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                                                                  EXHIBIT 10.123

                     MENTAL HEALTH INPATIENT HOSPITALIZATION

                               SERVICES AGREEMENT

         This MENTAL HEALTH INPATIENT HOSPITALIZATION SERVICES AGREEMENT
("Agreement") is entered into for reference purposes only as of the __ day of
December, 1999, by and between San Fernando Community Hospital, a California
nonprofit public benefit corporation doing business as Mission Community
Hospital and San Fernando Community Hospital ("Hospital") and OptimumCare
Corporation, a Delaware corporation ("Manager").

                                    RECITALS

A.       Hospital owns and operates a duly license acute care hospital which
         operates at locations in San Fernando and Panorama City, California.

B.       The San Fernando location ("Facility") includes an adult inpatient
         short-term crisis intervention psychiatric program (the "Program") for
         the treatment of psychiatric disorders for patients eighteen (18) years
         of age or older whose length of stay is less than or equal to eight (8)
         days.

C.       Manager is in the business of providing a variety of consulting,
         administrative and management services to facilities who treat patients
         with psychiatric disorders.

D.       Manager presently provides various services to the Program at the
         Facility, and Hospital desires to retain Manager, and Manger desires to
         be retained, to provide certain services with respect to the Program.

E.       Hospital and Manager desire to enter into this Agreement to provide a
         clear understanding of their respective rights, duties and obligations
         with respect to the subject matter hereof.

                                    AGREEMENT

                                    ARTICLE 1
                        MANAGER'S RIGHTS AND OBLIGATIONS

         1.1  General Intent and Purpose.

              1.1.1 Management Expectations. Manager will manage the Program
in accordance with the mission, vision and values of Hospital, the Hospital's
strategic plan, the Hospital's compliance plan, and the Hospital's annual budget
and operating plan. Manager's management responsibilities shall be fulfilled
within the policies, procedures and organizational structure of the Hospital, as
it may exist from time to time. Manager's Program Administrator, Medical
Director, and Director of Inpatient Psychiatric Nursing, as such terms are
defined in Section 1.2 hereof, shall perform their responsibilities of
management in accordance with the management structure and standards as required
of Hospital employed managers and Hospital

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contracted Medical Directors, as such standards and structure may exist from
time to time. Although Hospital shall have the right, in its sole discretion
from time to time, to change its management structure and standards, as of the
commencement of the Agreement and until notice to Manager, the Program
Administrator shall be a member of Hospital's Senior Management Team. Manager
shall assure that all services are managed in accordance with the rules and
regulations that regulate the provision of psychiatric services, including but
not limited to assuring that all issues related to patient movement into and out
of the Program are accomplished within the guidelines established by the Los
Angeles County Department of Mental Health, in accordance with state and federal
law, and in accordance with all Hospital policies. Manager will provide
expertise to Hospital to recommend, and after approval by Hospital, to implement
appropriate Hospital policies, procedures, rules and regulations. It is
anticipated that all personnel provided by Manager will comply with all of the
requirements established for Hospital personnel, including but not limited to,
orientation, safety, health and assuring that any of Manager's personnel who
oversee or direct Hospital employees do so in accordance with Hospital's human
resources policies as they may be established by Hospital from time to time. On
an annual basis, and more often if specified by Hospital, the Chief Executive
Officer of Hospital ("CEO") or his designee shall perform a performance
appraisal of the Manager's Program Administrator, Medical Director, and Nursing
Director, similar to performance appraisals of individuals with management
responsibilities or directorship agreements at Hospital.

              1.1.2 Administration and Clinical Management. Subject to
Hospital's ultimate retention of control and authority, Manager shall assist
Hospital in the administration and clinical management of the Program and report
to Hospital daily as to the administration of the Program and the care and
treatment of Program patients while at the Facility in accordance with and
subject to the patient's physician's orders. Manager does not provide
psychiatric care (including diagnosis, development of individual treatment
plans, determining changes in the care place and discharge planning), which care
is provided by licensed physicians who are members in good standing of
Hospital's Medical Staff with appropriate privileges.

         1.2  Manager's Provision of Staffing.

              1.2.1 Program Administrator and Medical Director, Staffing.
Manager shall employ and/or independently contract with, and shall be
financially responsible for staffing the Program with;

                    (a) one full-time Program Administrator ("Program
Administrator") who shall work full-time exclusively at Facility and who shall
meet the criteria and fulfil the duties set forth in Exhibit 1.2.1.(a). The
parties hereby acknowledge and agree that the Manager's total cost of providing
the Program Administrator (including wages, Employee Benefits [as defined in
Section 2.5] and overhead) is deemed, for the purposes of this Agreement, and as
the parties' best estimate of fair market value, is the amount set forth in
Exhibit 1.2.1.(a); and

                    (b) one medical director ("Medical Director") who shall
provide not less than thirty (30) hours of administrative services for the
Program per month and who shall meet the criteria and terms set forth in Exhibit
1.2.1(b). The parties hereby acknowledge and agree that

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the Medical Director's compensation is deemed, for the purposes of this
Agreement, and as the parties' best estimate of fair market value, is the amount
set forth in Exhibit 1.2.1.(b); and

                    (c) one full-time Director of Inpatient Psychiatric Nursing
Service ("Nursing Director") who shall work exclusively at Facility and shall
meet the criteria and fulfil the duties set forth in Exhibit 1.2.1.(c). The
parties hereby acknowledge and agree that the Manager's total cost of providing
the Nursing Director (including wages, Employee Benefits [as defined in Section
2.5] and overhead) deemed, for the purposes of this Agreement, and as the
parties best estimate of fair market value, is the amount set forth in Exhibit
1.2.1.(c).

              1.2.2. Additional Personnel Staffing. Manager shall employ and/or
independently contract with and shall be financially responsible for staffing
the Program with professional counseling staff, therapists, case managers and
utilization review managers and staff, in the categories, at the staffing
levels, and at the costs (cumulatively for each category), including wages and
Employee Benefits and overhead, as set forth in Exhibit 1.2.2.

              1.2.3 Need for Staffing. The staffing set forth in Section 1.2
hereof is based upon the anticipated Program needs to operate the Program as
required (i) by applicable State and Federal law and regulation as required for
licensure and accreditation and for certification for participation in and
reimbursement from the Medicare and Medi-Cal programs, (ii) the Program's
reasonable requirements, and (iii) community standards.

              1.2.4 Changes to Staffing Levels. Manager shall not, without
Hospital's prior written consent, which shall not be unreasonably withheld,
deviate from, change, or decrease the agreed staffing levels as set forth in
this Section 1.2.

              1.2.5 Staff Compensation. Manager is solely responsible for
compensating the individuals Manager provides hereunder, including Employee
Benefits, and shall defend and hold Hospital harmless from claims for
compensation or Employee Benefits from such individuals. "Employee Benefits"
shall include, by way of illustration and not limitation, an employer's
contribution under the Federal Insurance Contributions Act, unemployment
compensation and related insurance, payroll and other employment taxes, pension
and retirement plan contributions, workers= compensation and related insurance,
group life, health, disability, and accident insurance, severance, and other
benefits. In entering into or continuing any financial relationship (e.g.,
ownership or compensation arrangements) with any physicians and their immediate
family members (as defined under the Stark law at 42 U.S.C. '1395nn and Cal.
Bus. & Prof. Code " 650.01 et seq.), Manager shall assure that such financial
arrangements meet the requirements of an applicable exception under those laws
such that Hospital is not prohibited from presenting any claims for services
pursuant to such physician self-referral laws.

              1.2.6 Acceptability of Staff Members. Prior to retaining any
individuals to provide services at Facility pursuant to Section 1.2 hereof.
Manager shall obtain the prior written approval of such individual from the CEO.
Manager shall submit such information regarding proposed personnel as the CEO
reasonably requests. Manager shall use reasonable efforts to resolve any issues
regarding the acceptability to Hospital of Program staff employed or otherwise

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contracted for by Manager. All professional individuals, including Medical
Director, provided by Manager, shall meet the applicable standards of Hospital's
Medical Staff Bylaws.

              1.2.7 Removal of Staff Member. At the request of Hospital, in its
sole and absolute discretion, Manager shall immediately remove any employee or
independent contractor of Manager from providing services at the Facility or to
the Program.

              1.2.8 Staff Member Conduct and Care. Manager shall cause all
employees and independent contractors of Manager at all times to conduct their
activities in compliance with all bylaws, rules and regulations, policies and
procedures of Hospital and its medical staff and in compliance with all
applicable federal, state and local laws and regulations, and with the standards
and requirements established by the Joint Commission on Accreditation of
Healthcare Organizations and other relevant professional organizations pertinent
to the operation of the Program.

         1.3  Licensure and Accreditation. Manager shall advise and assist
Hospital in order for Hospital to obtain all necessary licenses and approvals
from governmental and accrediting agencies, including the Joint Commission on
the Accreditation of Healthcare Organizations, and in order for Hospital to
obtain all certifications and approvals necessary to participate in the Medicare
and Medi-Cal programs. Manager shall advise and assist Hospital to assure
Hospital timely undertakes all activities necessary to obtain and maintain all
necessary licenses and approvals from governmental and accrediting agencies,
including without limitation, the California Department of Health Services, and
is responsible for timely advising and assisting Hospital to undertake all
activities necessary to maintain all certifications and approvals necessary to
participate in the Medi-Cal and Medicare programs are performed. Manager shall
advise and assist Hospital to enable Hospital to timely prepare, file, and
supplement all regulatory applications, reports, and forms required by any
local, state or federal regulatory agency and shall prepare the Facility for,
and monitor, regulatory surveys and inspections of the Program. Manager shall
use its best efforts to assure that Hospital promptly remedies any deficiencies
identified in such surveys and inspections to the extent such deficiencies are
within Manager's control. If the subject matter of the deficiency is Manager's
responsibility hereunder, Manager shall promptly correct such deficiency.
Manager shall use its best efforts to assure that the Program and the Facility
are operated and maintained in compliance with all applicable federal, state,
and local laws, rules and regulations.

