwithstanding anything in this Agreement to
the contrary, except as set forth on SCHEDULE 2.2 (the "Assumed Liabilities") no
Purchaser Party shall assume or agree to pay, satisfy, discharge or perform, or
shall be deemed by virtue of the execution and delivery of this Agreement or any
other document delivered at the Closing pursuant to this Agreement, or as a
result of the consummation of the transactions contemplated by this Agreement or
such other document, to have assumed, or to have agreed to pay, satisfy,
discharge or perform, or shall be liable for, any liability, obligation,
contract or Indebtedness of the Seller Parties or any other Person, whether
primary or secondary, direct or indirect, including, without limitation, any
liability or obligation relating to the ownership, use or operation of any of
the Assets or the Hospital prior to Closing, any liability or obligation arising
out of or related to any breach, default, tort or similar act committed by a
Seller Party or for any


                                       10

<PAGE>

failure of a Seller Party to perform any covenant or obligation for or during
any period prior to Closing, and any liability arising out of the ownership and
operation of the Assets and the Hospital by Sherman Oaks or any other Person
prior to Closing (collectively, the "Excluded Liabilities").

                                   ARTICLE III

                                 PURCHASE PRICE

SECTION 3.1. PURCHASE PRICE. Subject to obtaining the Appraisal in accordance
with Section 8.2(m) hereof and subject to adjustment as provided herein, the
purchase price for the Assets shall be Twenty Million and No/100 Dollars
($20,000,000.00) (the "Purchase Price"). Subject to the terms and conditions
hereof, at Closing, the Acquisition Sub shall pay the Purchase Price via wire
transfer of immediately available federal funds to an account specified in
writing by Desert Valley Parent not less than three (3) Business Days prior to
the Closing Date.

SECTION 3.2. TAXES, RENTALS, UTILITIES. The parties acknowledge that all utility
charges and all real and personal property Taxes related to the Assets shall be
the responsibility of Desert Valley Operator pursuant to the terms of the Lease.

SECTION 3.3. ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets for purposes of Section 1060 of the Code as set forth on
SCHEDULE 3.3. The parties agree to use, and to not take any position which is
inconsistent with, such allocation in the preparation and filing of any Tax
Return (including Form 8594).

                                   ARTICLE IV

                    REPRESENTATIONS, WARRANTIES AND COVENANTS
                              OF THE SELLER PARTIES

With the understanding that the Purchaser Parties shall rely hereon, and as a
material inducement to the Purchaser Parties to enter into this Agreement and
the Lease, the Seller Parties hereby jointly and severally represent, warrant
and covenant to the Purchaser Parties as of the date hereof and as of the
Closing Date as follows:

SECTION 4.1. ORGANIZATION. Each Seller Party is a corporation or limited
liability company duly organized, validly existing and in good standing under
the laws of their respective states of incorporation and is duly licensed in
each jurisdiction in which the nature of the business conducted, or the assets
owned, operated and/or leased, by such Seller Party requires or makes such
qualification necessary. Desert Valley Operator is, and has at all times since
its incorporation been, a Special Purpose Entity. SCHEDULE 4.1 sets forth the
ownership of each Seller Party and, except as set forth therein, no other party
has any equity interest in any Seller Party or any option, warrant or other
right to acquire same.

SECTION 4.2. AUTHORIZATION AND ENFORCEABILITY. Each Seller Party has the
requisite corporate or limited liability company power and authority to conduct
its business as it is now being conducted and as proposed to be conducted and to
execute, deliver and carry out the terms of the Sherman Oaks Purchase Agreement
(if it is a party thereto) and this Agreement, together with all


                                       11

<PAGE>

documents and agreements necessary to give effect to the provisions of the
Sherman Oaks Purchase Agreement (if it is a party thereto) and this Agreement,
including the Lease, and to consummate the transactions contemplated hereby and
thereby. All corporate or limited liability company actions required to be taken
by a Seller Party (including, without limitation, all necessary actions by the
manager, members, board of directors and/or shareholders of such Seller Party)
to authorize the execution, delivery and performance of the Sherman Oaks
Purchase Agreement (if it is a party thereto), this Agreement, and all other
documents, agreements and instruments executed by such Seller Party which are
necessary to give effect to the Sherman Oaks Purchase Agreement (if it is a
party thereto) and this Agreement (collectively, the "Seller Party Instruments")
and all transactions contemplated hereby and thereby, have been duly and
properly taken or obtained in accordance and compliance with, as applicable,
such Seller Party's Governing Documents. Each Seller Party has heretofore
delivered to the Purchaser Parties true, correct and complete copies of such
Seller Party's Governing Documents. No other action on the part of any Seller
Party is necessary to authorize the execution, delivery and performance of the
Sherman Oaks Purchase Agreement (if it is a party thereto), this Agreement, the
Seller Party Instruments and all transactions contemplated hereby and thereby.
The Sherman Oaks Purchase Agreement, this Agreement, the Seller Party
Instruments and all agreements to which any Seller Party will become a party
hereunder or thereunder, including the Lease, are and will constitute the valid
and legally binding obligations of such Seller Party, and are and will be
enforceable against such Seller Party in accordance with the respective terms
hereof or thereof, except as enforceability may be restricted, limited or
delayed by applicable bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and except as enforceability may be subject to and
limited by general principles of equity (regardless of whether considered in a
proceeding in equity or at law).

SECTION 4.3. ABSENCE OF CONFLICTS. Each Seller Party's execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby (or by the Sherman Oaks Purchase Agreement if such Seller
Party is a party thereto), will not, with or without the giving of notice and/or
the passage of time: (i) violate or conflict with any provision of either Seller
Parties' Governing Documents; (ii) violate any provision of any Law to which
such Seller Party is subject; (iii) violate or conflict with any judgment,
order, writ or decree of any court applicable to such Seller Party; (iv) result
in or cause the creation of a Lien on any of the Assets; or (v) except as
disclosed on SCHEDULE 4.3, result in the breach or termination of any provision
of, or create rights of acceleration or constitute a default under, the terms of
any indenture, mortgage, deed of trust, contract, agreement or other instrument
to which such Seller Party is a party or by which such Seller Party or any of
its assets is bound.

SECTION 4.4. CONSENTS AND APPROVALS. Except as set forth on SCHEDULE 4.4, no
license, permit, qualification, order, consent, authorization, approval or
waiver of, or registration, declaration or filing with, or notification to, any
Governmental Entity or other Person is required to be made or obtained by or
with respect to either Seller Party in connection with the execution, delivery
and performance of the Sherman Oaks Purchase Agreement (if such Seller Party is
a party thereto), this Agreement or the Seller Instruments by the Seller Parties
or the consummation of the transactions contemplated hereby or thereby.

SECTION 4.5. FINANCIAL STATEMENTS. SCHEDULE 4.5 sets forth (i) the audited
balance sheets of each applicable Seller Party (other than Desert Valley
Operator and Prime A) for the fiscal years


                                       12

<PAGE>

ended 2003 and 2004, (ii) the unaudited balance sheet of each Seller Party at
September 30, 2005 (in the case of Desert Valley Operator and Prime A November
30, 2005) (the "Balance Sheet Date") (the balance sheets described in this
subsection (ii) being herein referred to, collectively, as the "Balance
Sheets"), (iii) the audited statement of income and cash flows of each
applicable Seller Party (other than Desert Valley Operator and Prime A) for the
fiscal years ended 2003 and 2004, and (iv) the unaudited statement of income of
each Seller Party for the nine (9) months ended September 30, 2005 (in the case
of Desert Valley Operator and Prime A November 30, 2005) (the financial
statements described in this sentence, being herein referred to, collectively,
as the "Financial Statements"). Except as set forth on SCHEDULE 4.5, the
Financial Statements have been prepared in accordance with GAAP, are based on
the books, records and accounts of the Seller Parties and fairly present the
financial condition and results of operations, cash flows and shareholders'
equity of the Seller Parties as of the respective dates thereof and for the
respective periods indicated therein, except (i) that the unaudited interim
statements do not include complete note (including footnote) disclosure as
required by GAAP; and (ii) that the unaudited interim statements are subject to
normal, year-end adjustments which are not, and will not be, material in amount
or effect, either individually or in the aggregate.

SECTION 4.6. NO UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE 4.6, no
Seller Party has any material liability or obligation, whether absolute,
accrued, contingent or otherwise, including any potential future liability
arising out of acts or omissions which have already occurred, which is not fully
and accurately reflected or reserved against in the Balance Sheets except for
liabilities or obligations that may have arisen in the ordinary course of
business of the Seller Parties, consistent with the past practice of the Seller
Parties, since the Balance Sheet Date (none of which results from, arises out
of, relates to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement or violation of law) and no Seller Party
has Knowledge of any fact, condition or circumstance which could form the basis
of any such liability or obligation.

SECTION 4.7. ACCOUNTS RECEIVABLE. The accounts receivable of Sherman Oaks
include only accounts receivable arising from bona fide transactions in the
conduct of the ordinary course of business of Sherman Oaks, are in all material
respects true and genuine, represent legal, valid and binding obligations of the
respective debtors enforceable in accordance with their terms. No material
payment of said receivables is contingent upon performance of any obligations or
contract, past or future, and, except as set forth on SCHEDULE 4.7, all such
receivables are free of all security interests and encumbrances created by
Sherman Oaks. Except as set forth on SCHEDULE 4.7, no defense, counterclaim,
offset or adjustment exists as to any such account receivable.

SECTION 4.8. ABSENCE OF CHANGES. Except as set forth on SCHEDULE 4.8, since the
Balance Sheet Date, Sherman Oaks has, as applicable:

(a) conducted its business only in the ordinary course of business and
consistently with its past practices;

(b) not suffered any change, event or circumstance which has had, or could have,
a Material Adverse Effect;


                                       13

<PAGE>

(c) preserved its legal existence and retained its business organization intact;

(d) maintained its relationships with all suppliers, trade creditors and trade
debtors;

(e) paid or satisfied all of its debts, liabilities or obligations as the same
became due;

(f) paid all compensation and other obligations to its employees when the same
were due and payable;

(g) timely made all applicable filings with Governmental Entities;

(h) not mortgaged, pledged, subjected to Lien, charged, encumbered or granted a
security interest in or to any of the Assets;

(i) except as otherwise provided in this Agreement, not sold or transferred any
of its assets except for sales of inventory in the ordinary course of business
and consistently with its past practices;

(j) not suffered any damage, destruction or loss (whether or not covered by
insurance) affecting the Assets;

(k) not cancelled any debts owing to it or otherwise granted or waived any right
of substantial value;

(l) not terminated or materially modified any contract, lease, agreement or
arrangement with any payor, vendor or supplier or received notice of termination
or become aware of any threat of termination with respect to any such contract,
lease, agreement or arrangement;

(m) except for the Sherman Oaks Purchase Agreement, not made any capital
expenditure or commitment for the acquisition of assets in excess of Fifty
Thousand Dollars ($50,000);

(n) not made or suffered any change to its Governing Documents;

(o) not made or received any loans or advances to or from any Person, other than
renewals or extensions of existing indebtedness and uses of lines of credit;

(p) maintained its books and records in accordance with GAAP, consistent with
past practices;

(q) not incurred, assumed or guaranteed any Indebtedness;

(r) not experienced any defections in its medical staff; or

(s) not agreed or offered, whether in writing or otherwise, to take, and neither
any Seller Party nor its board of directors (or by any Person or group of
Persons possessing and/or exercising similar authority with respect to such
Seller Party) or Equity Constituents have authorized the taking of, any action
described in Sections 4.8(a) through 4.8(r) above.


                                       14

<PAGE>

SECTION 4.9. LICENSES. Except as set forth on SCHEDULE 4.9, Sherman Oaks has,
and, upon the closing of the transaction under the Sherman Oaks Purchase
Agreement, Desert Valley Operator will have, all licenses, permits, certificates
of need and other authorizations of Government Entities (the "Permits") from all
applicable Governmental Entities necessary or proper in order to operate the
Hospital and to conduct the Business. Except as set forth on SCHEDULE 4.9,
Sherman Oaks has, and upon the closing of the transaction under the Sherman Oaks
Purchase Agreement, Desert Valley Operator will have, good, clear and
indefeasible title to and ownership of all the Permits, free and clear of all
Liens and may grant Acquisition Sub a first priority security interest in and to
the Permits. Each Permit issued to and held by Sherman Oaks is identified and
described on SCHEDULE 4.9, and true, correct and current copies of each such
Permit have previously been made available to the Purchaser Parties by the
Seller Parties. Except as set forth on SCHEDULE 4.9, Sherman Oaks previously has
complied and is currently complying with its obligations under each of the
Permits and all such Permits are in full force and effect. No written notice
from any authority in respect to the threatened, pending or possible revocation,
termination, suspension or limitation of any of the Permits has been issued or
given to Sherman Oaks or any Seller Party and neither Sherman Oaks, nor any
Seller Party, has any Knowledge of the proposed or threatened issuance of any
such notice or of any grounds or basis therefor. The Hospital is currently
licensed as a general acute-care hospital with __ general acute-care beds, and
will remain so licensed through the Closing Date in compliance with and subject
only to the usual and customary laws and government regulations pertaining to
the operation of an acute-care hospital in the State of California.