         1.4  Policies and Procedures.

              1.4.1 Development and Implementation of Policies and Procedures.
Manager shall develop and recommend, and upon Hospital's approval, assist
Hospital in implementing all policies and procedures necessary for the safe and
efficient operation of the Program, and shall educate Program staff on such
policies and procedures. The foregoing shall include, but not be limited to,
proposed policies and procedures for performance improvement and utilization
review which are consistent with Hospital's policies and procedures for
performance improvement and utilization review in other Hospital programs and
services. Manager shall develop and recommend, and following Hospital approval
implement, clinical treatment programs and

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protocols for non-physician care that are reflective of current unrecognized
standards for psychiatric programs. Manager shall provide orientation and
training for all Program staff, irrespective of whether such staff members are
employees or independent contractors of Hospital or Manager. Manager shall
assure that all personnel who provide services at the Facility participate in
Hospital's orientation for new Facility employees. Manager shall as reasonably
necessary provide ongoing in-service training such as to assure that Program
staff have the requisite knowledge and skill required to delivery quality
healthcare services at the Facility and through the Program.

              1.4.2 Hospital Approval. The implementation of the policies and
procedures and clinical treatment programs required under Section 1.4 shall be
subject to prior approval by the Hospital's administration and, where
appropriate, the Hospital's medical staff.

              1.4.3 Compliance Plan. Manager shall require that all personnel
provided by Manager to work at Hospital or to provide services on behalf of
Hospital at all times comply with Hospital's Compliance Plan and its components
as they may be in effect from time to time.

         1.5  Indemnification by Manager. Manager shall protect, indemnify, hold
harmless, and defend Hospital, its legal representatives, employees, agents,
officers, trustees, affiliates and assigns, and each of them, from and against
any and all claims, actions, demands, proceedings, losses, damages, costs,
expenses and liabilities (including reasonable attorneys= fees) arising out of
or related to the performance or nonperformance by Manager of any obligations to
be performed or services to be provided hereunder. This indemnification
obligation survives the expiration or earlier termination of this Agreement.

         1.6  Insurance.

              1.6.1 General Liability Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereof, a policy or
policies of comprehensive general liability and malpractice insurance covering
itself and the individuals it provides pursuant to Section 1.2 hereof from an
insurance carrier licensed and authorized to sell or approved to place liability
insurance policies of this nature by the State of California with limits of not
less than Five Million Dollars ($5,000,000) per occurrence. Manager shall cause
to be issued to Hospital, by the insurance carriers issuing such coverage,
certificates of insurance evidencing that the foregoing covenants of this
Agreement have been complied with and stating that said insurance carriers shall
provide not less than ten (10) calendar days prior written notice to Hospital of
any cancellation or material modification of the policy or coverage described
herein, or, if any such carrier shall not agree to provide such notice, then
Manager shall provide notice to Hospital of any such cancellation or
modification immediately upon receipt of notice of the foregoing from the
carrier. Any deductible, co-insurance, or aggregate limits shall be subject to
Hospital's approval, which shall not be unreasonably withheld.

              1.6.2 Workers Compensation Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereon, a policy or
policies of workers' compensation insurance covering its employees from an
insurance carrier licensed and authorized to sell or approved to place such
liability insurance policies of this nature by the State of California. Manager
shall add Hospital as an additional insured on such policy.

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              1.6.3 Extended Reporting Period. If any liability insurance policy
procured pursuant to Section 1.6 is on a "claims made" rather than "occurrence"
basis, then such policy shall include an option to purchase a "tail" or an
extended reporting period, which option shall be exercisable upon termination or
cancellation of said policy or upon any material modification of said policy
that has the effect of causing the coverage of said policy to fail, in any
respect, to meet the requirements of Section 1.6, regardless of whether such
termination, cancellation or modification shall occur during the term hereof or
thereafter. The tail or extended reporting period shall provide coverage meeting
all of the requirements set forth in Section 1.6, for a period of at least seven
(7) years after termination, cancellation or modification of the underlying
policy. Such policy shall provide that the carrier shall give Hospital or Manger
at least thirty (30) calendar days advance written notice of the date upon which
the option may be exercised regardless of whether such date shall occur during
the term hereof or thereafter and shall specifically provide that Hospital shall
be permitted to exercise the option upon failure of Manager to do so. Upon such
notice, Manager shall take all steps, including but not limited to the payment
of money, necessary to exercise such option, and if Manager shall fail to
effectively exercise such option, then Hospital may do so and Manager shall
fully and immediately reimburse Hospital, within ten (10) calendar days notice
thereof by Hospital, for all monies expended by Hospital in connection
therewith. The provisions of this Section 1.6.3 survive the expiration or
earlier termination of this Agreement.

         1.7  Record keeping and Access to Documents. Manager shall take all
actions required by the Medicare or Medi-Cal programs to generate and maintain
all necessary records as may be required of Hospital by the Medicare or Medi-Cal
programs. Such records are the property of Hospital. In addition, for the
purpose of implementing Section 1861(v)(1)(1) of the Social Security Act, as
amended, and any regulations promulgated pursuant thereto, Manager agrees to
comply with the following statutory requirements governing the maintenance of
documentation to verify the cost of services rendered under this Agreement:

              (i) until the expiration of four years after the furnishing of
such services pursuant to such contract, Manager shall make available, upon
written request to the Secretary of the U.S. Department of Health and Human
Services, or upon request to the Comptroller General, or any of their duly
authorized representatives, the contract and books, documents, and records of
such costs, and

              (ii) if Manager carries out any of the duties of the contract
through a subcontract with a value or cost of Ten Thousand Dollars ($10,000) or
more over a twelve-month period, with a related organization, such subcontract
shall contain a clause to the effect that until the expiration of four years
after the furnishing of such services pursuant to such a subcontract, the
related organization shall make available, upon written request to the
Secretary, or upon request to the Comptroller General, or any of their duly
authorized representatives, the subcontract and books, documents, and records of
such organization that are necessary to verify the nature and extent of such
costs.

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         1.8  Audit Disclosure. If Manager is requested to disclose books,
documents, or records for purposes of an audit, Manager shall notify Hospital of
the nature and scope of such request and Manager shall make available, upon
written request of Hospital, all such books, documents, or records, during
regular business hours of Manager. The provisions of Sections 1.7 and 1.8
survive the expiration or earlier termination of this Agreement.

         1.9  Reports.

              1.9.1 Monthly Report. Manager shall provide monthly written
reports to Hospital administration which detail the staffing provided each day
during the prior month pursuant to Article I of this Agreement. Such monthly
reports shall accompany Manager's invoice as required pursuant to Section 4.3.3
of this Agreement. The monthly reports shall include such detail as reasonably
requested by Hospital, the submission of such reports to Hospital to be an
express condition precedent to Hospital obligation to pay to Manager the
Management Fee as required by Section 4 of this Agreement.

              1.9.2 Quarterly Report. Manager shall provide quarterly written
reports to Hospital administration regarding all aspects of the operations of
the Program. Such quarterly reports shall address, among other things, the
therapies provided to patients, any notable therapeutic successes or failures
experienced by patients of the Program, any changes in Program staff, any
complaints received by Manager regarding the operation and administration of the
Program and the Facility, Program census, staffing provided the Program by
Manager, and such other information regarding the staffing, and any other items
or issues significant to the administration of the Program requested by
Hospital.

         1.10 Adverse Actions. Manager shall commit no act or omission which
adversely affects any licensure or certification of the Hospital.

         1.11 Admissions and Professional Services. Patients only shall be
admitted by Hospital pursuant to an order by a physician member of Hospital's
medical staff with admitting privileges. Manager shall assure that medical
treatment shall only be ordered and provided by physicians who are members of
Hospital's medical staff with appropriate clinical privileges. To the extent
that Manager or its personnel makes Section 5150 assessments of individuals and
places holds on such individuals at the Facility, Manager shall comply with all
requirements of Section 5150 and the associated regulations and policies adopted
by the County of Los Angeles.

         1.12 Additional Reports. Manager shall prepare an annual report for the
CEO regarding the Program. The Senior Management of Manager's Corporate Offices
shall meet with the CEO and/or his designee upon the CEO's request, the
foregoing to occur at least on a quarterly basis. Manager shall require that the
Program Administrator and Nursing Director provide periodic reports in
accordance with the requirements and expectations of other Hospital managers.
Manager shall promptly provide Hospital with reports and information that
Hospital reasonably requests with respect to the Program, including but not
limited to admissions and discharges.

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         1.13 Additional Duties. Manager shall provide the additional duties set
forth in Exhibit 1.13.

                                   ARTICLE II.
                        HOSPITAL's RIGHTS AND OBLIGATIONS

         2.1  Ultimate Control. Hospital shall have and maintain throughout the
period hereof ultimate control and authority for the operation of the Program.
Not to limit the foregoing, all admissions to the Program shall be in compliance
with the admissions criteria which is established by Hospital after considering
Manager's recommendations. Hospital has ultimate authority and control regarding
decisions to accept a patient.

         2.2  Space. Hospital shall continue to provide the space currently
being provided for the Program which Manger agrees is adequate in all respects
for the proper operation of the Program. Such space includes the fifty-six (56)
bed contiguous space, administrative space, non-exclusive meeting space, and
non-exclusive counseling space. Hospital shall be free to make any changes it
desires to the Facility, or to relocate the Program so long as such changes do
not materially and adversely interfere with the ability of Manager or Hospital
to carry out their duties hereunder.

         2.3  Hospital's Employees. Except for those positions designated to be
provided by Manager, Hospital shall employ, or shall independently contract
with, and shall be financially responsible for staffing the Program with all
personnel necessary for the proper and efficient administration and clinical
operation of the Program, including registered nurses, licensed vocational
nurses and mental health workers, the foregoing in numbers appropriate based on
the Program's anticipated daily census, and the services of a registered
dietician and an office Manager. All personnel employed or otherwise contracted
for (including the Office Manager) shall be required to comply with the Program
policies and procedures as mutually developed and agreed upon in writing by
Hospital and Manager.

         2.4  Diagnostic Facilities. Hospital shall make available to Program
patients the Hospital's inpatient, diagnostic, and other facilities as are
available at Hospital and ordered from time to time by such patients' attending
physicians or appropriately requested by Program staff.

         2.5  General Services. Hospital shall provide the following support
services for the efficient and proper operation of the Program.

              2.5.1 Dietary services for patients of the Program (to be served
to each patient at the Facility and the part-time services of the Hospital's
nutritionist/dietician).

              2.5.2 Housekeeping services for the facility.

              2.5.3 Janitorial and physical upkeep of the Facility.

              2.5.4 All utilities for the Facility.

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              2.5.5. Such clerical support, office supplies and general supplies
necessary for the proper operation of the Program.

              2.5.6 Record keeping services, in accordance with state and
federal laws and regulations.

              2.5.7 Transportation as Hospital determines, after consultation
with Manager, is necessary to operate the Program.

         Nothing in this Agreement is intended to or shall be construed to limit
or restrict the Hospital's ability to outsource the provisions of the goods and
services contemplated in this Section.

         2.6 Policies and Procedures. Hospital shall provide all Program staff
(including employees and independent contractors of Manager) with copies of all
relevant Hospital and Program policies and procedures, as amended from time to
time.

         2.7 Health Screening. Hospital shall provide to all Program staff
(including employees and independent contractors of Manager) such appropriate
pre-employment and periodic diagnostic and health screening examinations as are
customarily provided by Hospital for Hospital employees.

         2.8 Accreditation. With the assistance of Manager, Hospital shall
maintain accreditation by the Joint Commission on the Accreditation of
Healthcare Organizations, and shall be financially responsible for paying all
such fees related to such accreditation. Notwithstanding any other provisions in
this Agreement, the sole remedy for Hospital's sole breach of this Section 2.8
is the right of termination of this Agreement by Manager pursuant to Section
5.2.3.

         2.9 Performance Improvement Review. With the assistance of Manager and
the staff provided by Manager pursuant to Section 1.2 hereof, Hospital shall
oversee the utilization review and performance improvement services with respect
to services provided by the Program.

         2.10 Insurance. Hospital shall maintain professional and public
liability insurance coverage for the Program under the same terms and conditions
and for the same coverage limits as for other Hospital programs. Said insurance
shall cover claims for negligence of Hospital or its employees. Written
certificate of such coverage shall be provided to Manager. Hospital shall have
the right to provide the foregoing coverage through the self-insurance programs
of its parent, sister, or related entities.

         2.11 Y2K. Hospital shall use its best efforts to identify and take such
actions as are necessary in order for all systems and equipment which are
essential for the Program to be Y2K compliant prior to January 1, 2000.

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                                  ARTICLE III.
                    REPRESENTATIONS AND WARRANTIES BY MANAGER

         3.1  Representations by Manager.

              3.1.1 Corporate Status. Manager is a corporation duly organized
and existing under the laws of the State of Delaware, is authorized and
qualified to conduct business in the State of California, and has the power and
authority to carry on the activities in which it is engaged and to perform its
obligations hereunder.

              3.1.2 Execution of Agreement. The execution of this Agreement and
the performance of the obligations of the Manager hereunder will not result in
any breach of any of the terms, conditions, or provisions of any agreement or
other instrument to which Manager is a party or by which it may be bound or
affected, or any governmental license, franchise, permit or other authorization
possessed by the Manager, nor will such execution and performance violate any
federal, state or local law, rule or regulation.

              3.1.3 Litigation. There is no litigation, administrative
proceeding or investigation pending or threatened against Manager, nor is the
Manager subject to any judgment, order, decree or regulation of any court or
other governmental or administrative agency, which would materially adversely
affect the performance of Manager's obligations hereunder.

         3.2  Representations and Warranties by Hospital.

              3.2.1 Corporate Status. Hospital is a non-profit public benefit
corporation duly organized and validly existing in good standing under the laws
of the State of California with the power and authority to perform its
obligations hereunder subject to licensure by the California Department of
Health Services.

              3.2.2 Execution of Agreement. To Hospital's knowledge, the
execution of this Agreement will not be in violation of any governmental
license, permit or other authorization possessed by Hospital. Hospital is
accredited by the Joint Commission on the Accreditation of Healthcare
Organizations.

              3.2.3 Litigation. To Hospital's knowledge, there is no litigation,
administrative proceeding or investigation pending or threatened against
Hospital, nor is the Hospital subject to any judgment, order, decree or
regulation of any court or other government or administrative agency which would
materially adversely affect the performance of Hospital's obligations hereunder.

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                                   ARTICLE IV.
                     BILLING AND COLLECTIONS; MANAGEMENT FEE

         4.1. Facility Services Billing and Collections. Hospital has in effect
a schedule of fees and patient charges for the administrative and technical
component of all services rendered by the Program. Said fees and charge may be
modified by Hospital from time to time in its sole and absolute discretion, but
Hospital shall give prior notice of such modification to Manager for
informational purposes. Hospital shall have the sole and exclusive right to bill
and collect for Hospital's fees and charges with reference to services provided
by the Program in accordance with such schedule. Hospital shall be responsible
for preparing and submitting its annual cost report. The parties agree, if
necessary and appropriate, to alter their billing arrangements in order to avoid
reimbursement disallowance for Hospital pursuant to the Tax Equity and Fiscal
Responsibility Act of 1982 or 42 C.F.R., Part 405, as it may be revised from
time-to-time.

         4.2  Professional Services Billing and Prohibition on Billing.

              4.2.1 Physicians and Clinical Psychologists. Physicians and
clinical psychologists who provide services at the Program are responsible for
billing and collecting for their own professional services.

              4.2.2 LCSWs and MFCCs. Hospital and Manager shall bill and collect
for their respectively employed licensed or directly contracted social workers
("LCSWs"); manager, family and child counselors ("MFCCs"); and other licensed
therapists unless such LCSWs, MFCCs, and other licensed therapists agree to be
responsible for billing and collecting for their professional services.

              4.2.3 Prohibition on Billing. Manager shall not and shall cause
the Medical Director and any other physicians or psychologists associated,
employed by or under contract with Manager not to bill or cause to be billed,
the Medicare Program, any Medicare beneficiary, a Medicare (Part B) carrier or
any other third party payor or patient for any portion of the administrative,
supervisory or other provider services in violation of 42 CFR, Section 405.550.
Manager shall indemnify and hold harmless Hospital from any breach of this
Section 4.2.

         4.3  Management Fee.

              4.3.2 Invoice for Management Fee. The parties have negotiated at
arms-length negotiations the compensation to Manager to be a fair market value
amount for Manager's services and not to be determined in a manner that takes
into consideration the volume or value of any referrals or business generated to
or within Hospital. Hospital shall pay to Manager an annual management fee of
Two Million Four Hundred Twenty Three Thousand, Four Hundred Sixty One Dollars
($2,423,461), payable in equal monthly installments of Two Hundred One Thousand
Nine Hundred Fifty Five Dollars and Eight Cents ($201,955.08) ("Management
Fee").

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              4.3.3 Timing of Management Fee Payment. Manager shall prepare and
submit to Hospital on a monthly fee basis an invoice for its services rendered
hereunder. Said invoice shall include information as to the amount of time and
services provided by Manager. Manager shall submit with the invoice the monthly
report required under Section 1.9. Claims will be settled within 30 days of
receipt of invoice.

         4.4  Adjustments to Management Fee.

              4.4.1 Management Fee Offset. In the event any of the Program staff
to be provided by Manager are not provided in accordance with this Agreement for
a period of more than forty-five (45) days, Hospital may deduct from Manager's
Management Fee an amount equal to the budgeted compensation for such position,
including Employee Benefits. This right to deduct shall not excuse Manager from
its obligation to provide staffing at the level set forth in Section 1.2.

              4.4.2 Payments Declined. Within thirty (30) days of written notice
from Hospital, Manager shall reimburse Hospital twenty percent (20%) of
Hospital's charges for all patient days in excess of 8% during the term of this
Agreement for which payment was denied for clinical reasons or as a result of
inappropriate or inadequate documentation. Hospital may offset, among other
rights, such amount against any monies owed to Manager under this Agreement or
any other agreement. A "patient day" shall be deemed to exist with respect to
each patient in the Program at 12:01 a.m. Manager may request, and Hospital may
authorize, that Manager appeal such denial of payment with the costs of such
appeal being borne by the parties equally.