SECTION 4.10. ACCREDITATION; MEDICARE AND MEDICAID; THIRD PARTY PAYORS. Sherman
Oaks is currently accredited by the Joint Commission on Accreditation of
Healthcare Organizations ("JCAHO") and the Seller Parties have previously made
available to the Purchaser Parties true, correct and complete copies of the
following documents (i) the most recent JCAHO accreditation survey reports for
the Hospital and deficiency list and plan of correction, if any, and a list and
description of events in the past three (3) years at the Hospital that
constitute "Adverse Events" (as defined by JCAHO), if any, and any documentation
that was created prepared and/or produced by Sherman Oaks or any Seller Party to
satisfy JCAHO requirements relating to addressing such Adverse Events; (ii) any
state licensing survey reports with respect to the Hospital for the two (2) year
period prior to the date hereof, as well as any statements of deficiencies and
plans of correction in connection with such reports; (iii) the fire marshal's
surveys for the past two (2) years and list of deficiencies, if any, for the
Hospital; and (iv) the boiler inspection reports for the past two (2) years and
list of deficiencies, if any, for the Hospital. Sherman Oaks has taken all
reasonable steps to correct all such deficiencies and a description of any
uncorrected deficiency is set forth on SCHEDULE 4.10. Except as set forth on
SCHEDULE 4.10 attached hereto, Sherman Oaks and each Seller Party (other than
Prime Healthcare Services, Inc.) participates without restriction under Title
XVIII of the Social Security Act ("Medicare") and Title XIX of the Social
Security Act ("Medi-Cal"), the Medicare and the Medi-Cal programs of the State
of California and the TRICARE/CHAMPUS programs (collectively, the "Government
Programs"). Sherman Oaks has received Medicare or Medi-Cal reimbursement with
respect to the Hospital and is eligible to receive payment without restriction
under Medicare and Medi-Cal. Except as set forth on SCHEDULE 4.10, the Hospital
is in compliance with the conditions of participation for the Government
Programs, has received all approvals or qualifications necessary for capital
reimbursement and has been found by CMS to be in compliance with 42 C.F.R.
Sections 489.20 and 489.24 and its medicare provider agreement will


                                       15

<PAGE>

not be terminated for failure to so comply. Except as set forth on SCHEDULE
4.10, there is no pending, nor, to the Seller Parties' Knowledge, threatened,
proceeding or investigation under the Government Programs involving the Hospital
or any of the Assets. The Seller Parties have previously made available to the
Purchaser Parties true, correct and complete copies of the most recent Medicare
and Medi-Cal certification survey reports for the Hospital including any
statements of deficiencies and plans of correction, and the corrective action
plans related thereto. Sherman Oaks has taken all reasonable steps to correct
all such deficiencies and a description of any uncorrected deficiency is set
forth on SCHEDULE 4.10. With respect to the operation of the Hospital, except as
set forth on SCHEDULE 4.10, neither Sherman Oaks nor any of its officers,
directors or any of the Business Employees (as hereinafter defined), nor any
Seller Party (or Equity Constituent thereof) or Service Provider (i) has been
excluded, suspended or debarred from, or otherwise adjudicated, deemed or
determined ineligible for, participation in any Government Program, including
Medicare or Medi-Cal, (ii) has been convicted of a criminal offense related to
conduct that would trigger an exclusion from any Government Program, (iii)
committed any act or omission which could result in, or form the basis of, any
of the actions described in clauses (i) or (ii) of this sentence; and (v) no
Medicare funds will be used to make any payment for any items or services
furnished by any excluded individual. Sherman Oaks has timely filed, caused to
be timely filed and, as to reports due after the Closing, Desert Valley Operator
shall timely file or cause to be filed, all cost reports required by third party
payors, including, but not limited to, Government Programs and other insurance
carriers, and, except as disclosed on SCHEDULE 4.10 all such reports are or will
be complete and accurate when filed. Except as disclosed on SCHEDULE 4.10,
Sherman Oaks is and has been in compliance with filing requirements with respect
to cost reports of the Hospital, including appropriate allocation of expenses
associated with any management or consulting services provided by any employees
of Sherman Oaks and such reports do not claim and the Hospital has not received,
payment or reimbursement in excess of the amount provided or allowed by
applicable law or any applicable agreement, except where excess reimbursement
was noted on the cost report. True and correct copies of the cost reports to
third parties for the Hospital for the three (3) most recent fiscal years with
respect to which Sherman Oaks received such cost reports have been made
available to the Purchaser Parties. Except as disclosed on SCHEDULE 4.10,
neither Sherman Oaks, nor any Seller Party, has received any written notice of
any dispute relating to the Hospital between Sherman Oaks and any Governmental
Entity, including any fiscal intermediary or carrier, federal, state or local
governmental body or entity, or the Administrator of the Center for Medicare and
Medi-Cal Services, with respect to any Government Program cost reports or claims
filed with respect to the Hospital, on or before the date of this Agreement.

SECTION 4.11. HIPAA COMPLIANCE. Sherman Oaks and each Seller Party are in full
compliance with the Standards for Privacy of Individually Identifiable Health
Information and the Transaction and Code Set Standards which were promulgated
pursuant to the Health Insurance Portability and Accountability Act of 1996
("HIPAA"). SCHEDULE 4.11 includes, but is not limited in any manner whatsoever
to, any privacy, security or transaction and code set standards compliance plan
of Sherman Oaks in place or in development, and any plans, analyses or budgets
relating to information systems, including but not limited to necessary
purchases, upgrades or modifications to effect HIPAA compliance.

SECTION 4.12. HEALTHCARE REGULATORY MATTERS.


                                       16

<PAGE>

(a) No Seller Party, Sherman Oaks, or, to the Knowledge of any Seller Party, any
Physician, Service Provider or other Person rendering services (including
directly or indirectly referring patients) to or at, or in any way affiliated
with the Hospital (i) is a party to, or has received notice of, the commencement
of any investigation or debarment proceedings or any governmental investigation
or action (including any civil investigative demand or subpoena) under the False
Claims Act (31 U.S.C. Section 3729 et seq.), the Anti-Kickback Act of 1986 (41
U.S.C. Section 51 et seq.), the Federal Health Care Programs Anti-Kickback
statute (42 U.S.C. Section 1320a-7a(b)), the Ethics in Patient Referrals Act of
1989, as amended (Stark Law) (42 U.S.C. 1395nn), the Civil Money Penalties Law
(42 U.S.C. Section 1320a-7a), or the Truth in Negotiations (10 U.S.C. Section
2304 et seq.), Health Care Fraud (18 U.S.C. 1347), Wire Fraud (18 U.S.C. 1343),
Theft or Embezzlement (18 U.S.C. 669), False Statements (18 U.S.C. 1001), False
Statements (18 U.S.C. 1035), and Patient Inducement Statute and equivalent state
statutes or any rule or regulation promulgated by a Governmental Entity with
respect to any of the foregoing (collectively, the "Healthcare Fraud Laws")
affecting any Seller Party, Sherman Oaks, the Hospital or the Business (and no
grounds for any such proceeding, investigation or action exist); and (ii) is not
in full compliance with all applicable Healthcare Fraud Laws.

(b) Except as set forth on SCHEDULE 4.12, no Seller Party, Sherman Oaks, or, to
the Seller Parties' Knowledge, any Physician, Service Provider or other Person
rendering services (including directly or indirectly referring patients) to or
at, or in any way affiliated with, the Hospital, has ever been investigated,
charged or implicated in any violation of any state or federal statute or
regulation involving false, fraudulent or abusive practices relating to
participation in state or federally sponsored reimbursement programs, including,
but not limited to, false or fraudulent billing practices. No Seller Party,
Sherman Oaks or, to the Seller Parties' Knowledge, any Physician, Service
Provider or other Person rendering services (including directly or indirectly
referring patients) to or at, or in any way affiliated with, the Hospital, has
ever engaged in any of the following: (i) knowingly and willfully making or
causing to be made a false statement or representation of a material fact in any
applications for any benefit or payment under Medicare or Medi-Cal program; (ii)
knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment under Medicare or Medi-Cal program; (iii) failing to disclose
knowledge of any event affecting the initial or continued right to any benefit
or payment under Medicare or Medi-Cal program on its own behalf or on behalf of
another, with intent to secure such payment or benefit fraudulently; (iv)
knowingly and willfully soliciting, paying, or receiving any remuneration
(including kickback, bribe or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (A) in return
for referring an individual to a Person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medi-Cal, or (B) in return for purchasing, leasing or
ordering or arranging for or recommending the purchasing, leasing or ordering of
any good, facility, service, or item for which payment may be made in whole or
in part by Medicare or Medi-Cal; (v) presenting or causing to be presented a
claim for reimbursement for services that is for an item or service that was
known or should have been known to be (A) not provided as claimed, or (B) false
or fraudulent; or (vi) knowingly and willfully making or causing to be made or
inducing or seeking to induce the making of any false statement or
representation (or omitting to state a fact required to be stated therein or
necessary to make the statements contained therein not misleading) of a material
fact with respect to (A) a


                                       17

<PAGE>

facility in order that the facility may qualify for Governmental Entity
certification or (B) information to be provided under 42 USC Section 1320a-3.

SECTION 4.13. TAXES. Each Seller Party has filed or caused to be filed all Tax
Returns of such party which have become due (taking into account valid
extensions of time to file) prior to the date hereof. Such Tax Returns are
accurate and complete in all material respects, and each Seller Party has paid
or caused to be paid all Taxes for the periods covered thereby, whether or not
shown to be due on such Tax Returns. There are (i) no outstanding Liens for any
Taxes that have been filed by any Governmental Entity against the Assets, or any
other assets of Sherman Oaks or any Seller Party used in the Business (other
than for ad valorem taxes not yet due and payable), and (ii) no claims being
asserted with respect to any Taxes relating to any Seller Party, Sherman Oaks,
the Assets or the Business for which any Purchaser Party could be held liable,
and there is no basis for the assertion of any such claim. No Seller Party or
Sherman Oaks has made or agreed or offered to make, or revoked or agreed or
offered to revoke, a Tax election with respect to or affecting the Assets at any
time during the last two (2) years. Except as set forth on SCHEDULE 4.13, no
Seller Party or Sherman Oaks is a party to any tax abatement agreement relating
to the Assets. Except as disclosed with reasonable specificity on SCHEDULE 4.13,
there are no outstanding waivers or agreements extending the statute of
limitations for any period with respect to any Tax to which the Assets or any
Purchaser Party may be subject following the Closing.

SECTION 4.14. GOOD TITLE TO ASSETS. Except as set forth on SCHEDULE 4.14 and
upon the closing of the transaction under the Sherman Oaks Purchase Agreement,
Desert Valley Operator will have, good, absolute and marketable title to, and
unrestricted possession of, all of the Assets (other than the Real Property,
which is addressed in Section 4.15 below), free and clear of all Liens (other
than Permitted Exceptions) and any adverse Claims of third parties.

SECTION 4.15. TITLE AND CONDITION OF THE REAL PROPERTY.

(a) EXHIBIT C hereto sets forth a legal description of the Real Property. At
Closing, Desert Valley Operator and Prime A will have and convey to the
Acquisition Sub good and marketable title in their interests in the Real
Property, free and clear of any and all Liens, encumbrances, restrictions or
easements of any kind whatsoever (other than Permitted Encumbrances).

(b) The location, construction, occupancy, operation, use and sale of the Real
Property (including the Improvements) do not violate any applicable law,
statute, ordinance, rule, regulation, order or determination of any Governmental
Entity or any restrictive covenant or deed restriction (recorded or otherwise)
affecting the Real Property, including, without limitation, any applicable
zoning or subdivision ordinance or building code, flood disaster law or health
and environmental law or regulation.

(c) With regard to the Real Property, except as set forth on SCHEDULE 4.15(C) or
as otherwise disclosed on the Survey, to the Knowledge of the Seller Parties,
there are no (i) encroachments onto or from adjacent properties; (ii) violations
of set-back, building or side lines; (iii) encroachments onto any easements or
servitudes located on such Real Property; (iv) pending or threatened boundary
line disputes; (v) portions of such Real Property located in a flood plain or in
an area defined as a wetland under applicable state or federal law; (vi)
cemeteries or gravesites


                                       18

<PAGE>

located on the Real Property; or (vii) mine shafts under the Real Property or
any other latent defects, such as sinkholes, regarding or affecting the Real
Property.