                                   ARTICLE V.
                              TERM AND TERMINATION

         5.1  Term. This Agreement commences effective 12:01 a.m., January 1,
2000, and expires 12:59 p.m., December 31, 2002, unless earlier terminated in
accordance with the provisions of this Agreement.

         5.2  Termination by Manager.

              5.2.1 Manager may terminate this Agreement upon ninety (90) days
prior to written notice to Hospital, if Hospital should have a bankruptcy,
reorganization, or similar action filed by or against it, or become insolvent,
or sell all or substantially all of its assets (but subject to the assignment
rights set forth in this Agreement).

              5.2.2 In the event Hospital fails to comply with the terms of this
Agreement in any material respect, Manager may notify Hospital of such breach,
in writing, and Hospital shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Hospital shall have sixty (60) days to cure such breach. In the event
Hospital fails to cure such breach within said period, the Agreement may be
terminated by Manger upon ninety (90) days prior to written notice to Hospital.

                                       12

<PAGE>   13

              5.2.3 Manager may terminate this Agreement upon ninety (90) days
prior written notice to Hospital in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Health Care
Organizations, or in the event Hospital fails to maintain any license or
certification granted to it by a regulatory agency without which the Program
would be materially and adversely affected, unless the responsibility to assist
in the maintenance of such license or certification is a responsibility of
Manager pursuant to Section 1.3.

              5.2.4 Manager may terminate this Agreement upon ten (10) days
prior written notice to Hospital in the event Hospital fails to maintain
insurance in accordance with the requirements of Section 2.10.

         5.3  Termination by Hospital.

              5.3.1 Hospital may terminate this Agreement upon ninety (90) days
prior written notice to Manager, if Manager fails to pay its obligations in a
timely manner under any agreement, should have a bankruptcy, reorganization, or
similar action filed by or against it, or become insolvent, or sell all or
substantially all of its assets.

              5.3.2 In the event Manager fails to comply with the terms of this
Agreement in any material respect, Hospital may notify Manager of such breach,
in writing, and Manager shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Manager shall have sixty (60) days to cure such breach. In the event
Manager fails to cure such breach within said period, the Agreement may be
terminated by Hospital upon ninety (90) days prior written notice.

              5.3.3 Hospital may terminate this Agreement upon thirty (30) days
prior written notice to Manager in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Healthcare
Organizations, in the event Hospital fails to maintain any license, permit,
certification and/or other required authorizations to operate the Program or the
Facility, or if Hospital loses or surrenders its participation in the Medicare
and/or Medi-Cal programs.

              5.3.4 Hospital may terminate this Agreement upon ten (10) days
prior written notice to Manager in the event Manager fails to maintain insurance
in accordance with the requirements of Section 1.6.

              5.3.5 Hospital may terminate this Agreement if (a) Manager, or any
of its principals, officers, Managers or directors ("Management Personnel") is
convicted of an offense related to healthcare or listed by a Federal agency as
being disbarred, excluded or otherwise ineligible for Federal program
participation, or (b) any of the staff Manager employs or contracts with, other
than Management Personnel, are convicted of an offense related to healthcare or
listed by a Federal agency as being disbarred, excluded or otherwise ineligible
for Federal program participation and Manager does not immediately remove such
non-Management Personnel from providing services hereunder.

                                       13

<PAGE>   14

              5.3.6 We agree to develop within the next 60 days a mutually
acceptable addendum to the contract which addresses the question of establishing
reasonable management accountability for bottom line performance.

         5.4  Immediate Threat to Patient Care. Notwithstanding any other term
of this Agreement, in the event a party ever fails to meet a condition of this
Agreement which breach poses a threat to patient care, the operation, licensure
or reimbursement of the Hospital or the Program, the party not in breach may
require the other immediately to take such remedial steps as are necessary to
alleviate said threat to patient care or operations. If said threat is not
immediately remedied, the other party shall have the right to immediately
terminate this Agreement or take such remedial steps as such other party deems
necessary to cure the threat.

         5.5  Renegotiation/Termination.

              5.5.1 Tax Exempt Financing. In the event Hospital seeks additional
or replacement tax exempt financing, Manager agrees to amend this Agreement as
may be necessary in order for Hospital to obtain or maintain such financing, or
to secure the legal opinions which may be required to secure or maintain such
financing. Immediately upon request by Hospital, Manager shall execute any and
all such amendments presented by Hospital and shall return promptly said fully
executed original amendments to Hospital. If Manager fails to comply with this
provision, Hospital may terminate this Agreement upon ten (10) days written
notice to Manager.

              5.5.2 Changes in Reimbursement. Acknowledging that a substantial
portion of the Program's services will be reimbursed under the Medicare and
Medi-Cal programs and that a substantial portion of the Hospital's services are
reimbursed under the Medicare and Medi-Cal programs, the parties agree that this
Agreement is terminable by either party effective upon any changes in the
Medicare or Medi-Cal laws, regulations and/or payment programs which
substantially and adversely affect either party, including but not limited to
changes in Hospital's reimbursement for Program services; provided, however, the
parties agree to negotiate diligently and in good faith to revise this Agreement
to eliminate the substantial and adverse effect caused by such change(s).

              5.5.3 Hospital's Licensure and Status. It is understood and agreed
that Hospital is a licensed general acute care facility which is owned by a
nonprofit corporation which has tax-exempt financing and participates in the
Medicare and Medi-Cal programs. Hospital is bound by the federal and state laws,
regulations and interpretations thereof pertaining to the foregoing. The parties
agree that this Agreement shall be interpreted from time-to-time as they may
affect Hospital, its licensure, nonprofit status, tax exempt financing and
participation in and reimbursement by the Medicare and Medi-Cal programs. In the
event this Agreement or one or more of its terms or provisions is interrupted
from time-to-time as they may affect Hospital, its licensure, nonprofit status,
tax exempt financing and participation in and reimbursement of the Medicare and
Medi-Cal programs. In the event this Agreement or one or more of its terms or
provisions is interpreted by Hospital's counsel to pose a risk of violation of
any of the foregoing laws, regulations or interpretations thereof, Hospital's
bond covenants, the conditions or

                                       14

<PAGE>   15

restrictions pertinent to providers who participate in the Medicare and Medi-Cal
programs, to potentially subject Hospital to monetary sanctions or penalties, or
to adversely affect Hospital's right to bill and collect for services, the
parties agree (i) to continue to perform their respective obligations hereunder
except for the offending provisions; and (ii) to negotiate diligently and in
good faith to reach an agreement without the offending provisions within ten
(10) days after notice that the Agreement requires renegotiation pursuant to
this Section 5.5.3, then this Agreement shall terminate immediately upon notice
served by either party in accordance with Section 8.10 hereof.

         5.6  Effects of Termination. Upon termination of this Agreement each
party shall continue to be bound by (a) all covenants and restrictions that by
their nature or terms continue to be binding (for example, but without
limitation, access to books and records, confidentiality indemnification), and
(b) all amounts payable as compensation or offset for services rendered during
the term of this Agreement. The parties agree that policies and procedures
prepared by Manager and adopted by Hospital may be used by Hospital after the
termination of this Agreement in its sole discretion.

                                   ARTICLE VI.
                            CONFIDENTIAL INFORMATION
                      NON-COMPETITION AND NON-SOLICITATION

         6.1  Confidential Information Acknowledgment. Each party acknowledges
and agrees that Confidential Information may be disclosed to it in confidence by
the other party with the understanding that it constitutes business information
developed by the other party. Each party further agrees that it shall not use
such Confidential Information for any purpose other than in connection with the
Program. Each party further agrees not to disclose such Confidential Information
to any third party except as required by law or regulation or in order to serve
the purpose of the Program or as permitted by written authorization of the other
party. "Confidential Information" shall mean all confidential information and
trade secrets of each party, including without limitation, financial statements,
internal memoranda, reports, patient lists, memoranda, manuals, handbooks,
pamphlets, production books and audio and visual recordings, models, techniques,
formulations, procedures, business plans, and other materials or records of a
confidential and/or proprietary nature not known or available to the public or
within the industry and which are shared by a party with the other party in the
course and scope of performing its obligations hereunder. For purposes of this
Agreement, policies and procedures and other materials developed by Manager for
Hospital are not Confidential Information of Manager.

         6.2  License. Manager hereby grants to Hospital for the term of this
Agreement, a non-exclusive license to use the registered service marks of
Manager when identifying the Program. These service marks are to remain the
exclusive property of Manager.

         6.3. Use of Name or Likeness. Neither party shall have the right to use
the other party's name or likeness in any advertising, directories, brochures or
announcements without the other party's approval of the specific usage. If the
parties agree to develop any forms of advertising for the Program, all costs
shall be borne equally by the parties.

                                       15

<PAGE>   16

         6.4  Patient Information. Manager covenants, represents and warrants
that neither Manager not its staff shall disclose to any third party, except
where permitted or authorized by applicable law or expressly approved in writing
by Hospital, any patient or medical record information, and that Manager and its
staff are knowledgeable regarding and will comply with the Federal and State
laws regarding the confidentiality of such information.

         6.5  Covenant Not to Compete. During the term of this Agreement,
Hospital is willing to permit Manager access to Hospital's Confidential
Information if Manager agrees during the term of this Agreement to avoid
conflicts of interest by entering into this covenant not to compete. During the
term of this Agreement, neither Manager nor any of its shareholders, officers or
directors, or any entity controlled by or under control with or subject to
common management with one of the foregoing, shall directly or indirectly
perform or arrange to perform in any capacity the type of services called for
hereunder by Manager for any psychiatric program, nor shall the foregoing have
any ownership interest in any entity or sole proprietorship which has a
psychiatric program. This covenant not to compete shall be effective within a
ten (10) mile radius of Facility. If Hospital relocates the Program, the
covenant not to compete shall be effective within a ten (10) mile radius of the
new location; provided, however, if as a result of the relocation, Manager then
has a relationship with a psychiatric program which would violate this covenant
not to compete such pre-existing relationship shall be exempt from this covenant
not to compete. Hospital shall have the right to enforce the foregoing through
legal or equitable action, including but not limited to, injunctive relief, for
such injunctive relief or equitable relief to be available without the necessity
of posting a bond, cash or otherwise. In addition to the foregoing, Hospital
shall have the right at its option to immediately terminate this Agreement and
to seek damages for such breach or to continue this Agreement and to recover
damages for the breach.

         6.6  Non-Solicitation.

              6.6.1 Non-Solicitation Limitations. Manager and Hospital each
acknowledge that the other party has expended and will continue to expend
substantial time, effort, and money to train its respective employees and
contracted personnel in the operation of the Program, and that the other party's
respective employees and contracted personnel have access to and possess
Confidential Information of the other party. Each party therefore agrees that
for the earlier of (i) one (1) year after the cessation of the employment or
agency relationship between the other party and an employee or contracted person
of the other party, or (ii) one (1) year after termination of this Agreement, it
will not knowingly (and it will not induce any of its agents or affiliates to)
solicit the employment of or contract with any employee, former employee, or
contracted personnel or former agent of the other party if such individual has
been employed by or retained by the other party to provide services at Facility
unless the other party gives express written consent thereto.

              6.6.2 Permissible Employment Contracting.

                    (i) This Section prohibits solicitation but not the actual
employment or contracting of an individual if such individual desires such
employment or contract and initiates an application for such employment or
contract.

                                       16

<PAGE>   17

                    (ii) Notwithstanding anything to the contrary, this Section
does not apply to (a) Manager if Manager terminates this Agreement pursuant to
Section 5.2.1, 5.2.2 or 5.2.4 of this Agreement, and (b) Hospital if Hospital
terminates this Agreement pursuant to Section 5.3.1, 5.3.2, 5.3.4, or 5.3.5 of
this Agreement.

                    (iii) Notwithstanding anything to the contrary, a party
shall not be restricted from contracting with the other party's employees or
independent contractors, if such employee or independent contractor had at any
time an employment or other contractual relationship with or was on the Medical
or Allied Health Professional Staff of such party.

                                  ARTICLE VII.
                                 APPLICABLE LAWS

         7.1  Kickback and Anti-Referral Laws. Each party agrees to comply with
applicable federal, state and local laws respecting the Program and the conduct
of their respective businesses and professions, including but not limited to the
federal and California laws governing the referral of patients which are in
effect or will become effective during the term of this Agreement. These laws
include prohibitions on:

              7.1.1 Payment for referral or to induce the referral of patients
(Social Security Act Section 1128; Cal Business and Professions Code Section
325); and

              7.1.2 The referral of patients by a physician for certain
designated health care services to an entity with which a physician (or his/her
immediate family) has a financial relationship (Cal. Labor Code " 139.3 and
139.31, applicable to referrals for workers= compensation services; Cal.
Business and Professions Code "6501.01 and 650.02, applicable to all other
patient referrals within the State; and '1877 of the Social Security Act,
applicable to referrals of Medicare and Medi-Cal patients).

         7.2  Acknowledgments. As consideration for each party hereto to enter
into this Agreement, the parties:

              7.2.1 Acknowledge that (i) each has had the opportunity to engage
independent counsel of her/its choice for advice as to the requirements of the
anti-referral laws referred to in this Section 7; and (ii) each has had the
opportunity to consult with legal counsel or other experts as each deems
appropriate to assist in the determination by each party that the terms of this
Agreement are commercially reasonable;

              7.2.2 Represent to the other that is the intent that the terms of
this Agreement shall be commercially reasonable; and

              7.2.3 Represent to the other that it is the intent that
compensation for each of the services which are provided under this Agreement
and the services of the Medical Director shall be based on the fair market value
of such services.

                                       17

<PAGE>   18

         7.3  No Referral Requirement. Nothing in this Agreement is intended or
shall require any party to violate the California or federal prohibitions on
payments for referrals, and this Agreement shall not be interpreted to:

              7.3.1 Require the Medical Director to make referrals to Hospital,
be in a position to make or influence referrals to Hospital, or otherwise
generate business for Hospital;

              7.3.2 Restrict Medical Director from establishing staff privileges
at, referring any service to, or otherwise generating any business for any other
entity of his/her choosing; and

              7.3.3 Interfere in any way with Medical Director's professional
prerogatives and medical decisions.

         7.4  No Gifts to Beneficiaries. Under no circumstances whatsoever shall
Manager, its employees or agents offer to make any gift or payment to any
individual as a means of encouraging such person to seek medical or psychiatric
attention from Hospital, Manager, or through the Program, or from any other
provider of health care.

         7.5  Audits. Hospitals shall have the right, but not the obligation, to
interview patients who receive services through the Program, and to conduct
audits of all types of the Program, for the purpose of determining whether
Manager is in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, as well as Hospital rules, regulations, bylaws,
policies, and procedures and this Agreement.

                                  ARTICLE VIII.
                            MISCELLANEOUS PROVISIONS

         8.1  Compulsory Arbitration. Any controversy, dispute, or claim arising
out of or relating to this Agreement, or the breach or alleged breach thereof,
shall be settled by binding arbitration in accordance with the rules of the
American Health Lawyers Association Alternative Dispute Resolution Services
Rules of Procedure, and judgment on the award may be entered in any court having
jurisdiction. The provisions of this Section 8.1 shall not apply with respect to
any claim arising out of or relating to bodily injury or death.

         8.2  Attorneys' Fees. If any legal action, including arbitration, is
necessary to enforce the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees and costs awarded against the other party
in addition to any other relief to which the prevailing party may be entitled.

         8.3  Governing Law. The validity of this Agreement and any of it terms
or provisions, the interpretation of the rights and duties of the parties
hereunder, and the construction of the terms or provisions hereof shall be
governed in accordance with the laws of the State of California.

         8.4  Force Majeure. If either of the parties hereto is delayed or
prevented from fulfilling any of its obligations hereunder by force majeure,
said party shall not be liable for said delay or

                                       18

<PAGE>   19

failure. "Force Majeure" shall mean any cause beyond the reasonable control of a
party, including but not limited to, an act of God, act or omission of civil or
military authorities, fire, strike, flood, riot, war, delay of transportation,
or inability due to the aforementioned causes to obtain necessary labor,
materials or facilities.

         8.5  Severability. If any part of this Agreement is held to be void or
unenforceable, such part will be treated as severable, leaving valid the
remainder of this Agreement notwithstanding the part found void or
unenforceable, unless the severed part contains an essential economic term.

         8.6  Waiver. A waiver by either party of a breach or failure to perform
shall not constitute a waiver of any provision hereof or of any other breach or
failure whether or not similar. There shall be no waiver unless in writing
signed by the party against whom the waiver is sought to be enforced.

         8.7  Binding Effect and Assignment. This Agreement shall be binding on
the successors and assigns of the respective parties, provided however that
neither party may assign or otherwise transfer this Agreement or delegate
obligations hereunder without the other's written consent, except as otherwise
provided herein.

         8.8. Complete Agreement. This Agreement constitutes the complete
understanding of the parties hereto with respect to the subject matter hereof,
and no other agreement, representation, statement, or promise relating to the
subject matter of this Agreement which is not contained herein shall be valid or
binding. Any and all prior agreements and understandings, including but not
limited to, the Agreement entered into November 27, 1995, [as extended by mutual
agreement,] are superseded by this Agreement and no further force or effect.
There shall be no amendment hereof unless such amendment is in writing and is
signed by both parties.

         8.9  No Agency or Partnership. The relationship between Manager and
Hospital is that of independent contractors and nothing in the Agreement shall
be deemed to create an agency, joint venture, partnership or similar
relationship between the parties hereto. Neither party shall have the right to
bid for the other or enter into any contract or commitment in the name of, or on
behalf of, the other.

         8.10 Notices. All notices hereunder shall be in writing, delivered
personally or by U.S. Certified or Registered postal mails, postage prepaid,
return receipt requested, and shall be deemed given when delivered personally or
upon the earlier of actual receipt or five (5) days afer deposit in said United
States mail, addressed as below with proper postage affixed, but each party may
change its address by written notice in accordance with this Section.

              If to Hospital:   Mission Community Hospital
                                14850 Roscoe Boulevard
                                Panorama City, California  91402
                                Attn: Chief Executive Officer

                                       19

<PAGE>   20

              If to Manager:    OptimumCare Corporation
                                30011 Ivy Glenn Drive, Suite 219
                                Laguna Niguel, California  92677-5018
                                Attn: Ed Johnson

         8.11  Captions. Any captions to or headings of the articles, sections,
subsections, paragraphs, or subparagraphs of this Agreement are solely for the
convenience of the parties, are not a part of this Agreement and shall not be
used for the interpretation or determination of validity of this Agreement or
any provisions hereof.

         8.12  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall constitute but one and the same instrument.