(d) The existing water, sewer, gas and electricity lines, storm sewer and other
utility systems are adequate to serve the utility needs of the Real Property.
All of said utilities are installed and operating, and all installation and
connection charges have been paid in full.

(e) Except as set forth on SCHEDULE 4.15(E), neither the whole nor any portion
of the Real Property has been condemned, requisitioned or otherwise taken by any
public authority (a "Public Taking"), and no notice of any Public Taking has
been received by any Seller Party with regard to any of the Real Property. No
Seller Party has any Knowledge of any Public Taking being threatened or
contemplated. No Seller Party has any Knowledge of any public improvements which
have been ordered to be made and/or which have not heretofore been assessed,
and, to the Knowledge of the Seller Parties, there are no special, general or
other assessments pending or threatened against or affecting any of the Real
Property (except those expressly identified in the Title Commitment).

(f) Except as set forth on SCHEDULE 4.15(F), there are no Claims, actions,
suits, proceedings or investigations pending or, to the Knowledge of any Seller
Party, threatened, against or affecting all or any portion of the Real Property.

(g) Permanent certificates of occupancy, all licenses, permits, certificates of
need (if applicable), authorizations and approvals required by all Governmental
Entities having jurisdiction, have been issued for the Improvements, and, as of
the Closing, all of the same will be in full force and effect. The Improvements,
as designed and constructed, comply with all statutes, restrictions, regulations
and ordinances applicable thereto, including but not limited to the Americans
with Disabilities Act and Section 504 of the Rehabilitation Act of 1973. No
Seller Party has in its possession or has Knowledge of any studies or reports
which specify or suggest the presence of any defects in the design or
construction of any of the Improvements.

(h) The Seller Parties have no Knowledge of any fact or condition which would
result in the termination of the current access from the Real Property to any
presently existing public highways and/or roads adjoining or situated on the
Real Property or to sewer or other utility services to serve the Real Property.

(i) SCHEDULE 4.15(I) attached hereto sets forth an accurate and complete list of
all leases, subleases, commitment letters, letters of intent and other rental
agreements, whether written or oral, now or hereafter in effect, if any, that
grant or will grant a possessory interest in and to any space in the Real
Property or that otherwise assign or convey rights with regard to the Real
Property or the Improvements (collectively referred to as the "Tenant Leases").
SCHEDULE 4.15(I) designates which of the Tenant Leases described therein are
with the referral sources (as determined by any of the Healthcare Fraud Laws) of
Sherman Oaks. SCHEDULE 4.15(I) specifies the rent and security deposit, if any,
for each Tenant Lease. The Seller Parties have made available to the Purchaser
Parties complete, correct and current copies of all Tenant Leases. The Seller
Parties shall provide to the Purchaser Parties prior to Closing Tenant Lease
estoppels in form satisfactory to the Purchaser Parties from all Tenants under
the applicable Tenant Leases. Except for the Tenant Leases and any other items
listed on SCHEDULE 4.15(I), there are no


                                       19

<PAGE>

purchase contracts, leases of space, options, rights of first refusal or other
written or oral agreements of any kind whereby any person or entity will have
acquired or will have any basis to assert any right, title or interest in, or
right to the possession, use, enjoyment or proceeds of, any part or all of the
Real Property or the Improvements.

(j) Sherman Oaks has not accepted the payment of rent or other sums due under
any of the Tenant Leases for more than one (1) month in advance. As of the
Closing, none of the Tenant Leases and none of the rents or other charges
payable thereunder, if any, will have been assigned, pledged or encumbered.
Except as set forth on SCHEDULE 4.15(J), as of the Closing, no brokerage or
leasing commissions or other compensation will be due or payable to any Person
with respect to, or on account of, the Lease or any Tenant Lease or any
extensions or renewals thereof, if any, excepting those agreements entered into
or accepted in writing by the Purchaser Parties.

(k) All tenant improvements, repairs and other work and obligations, if any,
then required to be performed by the landlord under each of the Tenant Leases
will be fully performed and paid for in full on or prior to the Closing.

(l) Except as set forth on SCHEDULE 4.15(L): (i) the Tenant Leases are freely
assignable by Sherman Oaks to the Seller Parties, have not been modified,
amended or assigned, are legally valid, binding and enforceable against Sherman
Oaks and, following closing, the Seller Parties (and, to the best of the Seller
Parties' Knowledge, against the other parties to such Tenant Leases) in
accordance with their respective terms and are in full force and effect; (ii)
there are no monetary defaults and no material nonmonetary defaults by Sherman
Oaks or, to the best of the Seller Parties' Knowledge, any other party to the
Tenant Leases; (iii) Sherman Oaks has not received written notice of any
default, offset, counterclaim or defense under any of the Tenant Leases; (iv) no
condition or event has occurred which with the passage of time or the giving of
notice or both would constitute a default or breach by Sherman Oaks or any
Seller Party of the terms of any of the Tenant Leases; and (v) upon the closing
of the transaction under the Sherman Oaks Purchase Agreement, the Tenant Leases
will be freely assignable by the Seller Parties to the Acquisition Sub.

(m) The Real Property constitutes all the land and improvements used by Sherman
Oaks in connection with the operation of the Hospital, it being understood that
certain administrative activities relating to such operations are not conducted
at the Real Property.

SECTION 4.16. CONDITION OF PERSONAL PROPERTY. SCHEDULE 4.16 sets forth a list of
all equipment and other items of tangible personal property used by Sherman Oaks
in the operation of the Hospital and to be purchased by Desert Valley Operator
(the "Personal Property"). Except as set forth on SCHEDULE 4.16, upon the
closing of the transaction under the Sherman Oaks Purchase Agreement, Desert
Valley Operator may grant Acquisition Sub a first priority security interest in
and to the Personal Property. SCHEDULE 4.16 sets forth an accurate and complete
list of all leases of personal property used in the operation of the Hospital
(the "Personal Property Leases"). The Seller Parties have made available the
Purchaser Parties with complete, correct and current copies of all of the
Personal Property Leases. Except as set forth on SCHEDULE 4.16: (i) the Seller
Parties may, upon the closing of the transaction under the Sherman Oaks Purchase
Agreement, grant a first priority security interest in the Personal Property
Leases to the Acquisition Sub, (ii)


                                       20

<PAGE>

the Personal Property Leases have not been modified, amended or assigned, are
legally valid, binding and enforceable in accordance with their respective terms
and are in full force and effect; (iii) there are no monetary defaults and no
material nonmonetary defaults by any party to the Personal Property Leases; and
(iv) to the Knowledge of Seller Parties, no condition or event has occurred
which with the passage of time or the giving of notice or both would constitute
a default or breach by any Party of the terms of any Personal Property Lease.
Except as set forth on SCHEDULE 4.16, all Personal Property is in good operating
condition and repair, ordinary wear and tear excepted, and is located on the
Real Property.

SECTION 4.17. COMPLIANCE WITH ENVIRONMENTAL LAWS. To the Knowledge of the Seller
Parties, except as set forth on SCHEDULE 4.17

(a) no Governmental Entity or any nongovernmental third party has notified any
Seller Party of any alleged violation or investigation of any suspected
violation under the Environmental Laws in connection with the ownership,
operation and/or leasing of the Real Property or the Hospital, including any
litigation or cause of action alleging personal injury or property damage caused
by exposure to, or the disposal, release or migration of, any Hazardous
Materials;

(b) with respect to the ownership, operation and/or leasing of the Real Property
and the Hospital, no Seller Party has stored, disposed of or arranged for the
disposal of Hazardous Materials, except in compliance with the Environmental
Laws;

(c) there have been no actions nor, any activities, circumstances, conditions,
events or incidents, including, without limitation, the generation,
transportation, treatment, storage, release, emission, discharge, presence or
disposal of any Hazardous Materials on or from any of the Real Property or the
Hospital that could form the basis of any claim under the Environmental Laws
against any Seller Party or any Purchaser Party;

(d) no Seller Party has, whether contractually or by operation of law (including
any Environmental Law), assumed or succeeded to any liability of any direct or
indirect predecessors or any other Person (including, without limitation,
Sherman Oaks) related or with respect to any Environmental Law applicable to the
Real Property or the Hospital;

(e) there are no underground storage tanks located at, on or under the Real
Property, and the Real Property does not contain any asbestos-containing
building material;

(f) there are no conditions presently existing on, at or emanating from the Real
Property or the operation of the Hospital, that may result in any liability,
investigation or clean-up cost under any Environmental Law; and

(g) neither Sherman Oaks, nor, to the Knowledge of the Seller Parties, any other
Person has installed, used, generated, manufactured, treated, handled, refined,
produced, processed, stored or disposed of, any Hazardous Materials in, on or
under the Real Property, except in compliance with the Environmental Laws. No
Seller Party has undertaken any activity, and the Seller Parties have no
Knowledge that any other Person has undertaken any activity, on the Real
Property which would cause (i) the Real Property to become a hazardous waste
treatment, storage or disposal facility within the meaning of, or otherwise
bring the Real Property within the ambit of, any Environmental Law, (ii) a
release or threatened release of Hazardous Material from the Real


                                       21

<PAGE>

Property within the meaning of, or otherwise bring the Real Property within the
ambit of, any Environmental Law, or (iii) the discharge of Hazardous Material
into any watercourse, body of, surface or subsurface water or wetland, or the
discharge into the atmosphere of any Hazardous Material which would require a
permit under any Environmental Law. No activity has been undertaken by any
Seller Party with respect to the Real Property which would cause a violation or
support a claim under any Environmental Law. No investigation, administrative
order, litigation or settlement with respect to any Hazardous Material is in
existence, or, to the Seller Parties' Knowledge, threatened with respect to the
Real Property. No notice has been served on any Seller Party from any
Governmental Entity claiming any violation of any Environmental Law, or
requiring compliance with any Environmental Law, or demanding payment or
contribution for environmental damage or injury to natural resources. No Seller
Party has obtained or is required to obtain, and no Seller Party has any
Knowledge of any reason Acquisition Sub will be required to obtain, any permits,
licenses, or similar authorizations to occupy, operate or use the Improvements
or any part of the Real Property by reason of any Environmental Law.

SECTION 4.18. INSURANCE. SCHEDULE 4.18 sets forth a complete and accurate list
and brief description of all insurance policies currently held by Sherman Oaks
or any Seller Party with respect to the Real Property, the operation of the
Hospital and the professional liability, negligence and other acts of the
Physicians of the Hospitals and the Service Providers of the Hospital. All such
Insurance policies are in full force and effect, all premiums due thereon have
been paid in full and Sherman Oaks and the Seller Parties are in compliance with
the terms of such Insurance Policies.

SECTION 4.19. LITIGATION. Except as set forth on SCHEDULE 4.19, there is no
dispute, suit, action, proceeding, inquiry or investigation (a "Claim") against
or involving any of the Hospital or Sherman Oaks or any of their properties or
rights, pending or, to the Knowledge of the Seller Parties, threatened
(including, without limitation any suit, action, proceeding or investigation
pursuant to Title 11 of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the Family and
Medical Leave Act of 1993, or any other federal, state or local law regulating
employment) nor do the Seller Parties know of any facts which might result in
any such Claim. There is no Claim pending, or, to the Seller Parties' Knowledge,
threatened, against any Physician of the Hospital or Service Provider of the
Hospital which could, by operation of law, through contract or otherwise, result
in a Claim against Sherman Oaks, and no Seller Party has any Knowledge of any
facts which could result in such a Claim. Except as set forth on SCHEDULE 4.19,
there is no judgment, decree, injunction, rule or order of any Governmental
Entity or any other Person (including, without limitation, any arbitral
tribunal) outstanding against the Hospital or Sherman Oaks, to the extent that
such judgment, decree, injunction, rule or order relates to the transactions
contemplated by the Sherman Oaks Agreement or this Agreement, and no Seller
Party or Sherman Oaks, to the extent that any of the following relates to the
transactions contemplated by the Sherman Oaks Agreement or this Agreement, is in
violation of any term of any judgment, decree, injunction or order outstanding
against it. Furthermore, there is no Claim by or before any Governmental Entity
or other Person pending or, to the Knowledge of the Seller Parties, threatened,
which questions or challenges the validity of the Sherman Oaks Agreement or this
Agreement or any action taken or to be taken by any Person pursuant to the
Sherman Oaks Agreements or this


                                       22

<PAGE>

Agreement or in connection with the transactions contemplated thereby or hereby,
nor is there any basis for any such Claim.

SECTION 4.20. CONTRACTS, OBLIGATIONS AND COMMITMENTS. SCHEDULE 4.20 sets forth a
list of all contractual agreements, whether written or oral, relating to or
affecting the Assets, the Hospital and/or the operation of the Business to which
Sherman Oaks is a party which may be assigned to and assumed by the Seller
Parties pursuant to the terms of the Sherman Oaks Purchase Agreement, including,
without limitation, the Landlord Leases (the "Contracts"). The Seller Parties
have made available to the Purchaser Parties complete and correct copies of all
of the Contracts. Except as set forth on SCHEDULE 4.20, (i) the Contracts are
legally valid, binding and enforceable against the parties in accordance with
their respective terms and are in full force and effect; (ii) there are no
defaults by any party to the Contracts; (iii) no party has not received notice
of any default, offset, counterclaim or defense under any Contract; and (iv) no
condition or event has occurred which with the passage of time or the giving of
notice or both would constitute a default or breach under the terms of any
Contract; and (v) the Contracts are freely assignable by Sherman Oaks to the
Seller Parties.

SECTION 4.21. EMPLOYEES AND EMPLOYEE RELATIONS.

(a) SCHEDULE 4.21(A) contains a current, correct and complete list of the names
and current hourly wage, monthly salary and other compensation of all employees
who are or who will provide services at the Hospital (collectively, the
"Business Employees"), together with a summary (containing estimates to the
extent necessary) of the individual's existing bonuses, additional compensation
and other benefits (whether current or deferred), if any, accrued, paid or
payable to each such individual for services rendered or to be rendered through
the fiscal period ending September 30, 2005. Except as set forth on SCHEDULE
4.21(A), all of the Hospital Employees are "at will" employees. Except as set
forth on SCHEDULE 4.21(A), Sherman Oaks is not a party to any oral (express or
implied) or written: (i) employment agreement, or (ii) agreement that contains
any severance or termination pay obligations, with any Business Employee. The
Seller Parties have made available true, correct and current copies (or, if not
written, accurate descriptions of the parties and terms) of such agreements to
the Purchaser Parties.

(b) Except as set forth on SCHEDULE 4.21(B), no Business Employee is represented
by any labor union, trade association or other employee organization, no demand
for recognition has been made by any labor union with respect to the Business
Employees, and there is not and has not been any labor union organizing activity
at the Hospital during the periods it has been operated by Sherman Oaks. Except
as set forth on SCHEDULE 4.22(B), Sherman Oaks is not a party to any collective
bargaining agreement or understanding with any labor union, trade association or
other employee organization with respect to any Business Employee and no such
agreements are currently being proposed and/or negotiated.

(c) Except as set forth on SCHEDULE 4.21(C), there is no labor dispute, work
stoppage, strike, slowdown, walkout, lockout, or any other interruption or
disruption of operations at the Hospital as a result of labor disputes or
disturbances with respect to the Business Employees and there is no
investigation, grievance, arbitration, complaint, claim or other dispute or
controversy (collectively, the "Labor Proceeding") pending or threatened,
between Sherman Oaks and any


                                       23

<PAGE>

present or former Business Employee, nor have any discharges or terminations of
any former Business Employee occurred which would form the basis for any claim
of discrimination against any Seller Party. Except as set forth on SCHEDULE
4.21(C), no Seller Party has any Knowledge of any facts or past, current or
contemplated event that could form the basis for any such Labor Proceeding, nor
has there been any such Labor Proceeding within the past twelve (12) months.

(d) Except as set forth on SCHEDULE 4.21(D), neither Sherman Oaks, nor any
Seller Party has received notice that any vice president, director or
director-level employee, or higher, of Sherman Oaks or any group of Business
Employees, has any plans to terminate his or her employment or affiliation with
Sherman Oaks or any Seller Party.

(e) Sherman Oaks has complied with and is currently in compliance with, and
Sherman Oaks has not received any notice of noncompliance with, any and all
applicable laws relating to the employment of labor, including, without
limitation, any provisions relating to wages, hours, equal employment,
occupational safety and health, workers' compensation, unemployment insurance,
collective bargaining, immigration, affirmative action and the payment and
withholding of social security and other taxes. Sherman Oaks has withheld all
amounts required by law or agreement to be withheld from the wages or salaries
of the Business Employees, and Sherman Oaks is not liable for any arrears of any
tax or penalties for failure to comply with the foregoing.

(f) SCHEDULE 4.21(F) sets forth each Employee Pension Benefit Plan (as defined
in Section 3(2) of ERISA) maintained by Sherman Oaks (each a "Plan") and
applicable to the Business Employees. Sherman Oaks is in compliance in all
material respects with all applicable laws and regulations respecting such
Plans.

SECTION 4.22. INTANGIBLE PROPERTY. SCHEDULE 4.22 sets forth a list of all
trademarks, service marks, and other intangible assets of Sherman Oaks used in
the operation of the Business and the Hospital and to be purchased by Desert
Valley Operator pursuant to the term of the Sherman Oaks Purchase Agreement (the
"Intangible Property"). Sherman Oaks own, or possess adequate, enforceable
licenses or other rights to use, all of the Intangible Property, and no rights
thereto have been granted to others by Sherman Oaks (except under the Sherman
Oaks Purchase Agreement). Except as set forth on SCHEDULE 4.22, all of the
Intangible Property is owned or used by Sherman Oaks free and clear of all
assignments, licenses, restrictions, encumbrances, charges or claims for
infringement, and none is subject to any outstanding order, decree, judgment,
stipulation or charge. There is no unauthorized use, disclosure, infringement or
misappropriation of any of the Intangible Property by any third party. Sherman
Oaks use of the Intangible Property does not infringe upon or otherwise violate
the rights of others. No one has asserted to Sherman Oaks that the use of the
Intangible Property by Sherman Oaks or by any Seller Party infringes upon the
patents, trade secrets, trade names, trademarks, service marks, copyrights or
other intellectual property rights of any other Person and no Seller Party has
any Knowledge of any fact or circumstance which could provide the basis for any
such assertion.

SECTION 4.23. COMPLIANCE WITH LAW. Sherman Oaks (a) is in compliance in all
material respects with every applicable law, rule, regulation, ordinance,
license, permit and other governmental action and authority and every order,
writ, and decree of every Governmental Entity in connection with the ownership,
conduct, operation and maintenance of the Business


                                       24

<PAGE>

and its ownership and use of its assets and no event has occurred or
circumstance exists which (with notice or lapse of time) would result in any
noncompliance with any such law, rule, regulation, ordinance, license permit,
order, writ or decree; and (b) have timely made or given all filings and notices
required to be made with the regulatory agencies of any Governmental Entity.

SECTION 4.24. HILL BURTON OBLIGATIONS.

(a) Except as set forth on SCHEDULE 4.24, neither Sherman Oaks, nor, to the
Knowledge of the Seller Parties, any predecessor in interest of Sherman Oaks,
has received any loans, grants or loan guarantees pursuant to the United States
Hill-Burton Act (42 U.S.C. 291a, et seq.) program, the Health Professions
Educational Assistance Act, the Nurse Training Act, the National Health Pharmacy
and Resources Development Act or the Community Mental Health Centers Act. All of
the obligations set forth on SCHEDULE 4.24 have been fully satisfied. The
transactions contemplated hereby will not result in any obligation of any
Purchaser Party to repay any such loan, grant or loan guarantee or to provide
uncompensated care in consideration thereof.

(b) None of the Assets are subject to any liability in respect of amounts
received by Sherman Oaks, any Seller Party, or any other Person for the purchase
or improvement of the Assets or any part thereof under restricted or conditioned
grants or donations, including monies received under the Public Health Service
Act, 42 U.S.C. Section 291, et seq.

SECTION 4.25. MEDICAL STAFF MATTERS. Except as set forth on SCHEDULE 4.25, there
are no pending or, to the Knowledge of the Seller Parties, threatened
investigations, appeals, challenges, disciplinary or corrective actions, or
disputes involving applicants to the medical staff of the Hospital, current
members of the medical staff of the Hospital or affiliated health professionals.
Since the Balance Sheet Date, no member of the medical staff of the Hospital has
resigned or been terminated therefrom and neither Sherman Oaks, nor any Seller
Party, has received notice that any Physician or medical staff member intends to
resign from its medical staff. True and correct copies of Medical Staff Bylaws
of the Hospital, the Hospital's Medical Staff Rules and Regulations, and the
Hospital's Medical Staff Hearing Procedures, all as presently in effect, have
been previously made available by the Seller Parties to the Purchaser Parties.

SECTION 4.26. BROKERS. Except as set forth on SCHEDULE 4.26 hereto, no Person is
or will be entitled to any brokerage, finder's or other fee, commission or
payment in connection with or as a result of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Seller
Parties.

SECTION 4.27. RECORDS. True, complete and current copies of the Seller Parties'
Governing Documents have been delivered to the Purchaser Parties prior to the
execution and delivery of this Agreement. The books of account, minute books,
stock record books and other records of Seller Parties, all of which have been
made available to the Purchaser Parties, are complete and correct. The minute
books of Seller Parties contain records of all meetings and other limited
liability company actions of the manager and/or members of Seller Parties, and
have been delivered to the Purchaser Parties prior to the execution and delivery
of this Agreement.

SECTION 4.28. EXISTING LEASES. Desert Valley Parent and its Subsidiaries are in
compliance in all respects with the terms of the Existing Leases and no default
or breach (or event which with


                                       25

<PAGE>

notice and/or passage of time would constitute such a default or breach) has
occurred by any party thereto. None of the Seller Parties nor any of their
respective facilities has suffered a Material Adverse Effect since December 31,
2004 and no event has occurred which would reasonably likely to result in such a
Material Adverse Effect.

SECTION 4.29. REPRESENTATIONS COMPLETE. The representations and warranties made
by the Seller Parties in this Agreement (and, to the Knowledge of Seller
Parties, by Sherman Oaks in the Sherman Oaks Purchase Agreement) and the
statements made in or information contained on any Schedules or certificates
furnished by the Seller Parties pursuant to this Agreement (and, to the
Knowledge of Seller Parties, by Sherman Oaks in the Sherman Oaks Purchase
Agreement) do not contain and will not contain, as of their respective dates and
as of the Closing Date, any untrue statement of a material fact, nor do they
omit or will they omit, as of their respective dates or as of the Closing Date,
to state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which they were made,
not misleading.

                                    ARTICLE V

             REPRESENTATIONS AND WARRANTIES BY THE PURCHASER PARTIES

The Purchaser Parties hereby jointly and severally represent and warrant to the
Seller Parties as of the date hereof, and as of the Closing Date as follows:

SECTION 5.1. ORGANIZATION. MPT is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware. The
Acquisition Sub is a limited liability company duly formed, validly existing and
in good standing under the laws of the State of Delaware and qualified to do
business in the State of California.

SECTION 5.2. AUTHORIZATION; ENFORCEMENT, ABSENCE OF CONFLICTS. Each Purchaser
Party has the requisite power and authority to execute, deliver and carry out
the terms of this Agreement, to consummate the transactions contemplated hereby
and to conduct its businesses as now being conducted. All actions required to be
taken by each to authorize the execution, delivery and performance of this
Agreement, all documents executed by the Purchaser Parties which are necessary
to give effect to this Agreement and all transactions contemplated hereby and
thereby, have been duly and properly taken or obtained. No other action on the
part of either Purchaser Party is necessary to authorize the execution, delivery
and performance of this Agreement, all documents necessary to give effect to
this Agreement and all transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not, with or without the giving of notice
and/or the passage of time: (i) violate or conflict with any provision of the
Governing Documents of either Purchaser Party; (ii) violate any provision of
law, statute, rule or regulation to which either Purchaser Party is subject;
(iii) violate or conflict with any judgment, order, writ or decree of any court
applicable to either Purchaser Party; (iv) violate or conflict with any law or
regulation applicable to either Purchaser Party; or (v) result in the breach or
termination of any provision of, or create rights of acceleration or constitute
a default under, the terms of any debt or obligation to which either Purchaser
Party is a party or by which either Purchaser Party is bound.


                                       26

<PAGE>

SECTION 5.3. BINDING AGREEMENT. This Agreement and all agreements to which any
Purchaser Party will become a party hereunder is and will constitute the valid
and legally binding obligations of such Purchaser Party, and are and will be
enforceable against such Purchaser Party in accordance with the respective terms
hereof or thereof, except as enforceability may be restricted, limited or
delayed by applicable bankruptcy, insolvency or other laws affecting creditors'
rights generally and except as enforceability may be subject to and limited by
general principles of equity.

SECTION 5.4. LITIGATION. There is no Claim pending or, to the Knowledge of the
Purchaser Parties, threatened against or affecting any Purchaser Party that has
or would reasonably be expected to have a material adverse effect on the ability
of the Purchaser Parties to perform their respective obligations under this
Agreement or any aspect of the transactions contemplated hereby.

SECTION 5.5. BROKERS. Except as set forth on SCHEDULE 5.5 hereto, no Person is
or will be entitled to any brokerage, finder's or other fee, commission or
payment in connection with or as a result of the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Purchaser
Parties.