         8.13  Assistance in Litigation. Manager and Medical Director shall, at
no charge, provide information and testimony and otherwise assist Hospital in
defending against litigation brought against Hospital, its directors, officers,
shareholders, members or employees based upon a claim of negligence, malpractice
or any other cause of action, arising out of this Agreement, except where
Manager and/or Medical Director is a named adverse party.

         8.14  Gender and Number. Whenever the context hereto requires, the
gender of all words shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.

         8.15  Legal Counsel. Each party understands the advisability of seeking
legal counsel and has exercised its own judgment in this regard.

         8.16  Interpretation. No provision of this Agreement shall interpreted
or construed for or against either party because that party's legal
representatives drafted such provision.

         8.17  Facilitation. Each party agrees promptly to perform further acts
and to execute, acknowledge and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement or effect its purposes.

         8.18  Sale or Lease of Hospital and/or the Facility. If Hospital and/or
the Facility is sold or leased, or is the subject of a joint operating agreement
or joint venture, regardless of the identity of the purchaser/lessee or party
which will continue to operate Facility, Hospital will have the right to assign
the Agreement, delegate all rights and duties thereunder to such
purchaser/lessee or successor operator and Hospital shall have no further
responsibilities or liabilities pursuant to the Agreement.

                                       20

<PAGE>   21

         IN WITNESS WHEREOF, the parties hereto have executed his Agreement as
of the day and year first above written.

                                        "HOSPITAL"

                                        SAN FERNANDO COMMUNITY HOSPITAL
                                        d/b/a/ MISSION COMMUNITY HOSPITAL and
                                        SAN FERNANDO COMMUNITY HOSPITAL

                                        By:  /s/ William Daniel
                                        ------------------------------
                                                 William Daniel
                                        Its:     CEO

                                        "MANAGER"

                                        OPTIMUMCARE CORPORATION,
                                        a Delaware corporation

                                        By:  /s/ Edward A. Johnson
                                        ------------------------------
                                                 Edward A. Johnson
                                        Its:     CEO

                                       21

<PAGE>   22

                                                               EXHIBIT 1.2.1 (a)

                               INPATIENT PROGRAM

         The Program Administrator shall be a licensed health professional with
at least three (3) years psychiatric program management experience. Manager
represents to Hospital that, on the basis of training expertise, the Program
Administrator is knowledgeable regarding inpatient psychiatric programs and that
the Program Administrator is qualified to perform and will use his/her best
efforts to perform the following duties:

         1. Have overall day to day responsibility for the Program and be
available to the Program 24-hours per day, seven (7) days per week, fifty-two
(52) weeks per year. When Manager is absent due to illness, vacation or
continuing education, Manager shall provide a substitute Program Administrator
with the knowledge and expertise to fulfil the responsibilities of the Program
Administrator in his/her absence.

         2. Oversees and supervises all of the Hospital's admissions to and
discharges from the Program, assuring a manageable and safe flow of patient
admissions.

         3. Supervises the Treatment Planning System and Clinical Reviews for
utilization review.

         4. Monitors the Program's compliance with Patient Rights, Department of
Health Services.

         5. Prepares, on the Hospital's behalf, initial drafts of responses to
any deficiency statements.

         6. Assists Hospital in maintaining appropriate relationships with
regulatory and accrediting agencies.

         7. Consults with Hospital's Human Resources personnel and nurse
managers regarding the Hospital's hiring of staff for the Program and discipline
of Program staff.

         8. Consults with the Hospital's Human Resources personnel and nurse
managers regarding human resource issues, such as orientation, timely
performance appraisals, recruitment, retention, ongoing motivation, etc.

         9. Recommends, and after approval by Hospital, implements an education
plan which includes, but is not limited to cross training both of Hospital's
campuses and Hospital's Intake Office.

         10. In conjunction with Hospital staff, conducts weekly patient groups
to obtain patient feedback and to problem solve.

                                       22

<PAGE>   23

         11. Assures that a Patient Rights log is maintained per Patient Rights
quarterly reports.

         12. Assures that all mandatory statistics are maintained per Patient
Rights and Department of Health Services.

         13. Supervises Hospital's Performance Evaluation Team ("PET").

         14. Recommends appropriate disciplinary actions for Hospital staff and
Manager personnel who provide services at or for the Program.

         15. Recommends a system to monitor P.E.T. Performance Improvement
("P.I.") in accordance with Hospital's overall P.I. system, and implements the
P.E.T. P.I. system after Hospital's approval of it.

         16. Works with Hospital to develop and maintain appropriate physician
relationships.

         17. Works with Hospital and its Medical Staff to monitor compliance
with applicable policies, procedures, rules and regulations; assists in
counseling regarding compliance with the foregoing as requested by Hospital or
the Medical Staff.

         18. Recommends, and upon Hospital's approval, implements P.I. programs
for the Program consistent with Hospital's P.I. program.

         19. Participates in Hospital's Function Team and PI Council. Upon
Hospital's request, fulfils the responsibilities of the chair of the Patient's
Rights/Organizational Ethics Committee.

         20. Appropriately responds to customer service issues from relatives,
caretakers and other providers on behalf of Hospital and recommends appropriate
Hospital actions in response to such issues.

         21. Works cooperatively with and is available to Hospital's ER
physicians and ER nursing staff (24-hours per day, seven days per week, 52 weeks
per year) with respect to psychiatric referrals.

         22. Performs 5150's in the ER as needed.

         23. If requested by Hospital, attends and represents Hospital at
County, Service Area, and RFP meetings and at Hospital Association of Southern
California Behavioral Healthcare Subcommittee meetings.

         24. Assists Hospital in its interaction, and represents Hospital, if
requested to do so by Hospital, with respect to local community services (fire,
police department) and neighboring agencies, such as other hospitals, community
healthcare centers, clinics, etc.

                                       23

<PAGE>   24

         25. Identifies and recommends to Hospital opportunities for community
outreach and development. If requested by Hospital, participates in identified
community outreach opportunities and assists in the Hospital's strategies for
the Program's development.

         26. At all times strives to maintain and improve Patient Care,
performing such managerial duties as are necessary to monitor and maintain
quality patient care.

         27. Acts as a member of the Hospital's Senior Management structure, as
established and modified from time to time by the CEO.

         28. Reports to the CEO or designee and performs such managerial duties
with respect to the Program and the Hospital as reasonably requested from time
to time by Hospital's Chief Executive Officer or designee.

Manager's Cost of Providing Program Administrator

For purposes of this Agreement, Manager's deemed cost of providing the Nursing
Director shall be as set forth in Exhibit 1.2.2.

                                       24

<PAGE>   25

                                                               EXHIBIT 1.2.1 (b)

         1. Medical Director Qualifications. Manager represents, warrants,
covenants and agrees that:

         (a) At all times during the term of this Agreement, Medical Director
             shall be a physician duly licensed to practice medicine in the
             State of California, shall be a member of the Hospital's Active
             Medical Staff with clinical privileges sufficient to permit Medical
             Director to perform all services reasonably required of him/her as
             Medical Director of the Program, and shall be in legitimate
             possession of all customary narcotics and controlled substances
             narcotics and controlled substances and numbers and licenses;

         (b) Manager shall obtain the Medical Director's written representation
             and warranty that at no time prior to or during the term of this
             Agreement, shall Medical Director's license to practice medicine in
             any state ever have been suspended, revoked, or restricted, ever
             have been reprimanded, sanctioned or disciplined by any licensing
             board or state or local medical society or specialty board, ever
             have been suspended, excluded, barred or sanctioned under the
             Medicare or Medi-Cal programs, or any other governmental agency,
             ever have been denied membership or reappointment of membership on
             the medical staff of any hospital, or ever had his/her medical
             staff membership or clinical privileges suspended, curtailed or
             revoked for a medical disciplinary cause or reason; and

         (c) The terms and conditions of the Medical Director's agreement with
             Manager shall be in compliance with all applicable law, including
             but limited to, state and federal anti-referral legislation such
             that Hospital shall not be limited from billing and receiving
             payment for services rendered. Manager shall indemnify and hold
             Hospital harmless from any damages, costs and expenses Hospital
             incurs as the result of Manager's failure to assure that Manager's
             agreement with the Medical Director is in compliance with the
             foregoing. Hospital shall have the right to review and approve the
             proposed Agreement between the Medical Director and Manager.

         2. Medical Director Duties. The Medical Director shall provide the
professional administrative services as hereafter set forth as an independent
contractor of Manager. The Medical Director shall furnish the following for the
operation of the Program:

         (a) Medical Director shall serve as Medical Director of the Program.
             Medical Director shall, during the entire term of this Agreement,
             supervise the clinical, medical and psychiatric operation of the
             Program and shall devote such time as is necessary to carry out
             such duties and ensure efficient and effective medical
             administration of the Program. The primary objective is to provide
             appropriate utilization of the Program's facilities, equipment and
             staff and to provide quality services to all patients;

         (b) Manager shall assure that Medical Director shall be available at
             reasonable times for consultation with the Board of Directors, the
             Chief Executive Officer or designee, the

                                      25

<PAGE>   26

             Chief of Staff, individual members of the medical staff, committees
             of the professional staff and nursing, be available by electronic
             pager for emergency consultation during all hours that the Program
             is in operation and Medical Director is offsite; provided, however,
             that Medical Director may arrange for coverage of this on-call
             obligation by a substitute who must be approved by the CEO or
             designee, which coverage shall be provided by a physician licensed
             to practice medicine in the State of California with clinical
             privileges at Hospital sufficient to perform services required
             hereunder and shall be at Manager's or Medical Director's sole cost
             and expense;

         (c) Medical Director shall actively participate in the affairs of the
             professional staff of the Hospital and shall perform such tasks and
             provide such services as the professional staff or any committee
             may from time to time appropriately request. Hospital's medical
             staff committees shall conduct at regular intervals ongoing
             monitoring and reviewing of the professional performance of Program
             and the Medical Director; the results of these reviews to be
             reviewed by Hospital's CEO;

         (d) The Medical Director shall recommend to Hospital and its Medical
             Staff proposed treatment programs and protocols for physician care.
             Upon approval of the foregoing, Medical Director shall assist with
             the implementation of said treatment programs and protocols.