SECTION 5.6. COMPLIANCE WITH LAW. The Purchaser Parties, where applicable (a)
are in compliance with every applicable law, rule, regulation, ordinance,
license, permit and other governmental action and authority and every order,
writ, and decree of every Governmental Entity in connection with the ownership,
conduct, operation and maintenance of their businesses, and their ownership and
use of their assets, except where non-compliance would not prevent or impede the
Purchaser Parties from consummating the transactions contemplated hereby or the
ability of the Purchaser Parties to perform their respective obligations under
this Agreement and, to the Knowledge of the Purchaser Parties, no event has
occurred or circumstance exists which (without notice or lapse of time) would
result in any noncompliance with any such law, rule, regulation, ordinance,
license permit, order, writ or decree which would prevent or impede the
Purchaser Parties from consummating the transactions contemplated hereby; and
(b) have timely made or given all filings and notices required to be made by the
Purchaser Parties with the regulatory agencies of any Governmental Entity,
except where such failure would not prevent or impede the Purchaser Parties from
consummating the transactions contemplated hereby.

                                   ARTICLE VI

                                TITLE AND SURVEY

SECTION 6.1. SURVEY. Purchaser Parties shall cause to be prepared, at the
expense of the Seller Parties, a current ALTA/ACSM Land Title Survey of the Real
Property, prepared by a duly licensed land surveyor. The survey shall be
currently dated, shall show the location on the Real Property of any
improvements, fences, evidence of abandoned fences, ponds, creeks, streams,
rivers, easements, roads, rights-of-way, means of ingress and egress, location
of all utilities serving the Real Property, and encroachments, and shall contain
a legal description of the boundaries of the Real Property by metes and bounds
and the appropriate flood zone designation and the total number of acres
constituting the Real Property. The surveyor shall certify to the Purchaser
Parties and to the Title Company that the survey is correct and that there are
no visible


                                       27

<PAGE>

discrepancies, conflicts, encroachments, overlapping of improvements, fences,
evidence of abandoned fences, ponds, creeks, streams, rivers, easements, roads
or rights-of-way except as are shown on the survey plat. Any and all matters
shown on such survey shall be legibly identified by appropriate volume and page
recording references with dates of recording noted. If Purchaser Parties shall
disapprove such survey for any reason in Purchaser Parties' sole discretion,
Purchaser Parties may either (i) treat such objection as a title objection and
request that it be cured, or (ii) terminate this Agreement and the parties
hereto shall have no further liability or obligations hereunder, expect as
otherwise expressly set forth herein. If the Seller Parties are unable to cure
any objection to the survey within ten (10) days following delivery of notice to
the Seller Parties thereof, then Purchaser Parties may terminate this Agreement
upon written notice to the Seller Parties.

SECTION 6.2. TITLE INSURANCE. Purchaser Parties will cause to be prepared, at
the Seller Parties' expense, a title commitment for the issuance of an ALTA
Owner's Policy Form dated October 17, 1992, issued by a title insurance company
acceptable to MPT and qualified to insure titles in the State of California (the
"Title Company"), in the amount of the Purchase Price, covering title to the
Real Property at a date not earlier than the date hereof and showing good and
marketable title, subject only to the Permitted Exceptions. All of the standard
exceptions within the policy and the exceptions for mechanic's and materialmen's
liens and the survey exception shall be deleted. If Purchaser Parties shall
disapprove any items stated in the Title Commitment or the Exception Documents,
Purchaser Parties may either (i) treat such objection as a title objection and
request that it be cured, or (ii) terminate this Agreement and, upon such
termination, the parties hereto shall have no further liability or obligations
hereunder, except as otherwise expressly provided herein. If the Seller Parties
are unable to cure any exception or objection to title that is not a Permitted
Encumbrance within ten (10) days following delivery of notice to the Seller
Parties thereof, then Purchaser Parties may terminate this Agreement upon
written notice to the Seller Parties.

                                   ARTICLE VII

                              PRE-CLOSING COVENANTS

From and after the execution and delivery of this Agreement to and including the
Closing Date, the applicable party shall observe the following covenants:

SECTION 7.1. NO SHOP. Neither the Seller Parties, nor any investment banker,
attorney, accountant, representative or other Person retained by or on behalf of
the Seller Parties, shall directly or indirectly, initiate contact with, respond
to, solicit or encourage any inquiries, proposals or offers by, or participate
in any discussions or negotiations with, enter into any agreement with, disclose
any information concerning the Seller Parties or the Assets to, afford any
access to the properties, books or records of the Seller Parties to, or
otherwise assist, facilitate or encourage, any Person in connection with any
possible proposal regarding a sale, lease, transfer, disposition or other
transaction related to or affecting all or any portion of the Assets (including
all or any portion of the Real Property). The Seller Parties shall notify
Purchaser Parties immediately if any discussions or negotiations are sought to
be initiated, any inquiry or proposal is made, or any such information is
requested.


                                       28

<PAGE>

SECTION 7.2. ACCESS; CONFIDENTIALITY.

(a) Between the date hereof and the Closing, the Seller Parties shall (i) afford
the Purchaser Parties and their authorized representatives full and complete
access to Seller Parties' employees, medical staff, and other agents and
representatives and during normal working hours to all books, records, offices
and other facilities of Seller Parties and shall use their best efforts to cause
Sherman Oaks to afford to Purchaser Parties similar access to its personnel and
records relating to the Assets and the Business, (ii) permit the Purchaser
Parties to make such inspections and to make copies of such books and records as
they may reasonably require and (iii) furnish the Purchaser Parties with such
financial and operating data and other information related to the Hospital, the
Business, the Seller Parties and their respective Subsidiaries as the Purchaser
Parties may from time to time reasonably request. The Purchaser Parties and
their authorized representatives shall conduct all such inspections under the
supervision of personnel of the Seller Parties in a manner that will minimize
disruptions to the business and operations of the Seller Parties and in a manner
as to maintain the confidentiality of this Agreement.

(b) The Purchaser Parties and their authorized representatives (including their
designated engineer, architects, surveyors and/or consultants) may, subject to
Sherman Oaks's approval, upon reasonable notice and at any time enter into and
upon all or any portion of the Real Property in order to investigate and assess,
as the Purchaser Parties deem necessary or appropriate in their sole and
absolute discretion, the condition (including the structural and environmental
condition) of the Assets. The Seller Parties shall cooperate with the Purchaser
Parties and their authorized representatives in conducting such investigation,
shall use their best efforts to cause Sherman Oaks to allow the Purchaser
Parties and their authorized representatives full access to the Assets and the
Business, together with full permission to conduct such investigation, and shall
provide to the Purchaser Parties and their authorized representatives all
information maintained by the Seller Parties and related to the condition of the
Assets and the Business, including the Real Property, and all plans, soil or
surface or ground water tests or reports, any environmental investigation
results, reports or assessments previously or contemporaneously conducted or
prepared by or on behalf of, or in the possession of or reasonably available to
the Seller Parties or any of their engineers, consultants or agents and all
other information relating to environmental matters in respect of their
properties and businesses.

(c) The provisions of Confidentiality Agreement, dated May 5, 2005, (which
Seller Parties agree to be bound by as if they were original signatories
thereto) (the "Confidentiality Agreement") shall remain binding and in full
force and effect until the Closing. Notwithstanding anything to the contrary
contained herein or in the Confidentiality Agreement, the confidentiality
obligations as they relate to the transactions contemplated by this Agreement
shall not apply to the purported or claimed Federal income tax treatment of the
transactions (the "Tax Treatment") or to any fact that may be relevant to
understanding the purported or claimed Federal income tax treatment of the
transactions (the "Tax Structure"), and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
persons, without limitation of any kind, the Tax Treatment and Tax Structure of
the transactions contemplated by this Agreement and any materials of any kind
(including any tax opinions or other tax analyses) that relate to the Tax
Treatment or Tax Structure. In addition, each party hereto acknowledges that it
has no proprietary or exclusive rights to any tax matter or tax idea related to
the transactions contemplated by this Agreement. The preceding sentence is
intended to ensure that


                                       29

<PAGE>

the transactions contemplated by this Agreement shall not be treated as having
been offered under conditions of confidentiality for purposes of the
Confidentiality Regulations and shall be construed in a manner consistent with
such purpose. The information contained herein, in the Schedules hereto or
delivered to the Purchaser Parties or its authorized representatives pursuant
hereto shall be subject to the Confidentiality Agreement as Information (as
defined and subject to the exceptions contained therein) until the Closing and,
for that purpose and to that extent, the terms of the Confidentiality Agreement
are incorporated herein by reference.

SECTION 7.3. SCHEDULE UPDATES. From the date hereof until the Closing Date, the
Purchaser Parties, on the one hand, and the Seller Parties on the other hand,
shall immediately advise the other in writing of any additions or changes to any
Schedule to reflect any deficiencies or inaccuracies in such Schedule or to
reflect circumstances or matters which occur after the date of this Agreement
which, if existing prior to such date, would have been required to be described
on such Schedule; provided, however, that no additions or changes made to any
Schedule by any party to correct deficiencies or inaccuracies on such Schedule
shall be deemed to cure any breach or inaccuracy of a representation or
warranty, covenant or agreement or to satisfy any condition unless otherwise
agreed to in writing by the other party, but provided further, however, that an
addition or change made to any Schedule by any party to reflect circumstances or
matters which occur after the date of this Agreement shall be deemed to cure a
breach or inaccuracy of a representation or warranty, covenant or agreement, but
shall not be deemed to satisfy any condition unless agreed to in writing by the
other party.

SECTION 7.4. CONDUCT OF BUSINESS BY THE SELLER PARTIES PENDING THE CLOSING. The
Seller Parties covenant and agree that, during the period from the date hereof
and continuing until the earlier of the termination of this Agreement or the
Closing Date, unless the Purchaser Parties shall otherwise agree in writing, the
Seller Parties shall conduct their respective businesses only in, and the Seller
Parties shall not take any action except in, the ordinary course of business and
in a manner consistent with past practice and in compliance in all material
respects with all applicable laws and regulations, and that the Seller Parties
shall use reasonable best efforts to preserve substantially intact their
respective business organizations, to keep available the services of their
current officers, employees and consultants and to preserve their present
relationships with patients, suppliers and other persons with which they have
significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement or set forth on SCHEDULE 7.4, no Seller
Party shall, during the period from the date hereof and continuing until the
earlier of the termination of this Agreement or the Closing Date, directly or
indirectly do, or propose to do, any of the following without the prior written
consent of Purchaser Parties:

(a) amend, repeal or otherwise change in any way its Governing Documents;

(b) make or revoke any Tax election related to or affecting the Assets;

(c) fail to perform its obligations in all respects under agreements relating to
or respecting its assets, properties and rights;

(d) reduce the coverage of, fail to timely renew or pay the premiums on or
cancel any insurance policy;


                                       30

<PAGE>

(e) cause to lapse or fail to renew any license and certification necessary to
conduct its business;

(f) fail to timely make all applicable filings with Governmental Entities;

(g) create, assume or, other than those presently in existence, permit to exist
any Lien upon any of the Assets;

(h) modify or amend Sherman Oaks Purchase Agreement;

(i) purchase, sell, assign, lease or otherwise acquire, transfer or dispose of
any material assets, except in the ordinary course of business and consistent
with its past practice;

(j) enter into or agree to enter into any agreement or arrangements granting any
rights to purchase any of its assets, properties or rights, except for purchases
of inventory in the ordinary course of business and consistent with its past
practice;

(k) engage in any business other than the business currently conducted by such
Seller Party;

(l) terminate or modify any contract, lease or other agreement to which it is a
party (excluding expiration or satisfaction in accordance with the terms of such
contract or agreement); or

(m) take, agree or offer, in writing or otherwise, to take, any of the actions
described in Sections 7.4 (a) through (l) above, or any action which would make
any of the representations or warranties of such Seller Party contained in this
Agreement untrue, incorrect or incomplete or prevent such Seller Party from
performing or cause such Seller Party not to perform its covenants hereunder, in
each case, such that the conditions set forth in Sections 8.2(a) or 8.2(b), as
the case may be, would not be satisfied.

SECTION 7.5. COOPERATION. Subject to compliance with applicable law, from the
date hereof until the Closing Date, (a) the Seller Parties shall confer on a
regular and frequent basis with one or more representatives of the Purchaser
Parties to report operational matters that are material and the general status
of ongoing operations and (b) each of the Purchaser Parties and the Seller
Parties shall promptly provide the other or their counsel with copies of all
filings made by such party with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby.

SECTION 7.6. REGULATORY AND OTHER AUTHORIZATIONS, NOTICES AND CONSENTS.

(a) Each party hereto shall use all commercially reasonable efforts to obtain
all authorizations, consents, orders and approvals of all Governmental Entities
and officials that may be or become necessary for its execution and delivery of,
and the performance of its obligations pursuant to, this Agreement and each such
party will cooperate fully with the other parties hereto in promptly seeking to
obtain all such authorizations, consents, orders and approvals.

(b) The Seller Parties shall promptly give such notices to third parties and use
its commercially reasonable efforts to obtain such third party consents and
estoppel certificates as


                                       31

<PAGE>

Purchaser Parties may in their sole and absolute discretion deem necessary or
desirable in connection with the transactions contemplated by this Agreement,
including, without limitation, all third party consents that are necessary or
desirable in connection with the transfer of the Assets.

(c) The Purchaser Parties shall cooperate and use commercially reasonable
efforts to assist the Seller Parties in giving such notices and obtaining such
consents and estoppel certificates; provided, however, that the Purchaser
Parties shall have no obligation to give any guarantee or other consideration of
any nature in connection with any such notice, consent or estoppel certificate
or to consent to any change in the terms of any Asset which Purchaser Parties in
their sole and absolute discretion may deem adverse to the interests of the
Purchaser Parties.

(d) Anything in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an agreement to assign any Asset if an attempted assignment
thereof, without the consent of the other party thereto, would constitute a
breach or other contravention thereof, noncompliance by the Seller Parties or
their Affiliates thereunder or in any way adversely affect the rights of any
Purchaser Party thereunder. The Seller Parties and the Purchaser Parties agree
that, in the event any consent, approval or authorization necessary or desirable
to preserve for the Purchaser Parties any right or benefit with respect to any
such Asset is not obtained prior to the Closing, the Seller Parties will,
subsequent to the Closing, cooperate with the Purchaser Parties in attempting to
obtain such consent, approval or authorization as promptly thereafter as
practicable. If such consent, approval or authorization cannot be obtained, the
Seller Parties will use commercially reasonable efforts to provide the Purchaser
Parties with the rights and benefits of such affected Asset, and, if the Seller
Parties provide such rights and benefits, the Purchaser Parties shall assume the
obligations and burdens thereunder in accordance with this Agreement, including,
subcontracting, sublicensing, or subleasing to the Purchaser Parties, or under
which the Seller would enforce for the benefit of the Purchaser Parties, with
the Purchaser Parties assuming the Seller Parties' obligations, any and all
rights of the Seller Parties against a third party thereto.

SECTION 7.7. MUTUAL COVENANTS. The parties shall use their good faith reasonable
efforts to satisfy the conditions to the closing of the transactions
contemplated hereby. Without limiting the generality of the foregoing, the
respective parties shall execute and/or deliver, or use their respective good
faith reasonable efforts to cause to be executed and/or delivered, the documents
contemplated to be executed and/or delivered by them at Closing.

SECTION 7.8. PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the parties agree
to consult with each other before any party hereto or any of their respective
affiliates issues any press release or makes any public statement with respect
to this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue, or permit to be issued, any such press release or
make, or permit to be made, any such public statement prior to such
consultation.


                                       32

<PAGE>

                                  ARTICLE VIII

                               CLOSING CONDITIONS

SECTION 8.1. CONDITIONS TO THE OBLIGATIONS OF THE SELLER PARTIES. The
obligations of the Seller Parties to effect the transactions contemplated hereby
shall be further subject to the fulfillment of the following conditions, any one
or more of which may be waived by the Seller Parties:

(a) All of the representations and warranties of Purchaser Parties set forth in
this Agreement shall be true and correct when made and as of the Closing Date as
if made on the Closing Date.

(b) The Purchaser Parties shall have delivered, performed, observed and complied
in all material respects with all of the items, instruments, documents,
covenants, agreements and conditions required by this Agreement to be delivered,
performed, observed and complied with by them prior to, or as of, the Closing.

(c) The Purchaser Parties shall have executed, where applicable, and delivered
to the Seller Parties the documents referenced in Section 9.3 hereof.

(d) The closing of the transactions contemplated by the Sherman Oaks Purchase
Agreement shall have occurred; including, but not limited to, the approval of
the California Attorney General of the transactions contemplated thereby.

(e) Sherman Oaks has entered into the lease back of the Hospital and the Interim
Management Agreement.

SECTION 8.2. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER PARTIES. The
obligations of the Purchaser Parties to effect the transactions contemplated
hereby shall be further subject to the fulfillment of the following conditions,
any one or more of which may be waived by the Purchaser Parties:

(a) All of the representations and warranties of the Seller Parties set forth in
this Agreement shall be true and correct when made and as of the Closing Date as
if made on the Closing Date.

(b) The Seller Parties shall have delivered, performed, observed and complied
with all of the items, instruments, documents, covenants, agreements and
conditions required by this Agreement to be delivered, performed, observed and
complied with by them prior to, or as of, the Closing.

(c) The Seller Parties shall not have suffered any change, event or circumstance
which has had, or could have, a Material Adverse Effect.

(d) The closing of the transactions contemplated by the Sherman Oaks Purchase
Agreement shall have occurred, including, but not limited to, the approval of
the California Attorney General of such transactions.


                                       33

<PAGE>

(e) All necessary approvals, consents, estoppel certificates and the like of
third parties to the validity and effectiveness of the transactions contemplated
hereby have been obtained.

(f) No portion of the Assets shall have been damaged or destroyed by fire or
casualty.

(g) No condemnation, eminent domain or similar proceedings shall have been
commenced or threatened with respect to any portion of the Assets.

(h) The Purchaser Parties shall have received copies of all permits, licenses
and other approvals of governmental authorities required for the operation of
the Assets for their intended uses and written evidence satisfactory to the
Purchaser Parties that the operation and use of the Hospital are in accordance
with all applicable governmental requirements.

(i) The Purchaser Parties shall have received evidence that the Seller Parties
are maintaining insurance on the Assets and that the Purchaser Parties are named
as additional insureds and, where applicable, loss payees.

(j) The Seller Parties shall have executed where applicable, and delivered to
Purchaser Parties, the documents referenced in Section 9.2 hereof.

(k) There shall not have been instituted by any creditor of the Seller Parties,
any Governmental Entity or any other third party, any suit, action or proceeding
which would affect the Assets or seek to restrain, enjoin or invalidate the
transactions contemplated by the Sherman Oaks Purchase Agreement or this
Agreement.

(l) The Appraisal shall have been delivered and shall reflect an Appraised Value
that equals or exceeds the Purchase Price.

(m) The closing of the transactions contemplated by the Sherman Oaks Purchase
Agreement shall have occurred; including, but not limited to, the approval of
the California Attorney General of the transactions contemplated thereby.

(n) Sherman Oaks has entered into the lease back of the Hospital and the Interim
Management Agreement.

                                   ARTICLE IX

                                     CLOSING

SECTION 9.1. CLOSING DATE. The closing of the purchase and sale of the Assets
pursuant hereto (the "Closing") shall be handled through deliveries by mail into
escrow on December 31, 2005 (the actual date of closing being herein referred to
as the "Closing Date"), or on such other date (the "Closing Date") and such
other place as the parties hereto shall mutually agree.

SECTION 9.2. THE SELLER PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date,
the Seller Parties shall deliver to the Purchaser Parties the documents listed
below.


                                       34

<PAGE>

(a) Duly executed bills of sale and assignments transferring all Assets
(including all of the Seller Parties' rights under and with respect to the Air
Space Agreement) other than the Real Property in form and substance satisfactory
to MPT;

(b) A duly executed general warranty deed in substantially the form as EXHIBIT
9.2(B) (the "Deeds") conveying the Real Property to the Acquisition Sub;

(c) A certified copy of the resolutions of the governing body of the Seller
Parties dated as of the date hereof and authorizing the Seller Parties'
execution, delivery and performance of this Agreement and all other documents to
be executed in connection herewith;

(d) Certificates of existence and good standing of each Seller Party from the
secretary of state of such Seller Party's state of incorporation or
organization, dated the most recent practical date prior to the Closing Date;

(e) Certificates of good standing and foreign qualification of each Seller Party
from the secretary of state of the State of California or Delaware dated the
most recent practical date prior to the Closing Date;

(f) The Title Commitment and Title Policy in form and substance satisfactory to
MPT;

(g) A Survey dated the most recent practical date prior to the Closing Date in
form and substance satisfactory to MPT;

(h) A Phase I Environmental Site Assessment Report dated the most recent
practical date prior to the Closing Date in form and substance satisfactory to
MPT (and a Phase II if recommended by the Phase I Report);

(i) Property condition and seismic reports for the Real Property, dated the most
recent practical date prior to the Closing Date and in form and substance
satisfactory to MPT;

(j) A Zoning Compliance Letter/Certificate dated the most recent practical date
prior to the Closing Date in form and substance satisfactory to MPT;

(k) Tenant Estoppel Certificates, if any, in form and substance satisfactory to
MPT;

(l) A Landlord Collateral Assignment and Consent, in form and substance
satisfactory to MPT, for each Landlord Lease;

(m) Owner's Affidavits in form and substance satisfactory to MPT;

(n) The Search Reports dated the most recent practical date prior to the Closing
Date in form and substance satisfactory to MPT;

(o) A Non-Foreign Affidavit in form and substance satisfactory to MPT;

(p) The Lease, together with a Memorandum of Lease Agreement, in form and
substance satisfactory to MPT;


                                       35

<PAGE>

(q) A Lease Guaranty Agreement substantially in the form of EXHIBIT 9.2(P);

(r) The Assignment of Rents and Leases in substantially the form attached hereto
as EXHIBIT 9.2(Q);

(s) The Security Agreement in substantially the form attached hereto as EXHIBIT
9.2(R);

(t) The Subordination of Management Agreement in form and substance satisfactory
to MPT;

(u) The opinion of Shulman, Hodges & Bastian LLP as counsel for the Seller
Parties, substantially in the form attached hereto as Exhibit 9.2(t);

(v) At the Closing, the Seller Parties shall have furnished to the Purchaser
Parties a certificate dated the Closing Date signed by the Seller Parties to the
effect that all of the representations and warranties of the Seller Parties
contained in this Agreement (considered collectively) and each of these
representations and warranties (considered individually) remain in all respects
true and correct as of the Closing Date as if made on such date and that the
Seller Parties have performed and satisfied all covenants and conditions
required by this Agreement to be performed or satisfied by the Seller Parties on
or prior to Closing;

(w) All necessary approvals, consents, estoppel certificates and the like of
third parties or Governmental Entities to the validity and effectiveness of the
transactions contemplated hereby;

(x) The Noncompete Agreements substantially in the form attached as EXHIBIT
9.2(W);

(y) The Expansion Commitment Letter in the form attached hereto as EXHIBIT
9.2(X) (the "Expansion Commitment Letter"); and

(z) Such other instruments and documents as the Purchaser Parties reasonably
deem necessary to effect the transactions contemplated hereby.

SECTION 9.3. PURCHASER PARTIES' CLOSING DATE DELIVERABLES. On the Closing Date,
the Purchaser Parties shall deliver to the Seller Parties the documents listed
below.

(a) A certified copy of the resolutions of the governing body of each Purchaser
Party dated as of the date hereof authorizing the execution, delivery and
performance of this Agreement and all other documents to be executed in
connection herewith;

(b) Certificates of existence and good standing of each Purchaser Party from the
Secretary of State of the State of Delaware, dated the most recent practical
date prior to the Closing Date;

(c) Certificates of good standing and foreign qualification of the Acquisition
Sub from the Secretary of State of the State of California, dated the most
recent practical date prior to the Closing Date;

(d) The Lease, together with a Memorandum of Lease, in form and substance
satisfactory to MPT;


                                       36

<PAGE>

(e) The Assignment of Rents and Leases in substantially the form attached hereto
as EXHIBIT 9.2(Q);

(f) An Opinion of Baker Donelson, Bearman, Caldwell & Berkowitz, P.C., as
counsel for the Purchaser Parties substantially in the form attached as EXHIBIT
9.3(F);

(g) At the Closing, each Purchaser Party shall have furnished to the Seller
Parties a certificate dated the Closing Date signed by such Purchaser Party to
the effect that all of the representations and warranties of such Purchaser
Party contained in this Agreement (considered collectively) and each of these
representations and warranties (considered individually) remain in all respects
true and correct as of the Closing Date as if made on such date and that such
Purchaser Party has performed and satisfied in all material respects all
covenants and conditions required by this Agreement to be performed or satisfied
by such Purchaser on or prior to Closing;

(h) Any bills of sale and assignments requiring the signature of any Purchaser
Party;

(i) The Security Agreement in substantially the form attached hereto as EXHIBIT
9.2(R);

(j) The Noncompete Agreements substantially in the form attached as EXHIBIT
9.2(W); and

(k) The Expansion Commitment Letter in the form attached hereto as EXHIBIT
9.2(X).