         (e) If requested by the CEO, Medical Director shall serve on committees
             and perform duties commensurate with the requirements of the
             Medical Directors who contract directly with Hospital; and

         (f) Medical Director shall perform such duties as may be reasonably
             requested by the CEO from time to time.

         3. Medical Director's Compensation. The Medical Director will be paid
at the rate of One Hundred Dollars ($100) per hours; provided, however, in no
event will the Medical Director be paid in excess of Three Thousand Dollars
($3,000) per month for services rendered hereunder.

                                       26

<PAGE>   27

                                                               EXHIBIT 1.2.1 (c)

                                INPATIENT PROGRAM

The Nursing Director shall be a California licensed registered nurse with at
least three (3) years of psychiatric program management experience. Manager
represents to Hospital that, on the basis of training and expertise, the Nursing
Director is knowledgeable regarding inpatient psychiatric programs and that the
Director of Inpatient Psychiatric Nursing Services is qualified to perform and
will use his/her best efforts to perform the following duties:

         1. Assure clinical staffing for the Program meets acuity levels, both
in numbers and in the expertise of the professional staff.

         2. Assume the responsibilities as the manager of the clinical staff who
provide services in the Program, including but not limited to day to day direct
oversight of clinical services provided to Program patients.

         3. Integrate Program objectives and resources in the provision of
patient care services.

         4. Ensure that patients who are admitted to the Program meet all
criteria for admission and are at the appropriate level of care.

         5. Take appropriate measures, consistent with Hospital policies and
procedures which may be in effect from time to time, to encourage growth,
development and education of the Program's patient care services staff.

         6. Conduct monthly meetings to facilitate communication with both
professional and non-professional staff.

         7. Timely inform the Program Administrator and the Hospital's Director
of Patient Care Services of issues that affect patient care.

         8. Establish positive working relationship and promote teamwork between
the Program and other Hospital Departments.

         9. Facilitate the resolution of conflicts which may arise from time to
time, such as conflicts between the individual needs of the staff who, directly
or indirectly, report to the Director of Inpatient Psychiatric Nursing Services
and the needs of the Program and Hospital.

         10. Perform all duties which may be necessary or appropriate from time
to time for a Hospital Department head or as may be assigned from time to time
by the Program Administrator, the Hospital's Director of Patient Care Services,
the Hospital's CEO, or their designees.

                                       27

<PAGE>   28

Manager's Cost of Providing Nursing Director

For purposes of this Agreement, Manager's deemed cost of providing the Nursing
Director shall be as set forth in Exhibit 1.2.2.

                                       28

<PAGE>   29

                                                                   EXHIBIT 1.2.2

Manager shall provide the following personnel in the categories, at the staffing
levels and the costs, including wages, Employee Benefits and overhead, as set
forth below:

For purposes of this Agreement, the total costs for providing each of the
personnel (including wages, Employee Benefits and overhead) will be deemed to be
One Hundred Twenty Five percent (125%) of the weighted average rates stated in
the most recently published Healthcare Association of Southern California
Compensation Survey ("HASC"), or other mutually agreed upon professional
association survey data if the HASC survey no longer is available to the
parties, for the most comparable position included in the HASC survey. Attached
hereto are copies of pages from the HASC survey as most recently published prior
to the effective date of this Agreement. The parties agree that the employee
categories on the attached copies of pages of the HASC survey represent the
positions most comparable to those positions to be provided by Manager hereunder
and that the geographic areas identified for each position represent the most
applicable market which is included in the HASC survey for the applicable
position. Following each of the positions listed below is the page of the most
recent HASC survey applicable to the particular position, the applicable
geographic market, and the weighted hourly rate or weighted salary to be
effective as of the date of this Agreement and which will remain in effect until
superseded by another survey, as described above. The parties have agreed that
the Employee Benefits and overhead for each of the personnel shall be deemed to
be twenty five percent (25 %) of the hourly rate or salary as it may be in
effect from time to time.

Each of the positions listed below as "FT" shall work for the Program on a full
time basis, regardless of the Program census. Each of the positions listed below
as "PD" shall work for the Program on a part time basis, to fluctuate depending
upon the Program census. Although the actual staffing of personnel listed as
"PD" shall vary from week to week depending upon the census, each month such
personnel shall work for the Program a percent of full-time as as set forth
below. For example, an individual who is designated as .2 FTE shall work the
equivalent of twenty percent (20%) of a full-time employee.

FT Program Administrator; N-06; All Southern; weighted annual salary $73,907
FT Nurse Manager; N-10; All Southern; weighted annual salary $65,699
FT Administrative Assistant; C-05; North Western; weighted hourly rate $13.35
FT Assistant to Nursing Manager; C-05; North Western; weighted hourly rate
   $13.35
FT Rehabilitation Therapy Coordinator; P-07; North Western; weighted hourly rate
   $18.56
FT Rehabilitation Therapy Aide; P-07; North Western; weighted hourly rate
   $18.56
FT Recreation Therapist, RT; P-07; North Western; weighted hourly rate
   $18.56
PD Recreation Therapist, RT (.2 FTE); P-07; North Western; weighted hourly rate
   $18.56
PD Recreation Therapy Aide (.2 FTE); P-07; North Western; weighted hourly rate
   $18.56
PD Occupation Therapist, OT (.2 FTE); P-07; North Western; weighted hourly rate
   $18.56
FT Social Services Coordinator, LCSW; P-08; All Hospitals; weighted hourly rate
   $24.68
FT Social Worker, BSW; P-07; P-08; All Hospitals; weighted hourly rate $24.68

                                       29

<PAGE>   30

FT Social Worker, MA; P-08; All Hospitals; weighted hourly rate $24.68
PD Social Worker, LCSW (.2 FTE); P-08; All Hospitals; weighted hourly rate
   $24.68
PD Social Worker, MA, MFCC Intern (.6 FTE); P-08; All Hospitals; weighted hourly
   rate $24.68
PD Social Worker, MSW (0-.1 FTE); P-08; All Hospitals; weighted hourly rate
   $24.68
FT Utilization Review RN; R-03; North Western; weighted hourly rate $24.81
FT Utilization Review RN; R-03; North Western; weighted hourly rate $24.81
FT Utilization Review Administrative Assistant; C-05; North Western; weighted
   hourly rate $13.35
PD Licensed Psychologist (.2 FTE); P-15; All Hospitals; weighted hourly rate
   $29.76

                                       30

<PAGE>   31

                                                                    EXHIBIT 1.13

         Manager in conjunction with its corporate offices, will provide to the
Hospital, as part of the Manager's fixed Management Fee (as such term is defined
in Section 4.3.2 hereof) the following services:

         A. Administrative Services:

            1. Hiring, initial and ongoing training of, the Program
Administrator, Nursing Director, Medical Director, and other Manager personnel.

            2. Assist Hospital's management team in the selection, initial
training and ongoing training of Hospital personnel who work within or provide
services to the Program.

            3. Recommend to Hospital strategies and opportunities for the
Program, including but not limited to, networking, support and education, and
assist the Hospital in implementing such strategies and opportunities, if
requested by Hospital.

            4. Provide resources and published materials for use in the
management of the Program.

            5. Manager's Corporate Clinical Director shall be available to
perform mock surveys and to assist Hospital in: clinical staff training,
customer service training, documentation in-servicing, quality care promotion
and education, support to Hospital's human resources functions, community
liaison efforts, and evaluation of current Program activities. Managaer's
Corporate Clinical Director also shall advise Hospital regarding current trends,
current regulations, and successful strategies and programs.

            6. Manager's Corporate Director of Utilization Review shall be
available to perform mock surveys and assist Hospital in clinical staff
training, quality care promotion and education.

            7. Make available 24-hours a day, 7 days a week, 52 weeks per year
the services of a Corporate Intake Services Department to provide management
services and advice to Hospital's Admitting Department and to provide prompt and
courteous responses to patients, their families and the community.

            8. The provision of a Psychiatric Mobile Response Tem (P.M.R.T.)
which is available 24-hours per days, 7 days per week, 52 weeks per year with
licensed clinical social workers, registered nurses and psychologists who have
extensive experience with behavioral healthcare and the Department of Mental
Health and Patients Rights who shall be promptly available to advise the Program
and its personnel with respect to issues that might arise requiring P.M.R.T.
expertise.

                                       31

<PAGE>   32

            9. Advise Hospital regarding the establishment of community liaison
activities to promote the community's awareness of the Hospital and the Program,
including but not limited to systems for making follow-up visits to assure
patient satisfaction, to provide education to the community, and to enhance the
services Hospital provides to patients and the community. If requested by
Hospital, Manager shall act on behalf of Hospital in implementing community
liaison activities which have been approved by Hospital.

         B. Clinical Services:

            10. Manager's Corporate Clinical Director, Chief Executive Officer
and Chief Operating Officer shall consult with Hospital regarding the selection,
training and ongoing education of Hospital's clinical staff and Manager's staff
who provide services at or to the Program.