                                    ARTICLE X

                                   TERMINATION

SECTION 10.1. TERMINATION. Notwithstanding anything to the contrary in this
Agreement, the remaining obligations of the parties hereunder may be terminated
and the transactions contemplated hereby abandoned at any time prior to Closing:
(i) by mutual written consent of the parties; (ii) by the Seller Parties if the
conditions set forth in Section 8.1 shall not have been satisfied on or before
December 31. 2005; or (iii) by the Purchaser Parties if the conditions set forth
in Section 8.2 shall not have been satisfied on or before December 31, 2005.

SECTION 10.2. NOTICE AND EFFECT. In the event of the termination of this
Agreement pursuant to this Article X, the party terminating this Agreement shall
give prompt written notice thereof to the parties, and the transactions
contemplated hereby shall be abandoned, without further action by any party.
Each filing, application and other submission relating to the transactions
contemplated hereby shall, to the extent practicable, be withdrawn from the
person to which it was made. The confidentiality provisions set forth in Article
VII of this Agreement shall survive any termination of this Agreement.
Notwithstanding any statement contained in this Agreement to the contrary,
termination of this Agreement shall not relieve any party from liability for any
breach or violation of this Agreement that arose prior to such termination.


                                       37

<PAGE>

                                   ARTICLE XI

                         CERTAIN POST-CLOSING COVENANTS

SECTION 11.1. POST-CLOSING ACCESS TO INFORMATION. The Parties acknowledge that,
subsequent to Closing, each may need access to the Assets and to information,
documents or computer data in the control or possession of the other for
purposes of concluding the transactions contemplated herein and for audits,
investigations, compliance with governmental requirements, regulations and
requests, the prosecution or defense of third party claims. Accordingly, the
Parties agree that they will make available to the other and their agents,
independent auditors and/or governmental entities such documents and information
as may be available relating to the Assets and the Hospital and will permit the
other to make copies of such documents and information at the requesting party's
expense.

SECTION 11.2. LICENSURE. To the extent not obtained as of Closing, the Seller
Parties shall use their best efforts, including the scheduling of all applicable
surveys of state or federal governmental agencies, to obtain, as soon as
possible following the Closing, all provider numbers permitting Desert Valley
Operator to participate in the Government Programs and all other licenses and
permits from Governmental Entities necessary to conduct the Business. The Seller
Parties shall immediately notify the Purchaser Parties in the event of any
controversy relating to such efforts, including any deficiencies identified by
applicable governmental agencies with respect to the aforementioned surveys, and
shall use its best efforts to remedy any such deficiencies immediately.

SECTION 11.3. SHERMAN OAKS PURCHASE AGREEMENT INDEMNIFICATION. The parties
acknowledge that certain of the Seller Parties now have or may hereafter have
certain indemnification rights and claims against Sherman Oaks pursuant to the
terms of Sherman Oaks Purchase Agreement. In the event that any such
indemnification right or claim under the Sherman Oaks Purchase Agreement shall
arise or accrue after the Closing with respect to or affecting any of the Assets
which are delivered and conveyed as of such Closing (a "Sherman Oaks Claim"),
the Seller Parties shall, after notification to Purchaser Parties (i)
immediately notify Sherman Oaks of the Sherman Oaks Claim (including all
material facts related thereto) and make a claim for indemnity against Sherman
Oaks with respect thereto pursuant to the terms of the Sherman Oaks Purchase
Agreement; (ii) immediately notify the Purchaser Parties of any and all
communications, notices or other information, whether written or oral, it
receives with respect to the Sherman Oaks Claim; (iii) coordinate with Purchaser
Parties in the exercise all of the Seller Parties' rights with respect to the
Sherman Oaks Claim (including, without limitation, the selection, engagement
and/or approval of counsel) it being understood that no Seller Party shall take
any action with respect to any Sherman Oaks Claim (except for those actions set
forth in (i) and (ii) above) without the Purchaser Party's prior written
consent; (iv) hold in trust for the benefit of the Purchaser Parties and account
for any amounts received by any Seller Party in respect of any Sherman Oaks
Claim until the final resolution of any of the Purchaser Parties' indemnity
claims against the Seller Parties hereunder which may be based on, or arise as a
consequence of, the facts and circumstances giving rise to the Sherman Oaks
Claim; and (v) not take or agree to take any action which would conflict with
its obligations to Purchaser Parties with respect to such Sherman Oaks Claim
pursuant to this Section 11.3 or which would


                                       38

<PAGE>

otherwise adversely affect any rights of the Seller Parties with respect to such
Sherman Oaks Claim.

                                   ARTICLE XII

                                 INDEMNIFICATION

SECTION 12.1. The Seller Parties' Agreement to Indemnify.

(a) Subject to the limitations set forth in this Article, the Seller Parties
agree to jointly and severally indemnify, defend and hold harmless the Purchaser
Parties, their affiliates and their respective officers, directors, members,
(general and limited) partners, shareholders, employees, agents and
representatives (collectively, the "Purchaser Indemnified Parties") from and
against all demands, claims, actions, losses, damages, liabilities, penalties,
Taxes, costs and expenses (including, without limitation, attorneys' and
accountants' fees, settlement costs, arbitration costs and any reasonable other
expenses for investigating or defending any action or threatened action)
asserted against or incurred by the Purchaser Indemnified Parties or any of them
arising out of or in connection with or resulting from (i) any breach of,
misrepresentation associated with or failure to perform under any covenant,
representation, warranty or agreement under this Agreement or the other
agreements contemplated hereby on the part of the Seller Parties; (ii) any
Excluded Liabilities (including Taxes arising prior to Closing and any liability
arising out of the ownership and operation of the Assets prior to Closing) or
(iii) any liability arising out of or relating to a breach or default by Sherman
Oaks under the Sherman Oaks Purchase Agreement or any liability or obligation
with respect to which Sherman Oaks is required to indemnify Seller Parties under
the Sherman Oaks Purchase Agreement (collectively, "Purchaser Damages").

(b) The indemnification of the Purchaser Indemnified Parties by the Seller
Parties provided for under this Article XII shall be limited in certain respects
as follows: (i) the right of the Purchaser Indemnified Parties to seek
indemnification under this Section 12.1 shall terminate on the third anniversary
of Closing (the "Purchaser's Indemnity Periods"), except that the Purchaser'
Indemnity Period shall terminate on the fifth anniversary of the Closing Date
for claims under Sections 4.15 and 4.17 and (ii) the Seller shall not be
required to indemnify the Purchaser Indemnified Parties for indemnification
claims under this Section 12.1 unless and until the aggregate amount of all
losses resulting in Purchaser' Damages exceeds One Hundred Thousand and No/100
Dollars ($100,000.00) (the "Minimum Aggregate Liability Amount") in which event
the foregoing indemnification obligation shall apply to the aggregate amount of
Purchaser Damages that exceeds One Hundred Thousand and No/100 Dollars
($100,000.00); provided, however, that the maximum liability of the Seller
Parties under this Agreement shall be an amount equal to the Purchase Price. The
foregoing limitations on time and amount shall not apply to any Purchaser
Damages arising or resulting from (i) any act or omission of any Seller Party
which constitutes fraud, (ii) any breach by any Seller Party of its post-closing
covenants; (iii) any Encroachment Issue; or (iv) the Excluded Liabilities.

SECTION 12.2. THE PURCHASER PARTIES' AGREEMENT TO INDEMNIFY.

(a) Subject to the limitations set forth in this Article, the Purchaser Parties
jointly and severally agree to indemnify, defend and hold harmless the Seller
Parties, their Affiliates and


                                       39

<PAGE>

their respective officers, directors, members, purchasers, shareholders,
employees and representatives (collectively, the "Seller Indemnified Parties")
from and against all demands, claims, actions, losses, damages, liabilities,
penalties, Taxes, costs and expenses (including, without limitation, reasonable
attorneys' fees, settlement costs, arbitration costs and any reasonable other
expenses for investigating or defending any action or threatened action)
asserted against or incurred by any of the Seller Indemnified Parties or any of
them arising out of or in connection with or resulting from (i) any breach of,
misrepresentation associated with or failure to perform under any covenant,
representation, warranty or agreement under this Agreement or the other
agreements contemplated hereby on the part of any Purchaser Party; or (ii) the
use, ownership or operation of any of the Assets after Closing (collectively,
"Seller Damages").

(b) The indemnification of the Seller Indemnified Parties by the Purchaser
Parties provided for under this Article XII shall be limited in certain respects
as follows: (i) the right of the Seller Indemnified Parties to seek
indemnification under this Section 12.2 shall terminate on the first anniversary
of Closing (the "Seller Indemnity Period"), and (ii) the Purchaser Parties shall
not be required to indemnify the Seller Indemnified Parties for indemnification
claims under this Section 12.2 unless and until the amount of all losses
resulting in Seller Damages exceeds One Hundred Thousand and No/100 Dollars
($100,000.00) in which event the foregoing indemnification obligation shall
apply to the aggregate amount of Seller Damages that exceeds One Hundred
Thousand and No/100 Dollars ($100,000.00); provided, however, that the maximum
liability of the Purchaser Parties under this Agreement shall be an amount equal
to the Purchase Price. The foregoing limitation on time and amount shall not
apply to any Seller Damages arising or resulting from any act or omission of any
Purchaser Party which constitutes fraud, any breach by any Purchaser Party of
its post-closing covenants.

SECTION 12.3. NOTIFICATION AND DEFENSE OF CLAIMS.

(a) A party entitled to be indemnified pursuant to Section 12.1 or Section 12.2
(the "Indemnified Party") shall notify the party liable for such indemnification
(the "Indemnifying Party") in writing of any claim or demand which the
Indemnified Party has determined has given or could give rise to a right of
indemnification under this Agreement, as soon as possible after the Indemnified
Party becomes aware of such claim or demand; provided, that the Indemnified
Party's failure to give such notice to the Indemnifying Party in a timely
fashion shall not result in the loss of the Indemnified Party's rights with
respect thereto except to the extent the Indemnified Party is materially
prejudiced by the delay.

If the Indemnified Party shall notify the Indemnifying Party of any claim or
demand pursuant to the provisions hereof, and if such claim or demand relates to
a claim or demand asserted by a third party against the Indemnified Party (a
"Third Party Claim"), the Indemnifying Party shall have the obligation either
(i) to pay such claim or demand, or (ii) defend any such Third Party Claim with
counsel reasonably satisfactory to the Indemnified Party. After the Indemnifying
Party has assumed the defense of such Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party under this Section 12 for any legal
or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation, provided
that the Indemnified Party shall have the right to employ counsel, at the
Indemnifying Party's expense, to represent it if (A) in the Indemnified Party's
reasonable opinion the Indemnifying Party is not diligently prosecuting the
defense of such Third Party


                                       40

<PAGE>

Claim, (B) such Third Party Claim involves remedies other than monetary damages
and such remedies, in the Indemnified Party's reasonable judgment, could have a
material adverse effect on such Indemnified Party, (C) the Indemnified Party may
have available to it one or more defenses or counterclaims that are inconsistent
with one or more defenses or counterclaims that may be alleged by the
Indemnifying Party, or (D) the Indemnified Party believes in its reasonable
discretion that a conflict of interest exists between the Indemnifying Party and
the Indemnified Party with respect to such Third-Party Claim or action, and in
any such event the reasonable fees and expenses of such separate counsel for the
Indemnified Party shall be paid by the Indemnifying Party. The Indemnified Party
shall make available to the Indemnifying Party or its agents all records and
other materials in the Indemnified Party's possession reasonably required by it
for its use in contesting any Third-Party Claim or demand.

(b) No Indemnified Party may settle or compromise any claim or consent to the
entry of any judgment with respect to which indemnification is being sought
hereunder without the prior written consent of the Indemnifying Party, unless
(i) the Indemnifying Party fails to assume and diligently prosecuting the
defense of such claim or (ii) such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party from all liability arising out
of such claim and does not contain any equitable order, judgment or term which
includes any admission of wrongdoing or could result in any liability (including
regulatory liability) of the Indemnifying Party or which would otherwise in any
manner affect, restrain or interfere with the business of the Indemnifying Party
or any Affiliate of the Indemnifying Party. An Indemnifying Party may not,
without the prior written consent of the Indemnified Party, settle or compromise
any claim or consent to the entry of any judgment with respect to which
indemnification is being sought hereunder unless such settlement, compromise or
consent includes an unconditional release of the Indemnified Party from all
liability arising out of such claim and does not contain any equitable order,
judgment or term which includes any admission of wrongdoing or could result in
any liability (including regulatory liability) of the Indemnified Party or which
would otherwise in any manner affect, restrain or interfere with the business of
the Indemnified Party or any of the Indemnified Party's Affiliates.

SECTION 12.4. INVESTIGATIONS. The right to indemnification based upon breaches
or inaccuracies of representations, warranties and covenants will not be
affected by any investigation conducted with respect to, or knowledge acquired
(or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, whether as a
result of disclosure by a party pursuant to this Agreement or otherwise, with
respect to the accuracy or inaccuracy of or compliance with any such
representation, warranty or covenant. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant, will not affect a party's right to
indemnification, payment of damages or other remedies based on such
representations, warranties and covenants.

SECTION 12.5. TREATMENT OF INDEMNIFICATION PAYMENTS. All indemnification
payments made pursuant to this Article XII shall be treated by the parties for
income Tax purposes as adjustments to the Purchase Price, unless otherwise
required by applicable Law.


                                       41

<PAGE>

SECTION 12.6. EXCLUSIVE REMEDY. FROM AND AFTER THE APPLICABLE CLOSING, THE
PARTIES AGREE AND ACKNOWLEDGE THAT THE INDEMNIFICATION RIGHTS PROVIDED IN THIS
ARTICLE XII SHALL BE THE SOLE AND EXCLUSIVE REMEDY OF THE PARTIES TO THIS
AGREEMENT FOR BREACHES OF THIS AGREEMENT AND FOR ALL DISPUTES ARISING UNDER OR
RELATING TO THIS AGREEMENT AND ANY ADDITIONAL AGREEMENTS OR DOCUMENTS EXECUTED
OR DELIVERED IN OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT
FOR POST-CLOSING COVENANTS, CASES WHERE SPECIFIC PERFORMANCE IS AVAILABLE AS A
REMEDY AND EXCEPT IN CASES OF FRAUD.

SECTION 12.7. LIMITATION OF LIABILITY OF SELLER PARTIES. Notwithstanding any
other provision of this Agreement, the liability of all of the Seller Parties,
other than Desert Valley Operator (the "Guarantors") under this Agreement for
any reason shall continue in full force and effect until the second (2nd)
anniversary of the date hereof, whereupon the liability of the Guarantors under
this Agreement, the Lease, and any other commitments, guarantees, obligations or
liabilities of the Guarantors under the transactions pertaining thereto, shall
be collectively limited to a maximum of Five Million Dollars ($5,000,000.00) in
the aggregate. Thereafter, when Lessee satisfies the covenants set forth in
Section 16.2 of the Lease, tested by reference to Lessee only for a period of
two (2) consecutive fiscal years, all the obligations of the Guarantors under
this Agreement, the Lease and all other agreements entered into pursuant to the
terms of this Agreement shall terminate.

                                  ARTICLE XIII

                               DISPUTE RESOLUTION

SECTION 13.1. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
EXECUTED AND PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES.

SECTION 13.2. JURISDICTION AND VENUE. THE PARTIES CONSENT TO PERSONAL
JURISDICTION IN DELAWARE. THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING
ARISING FROM OR RELATED TO THIS AGREEMENT SHALL BE BROUGHT AND TRIED EXCLUSIVELY
IN THE STATE OR FEDERAL COURTS OF DELAWARE. EACH OF THE PARTIES IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT. THE SELLER PARTIES EXPRESSLY
ACKNOWLEDGE THAT DELAWARE IS A FAIR, JUST AND REASONABLE FORUM AND AGREE NOT TO
SEEK REMOVAL OR TRANSFER OF ANY ACTION FILED BY THE MPT PARTIES IN SAID COURTS.
FURTHER, THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY CLAIM THAT SUCH
SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SERVICE OF
ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED MAIL ADDRESSED TO A PARTY
AT THE ADDRESS DESIGNATED PURSUANT TO THIS SECTION 13.2 SHALL BE EFFECTIVE
SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT. A FINAL


                                       42

<PAGE>

JUDGMENT IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE
ENFORCED IN ANY OTHER COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY
BE SUBJECT.

                                   ARTICLE XIV

                                  MISCELLANEOUS

SECTION 14.1. ASSIGNMENT. This Agreement is not assignable by any party without
the prior written consent of the other party hereto. Notwithstanding the
foregoing, the Purchaser Parties may at any time and without the consent of the
Seller Parties assign all of their respective rights and obligations hereunder
to one or more of its Affiliates; provided, however, that no such assignment
shall relieve or release such Purchaser Parties from their obligations
hereunder.

SECTION 14.2. NOTICE. All notices, demands, requests and other communications or
documents required or permitted to be provided under this Agreement shall duly
be in writing and shall be given to the applicable party at its address or
facsimile number set forth below or such other address or facsimile number as
the party may later specify for that purpose by notice to the other party:

     If to any Seller Party:     Prime Healthcare Services, Inc.
                                 16850 Bear Valley Road
                                 Victorville, California 92392
                                 Attention: Lex Reddy

     With a copy to:             Prime Healthcare Services, Inc.
                                 16850 Bear Valley Road
                                 Victorville, California 92392
                                 Attention: Richard Hayes, Esq.

     If to any Purchaser Party   c/o Medical Properties Trust, Inc.
                                 1000 Urban Center Drive, Suite 501
                                 Birmingham, AL 35242
                                 Attention: Edward K. Aldag, Jr.

     With a copy to:             Baker, Donelson, Bearman, Caldwell &
                                 Berkowitz, PC
                                 420 20th Street North, Suite 1600
                                 Birmingham, Alabama 35203
                                 Attention: Thomas O. Kolb, Esq.

Each notice shall, for all purposes, be deemed given and received:

     (i) if by hand, when delivered;

     (ii) if given by nationally recognized and reputable overnight delivery
     service, the Business Day on which the notice is actually received by the
     party; or


                                       43

<PAGE>

     (iii) if given by certified mail, return receipt requested, postage
     prepaid, the date shown on the return receipt.

SECTION 14.3. CALCULATION OF TIME PERIOD. When calculating the period of time
before which, within which or following which any act is to be done or step
taken, the date that is the reference date in calculating such period shall be
excluded. If the last day of such period is a non-Business Day, the period in
question shall end as of the next succeeding Business Day.

SECTION 14.4. CAPTIONS. The section and paragraph headings or captions appearing
in this Agreement are for convenience only, are not a part of this Agreement,
and are not to be considered in interpreting this Agreement.

SECTION 14.5. ENTIRE AGREEMENT; MODIFICATION. This Agreement, including the
Exhibits and Schedules attached hereto, and other written agreements executed
and delivered at Closing by the parties hereto, constitute the entire agreement
and understanding of the parties with respect to the subject matter of this
Agreement. This Agreement supersedes any prior oral or written agreements
between the parties with respect to the subject matter of this Agreement. It is
expressly agreed that there are no verbal understandings or agreements which in
any way change the terms, covenants, and conditions set forth in this Agreement,
and that no modification of this Agreement and no waiver of any of its terms and
conditions shall be effective unless it is made in writing and duly executed by
the parties hereto.

SECTION 14.6. SCHEDULES AND EXHIBITS. All Schedules and Exhibits referred to in
this Agreement and attached hereto shall be deemed a part of this Agreement and
are hereby incorporated herein by reference.

SECTION 14.7. FURTHER ASSURANCES. From time to time after the Closing and
without further consideration, the Seller Parties shall execute and deliver to
the Purchaser Parties such instruments of sale, transfer, conveyance,
assignment, consent or other instruments as may be reasonably requested by the
Purchaser Parties in order to vest all right, title and interest of the
applicable Seller Parties in and to the Assets conveyed and delivered at the
Closing or as otherwise required to carry out the purpose and intent of this
Agreement.

SECTION 14.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Executed signature pages
to this Agreement may be delivered by facsimile transmission and any such
signature page shall be deemed an original.

SECTION 14.9. EXPENSES. The Seller Parties shall pay all costs and expenses
incurred by the Seller Parties and Purchaser Parties in connection with the
transactions contemplated hereby, including, without limitation, all document
stamps, transfer, excise, recording, gains, sales, bulk sales, use and similar
conveyance Taxes and fees imposed by reason of and associated with the
transactions contemplated hereby and by deficiency, interest or penalty asserted
with respect thereto, as well as the cost of the survey, the title insurance and
all title endorsements required by the Purchaser Parties and its lenders, and
all attorneys' fees and expenses. Notwithstanding the foregoing, the obligation
of Seller Parties to pay legal expenses of Purchaser Parties, shall not exceed
the sum of Seventy Five Thousand Dollars ($75,000.00).


                                       44

<PAGE>

SECTION 14.10. SYNDICATION. Subject to applicable healthcare regulatory
requirements, MPT will offer up to twenty percent (20%) of the equity interests
in Acquisition Sub to local or area physicians at such time following closing as
determined by MPT. MPT and the Seller Parties will work together to decide which
physicians receive an opportunity to invest in the Acquisition Sub.

SECTION 14.11. SECURITIES OFFERING AND FILINGS. Notwithstanding anything
contained herein to the contrary, the Seller Parties agree to cooperate with MPT
in connection with any securities offerings and filings, or MPT's efforts to
procure or maintain financing for or related to the Real Property and
Improvements, and in connection therewith, the Seller Parties shall furnish MPT
with such financial and other information as MPT shall request. MPT may disclose
that it has entered into this Agreement with the Seller Parties and may provide
and disclose information regarding this Agreement, the Seller Parties, the Real
Property and Improvements, and such additional information which MPT may
reasonably deem necessary, to its proposed investors in such public offering or
private offering of securities, or any current or prospective lenders with
respect to such financing. Upon reasonable advance notice, MPT and any lender
providing financing for the Real Property shall have the right to access,
examine and copy all agreements, records, documentation and information relating
to the Seller Parties, the Real Estate and Improvements, and to discuss such
affairs and information with the officers, employees and independent public
accountants of the Seller Parties as often as may reasonably be desired, but
subject to the terms of a confidentiality agreement, as reasonably approved by
the parties.

SECTION 14.12. BINDING EFFECT. This Agreement shall bind and inure to the
benefit of the parties hereto and their successors and assigns; provided,
however, that this Agreement shall not inure to the benefit of any assignee
pursuant to an assignment which violates the terms of this Agreement.

                   [Signatures appear on the following page.]


                                       45

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers on the date first written above.

                                        PURCHASER PARTIES:

                                        MPT OPERATING PARTNERSHIP, L.P.


                                        By: /s/ Edward K. Aldag, Jr.
                                            ------------------------------------
                                        Name: Edward K. Aldag, Jr.
                                        Title: President and Chief
                                               Executive Officer


                                        MPT OF SHERMAN OAKS, LLC
                                        BY: MPT OPERATING PARTNERSHIP, L.P.
                                        ITS: SOLE MEMBER


                                        By: /s/ Edward K. Aldag, Jr.
                                            ------------------------------------
                                        Name: Edward K. Aldag, Jr.
                                        Title: President and Chief
                                               Executive Officer

<PAGE>

                                        SELLER PARTIES:

                                        PRIME HEALTHCARE SERVICES II, LLC


                                        By: /s/ Lex Reddy
                                            ------------------------------------
                                        Name: Lex Reddy
                                              ----------------------------------
                                        Title: President/CEO
                                               ---------------------------------


                                        PRIME HEALTHCARE SERVICES, INC.


                                        By: /s/ Lex Reddy
                                            ------------------------------------
                                        Name: Lex Reddy
                                              ----------------------------------
                                        Title: President/CEO
                                               ---------------------------------


                                        DESERT VALLEY HOSPITAL, INC.


                                        By: /s/ Lex Reddy
                                            ------------------------------------
                                        Name: Lex Reddy
                                              ----------------------------------
                                        Title: President/CEO
                                               ---------------------------------


                                        DESERT VALLEY MEDICAL GROUP, INC.


                                        By: /s/ Lex Reddy
                                            ------------------------------------
                                        Name: Lex Reddy
                                              ----------------------------------
                                        Title: Secretary
                                               ---------------------------------

<PAGE>

                                        PRIME A INVESTMENTS, L.L.C.


                                        By: /s/ Prem Reddy
                                            ------------------------------------
                                        Name: Prem Reddy, M.D.
                                              ----------------------------------
                                        Title: Manager - Real Estate
                                               ---------------------------------

<PAGE>

                                    EXHIBIT A

                                      LEASE

                                [See attachment.]

<PAGE>

                                    EXHIBIT B

                                 LANDLORD LEASES

<PAGE>

                                    EXHIBIT C

                     LEGAL DESCRIPTION OF THE REAL PROPERTY

<PAGE>

                                 EXHIBIT 9.2(B)

                                      DEED

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.2(P)

                            LEASE GUARANTY AGREEMENT

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.2(Q)

                         ASSIGNMENT OF RENTS AND LEASES

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.2(R)

                               SECURITY AGREEMENT

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.2(T)

                 LEGAL OPINION OF SHULMAN, HODGES & BASTIAN LLP

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.2(W)

                              NONCOMPETE AGREEMENTS

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.2(X)

                           EXPANSION COMMITMENT LETTER

                                [See attachment.]

<PAGE>

                                 EXHIBIT 9.3(F)

      LEGAL OPINION OF BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C.

                                [See attachment.]