            11. Manager's Corporate Clinical Director and Corporate Director of
Utilization Review, who each shall be licensed registered nurses, shall be
available to assist the Hospital with respect to clinical issues, including but
not limited to education, documentation, patient care and regulatory
requirements.

            12. Manager's Corporate Clinical Staff shall provide guidance to the
Medical Director, including but not limited to treatment planning.

            13. Ongoing review and advice to Hospital regarding Hospital's
admission criteria for Medi-Cal and Medicare to assure Hospital's admissions to
the Program are appropriate.

            14. Provide training to Hospital's clinical staff and perform daily
chart reviews to assure that the clinical staff appropriately documents in
accordance with Hospital's criteria, appropriately documents treatment and
planning, and complies with regulatory standards for documentation, as the
foregoing may exist from time to time.

            15. Take timely action to appropriately implement discharge criteria
for the Program which have been approved by Hospital.

            16. Assure that the clinical staff have prepared appropriate
documentation of discharge criteria.

            17. Recommend to Hospital, and undertake on behalf of Hospital if
requested, appropriate post-discharge follow-up communications with families and
board and care facilities to maintain and enhance the patient's quality of life.

                                       32

<PAGE>   33

            18. Support Hospital's and its Medical Staff's ongoing education by
providing education on clinical topics such as medication, cognitive therapy,
care planning, treatment planning, confidentiality, patient rights, etc., and
education on such topics as how to deal with and appropriately handle
psychiatric patients, mental health laws, psychiatric patients with chronic
medical illnesses, etc.

         C. Utilization Review:

            19. Recommend appropriate utilization review process policies,
procedures and criteria to the Hospital. Upon approval, then to implement these
processes so as to assure the timely and efficient management of the processing
of all TAR obligations as per the Medi-Cal TAR Unit requirements, as they may
exist from time to time. To assure that these processes are promptly modified
from time to time as may be required in order to remain n compliance with the
applicable requirements as they may exist from time to time.

            20. Recommend protocols and procedures to the Hospital, and
following Hospital's approval of these protocols and procedures, assist with
their implementation. The foregoing shall include, but not be limited to,
protocols and procedures which assure that all charts are copied within ten (10)
working days of discharge and that copies of charts are sent to the TAR Unit
along with the required LA County codes; the foregoing protocols, procedures and
time frames to be promptly modified from time to time to comply with applicable
requirements as they may exist from time to time.

            21. In addition to the reviews conducted by Hospital and its Medical
Staff, Manager shall review each day all charts to assure appropriateness of
admissions, continued stay criteria and documentation of care.

            22. Advise and assist Hospital's UR Staff to assure that all denials
are timely and properly appealed by the Hospital on the first level, and if
necessary, on the second level.

            23. Support Hospital's and the Medical Staff's ongoing education,
including but not limited to providing in-services to clinical staff and
physicians regarding criteria and County charting requirements.

            24. Recommend systems to the Hospital, and following the Hospital's
approval, monitor those systems to assure that Hospital's UR Staff enters all
Medi-Cal patients into the county's MIS system within 24-hours of admission and
discharge, five (5) days a week (Monday through Friday); the foregoing
mechanisms and time frames to be promptly modified from time to time to remain
in compliance with applicable requirements as they may exist from time to time.

            25. Maintain current knowledge regarding regulatory changes to
timely recommend revisions to Hospital pre-admissions screening tools consistent
with regulatory changes.

                                       33

<PAGE>   34

            26. Recommend P.I. audits for the Program which are consistent with
the P.I. program at Hospital. Following Hospital's approval of proposed Program
P.I. audits, to actively participate in the implementation and monitoring of the
approved P.I. Program audit.

            27. Participate in treatment planning as part of the Treatment
Planning Team.

            28. All individuals provided by Manager to assist with review of
Program patient's utilization shall report to the Hospital's Director of
Utilization Review, or the manager designated by Hospital from time-to-time to
fulfill the duties of a director of utilization review.

         D. Educational Services:

            29. Maintain continuing education provider numbers from the Board of
Registered Nursing and the Board of Behavioral Sciences to enable healthcare
providers to obtain continuing education credits for continuing education
provided by Manager.

            30. Recommend to Hospital, and upon Hospital's request, provide
training and education to Hospital's management, including but not limited to
education and training regarding teamwork, management of difficult employees,
motivation, etc.

            31. Recommend, and upon Hospital's request, provide ongoing clinical
education, including but not limited to ongoing training of Manager's staff and
Hospital staff in proper crisis intervention technique, patient care issues,
etc.

            32. In support of Hospital's and its Medical Staff ongoing
education, provide ongoing Physician in-services and training and ongoing staff
education and training or documentation requirements.

            33. Recommend, and upon Hospital's request, manage the
implementation of a customer service program and education for the Program.

            34. Recommend to Hospital, and upon Hospital's request, provide
regularly scheduled educational offerings related to the Program.

            35. Perform such managerial responsibilities with respect to the
Program as reasonably requested from the CEO or designee from time to time,
including but not limited to performing managerial responsibilities and timely
reporting in accordance with the management structure and standards as required
by Hospital of its managers, as said structure and standards may exist from time
to time.

                                       34

<PAGE>   35

                                                                   EXHIBIT 5.3.6

                                 Direct Expenses

Direct Expenses are expenditures incurred for the operation of a specific
department and/or function. The management function has the ability to control,
influence and/or provide input regarding Direct Costs. For purposes of this
Agreement , Direct Expenses are deemed to include the following which are
incurred for the operation and/or function of the Program:

Salaries and Wages

Employee Benefits

Consulting Fees

Medical Director Fees

Consumable Supplies

Repair and Maintenance

Lease/Rentals

Purchased Services

Depreciation

Dues, Books and Subscriptions

Other Direct Expenses deemed necessary or appropriate for the operation and/or
  function of the Program

                                       35

<PAGE>   36

                    MENTAL HEALTH OUTPATIENT HOSPITALIZATION

                               SERVICES AGREEMENT

         This MENTAL HEALTH OUTPATIENT HOSPITALIZATION SERVICES AGREEMENT
("Agreement") is entered into for reference purposes only as of the __ day of
December, 1999, by and between San Fernando Community Hospital, a California
nonprofit public benefit corporation doing business as Mission Community
Hospital and San Fernando Community Hospital ("Hospital") and OptimumCare
Corporation, a Delaware corporation ("Manager").

                                    RECITALS

A.       Hospital owns and operates a duly license acute care hospital which
         operates at locations in San Fernando and Panorama City, California.

B.       The Panorama City location ("Facility") includes an outpatient partial
         hospitalization program (the "Program") for the treatment of patients
         with psychiatric disorders.

C.       Manager is in the business of providing a variety of consulting,
         administrative and management services to facilities with outpatient
         partial hospitalization programs for the treatment of patients with
         psychiatric disorders.

D.       Manager presently provides various services to the Program at the
         Facility, and Hospital desires to retain Manager, and Manger desires to
         be retained, to provide certain services with respect to the Program.

E.       Hospital and Manager desire to enter into this Agreement to provide a
         clear understanding of their respective rights, duties and obligations
         with respect to the subject matter hereof.

                                    AGREEMENT

                                    ARTICLE 1
                        MANAGER's RIGHTS AND OBLIGATIONS

         1.1 General Intent and Purpose.

             1.1.1 Management Expectations. Manager will manage the Program in
accordance with the mission, vision and values of Hospital, the Hospital's
strategic plan, the Hospital's compliance plan, and the Hospital's annual budget
and operating plan. Manager's management responsibilities shall be fulfilled
within the policies, procedures and organizational structure of the Hospital, as
it may exist from time to time. Manager's Program Administrator and Medical
Director, as such terms are defined in Section 1.2 hereof, shall perform their
responsibilities of management in accordance with the management structure and
standards as required of Hospital employed managers and Hospital contracted
Medical Directors, as such standards and structure may exist from time to time.
Although Hospital shall have the right, in

<PAGE>   37

its sole discretion from time to time, to change its management structure and
standards, as of the commencement of the Agreement and until notice to Manager,
the Program Administrator shall be and function as a hospital department head.
Manager shall assure that all services are managed in accordance with the rules
and regulations that regulate the provision of psychiatric services, including
but not limited to assuring that all issues related to patient movement into and
out of the Program are accomplished within the guidelines established by the Los
Angeles County Department of Mental Health, in accordance with state and federal
law, and in accordance with all Hospital policies. Manager will provide
expertise to Hospital to recommend, and after approval by Hospital, to implement
appropriate Hospital policies, procedures, rules and regulations. It is
anticipated that all personnel provided by Manager will comply with all of the
requirements established for Hospital personnel, including but not limited to,
orientation, safety, health and assuring that any of Manager's personnel who
oversee or direct Hospital employees do so in accordance with Hospital's human
resources policies as they may be established by Hospital from time to time. On
an annual basis, and more often if specified by Hospital, the Chief Executive
Officer of Hospital ("CEO") or his designee shall perform a performance
appraisal of the Manager's Program Administrator and Medical Director, similar
to performance appraisals of individuals with management responsibilities or
directorship agreements at Hospital.

             1.1.2 Administration and Clinical Management. Subject to Hospital's
ultimate retention of control and authority, Manager shall assist Hospital in
the administration and clinical management of the Program and report to Hospital
daily as to the administration of the Program and the care and treatment of
Program patients while at the Facility in accordance with and subject to the
patient's physician's orders. Manager does not provide psychiatric care
(including diagnosis, development of individual treatment plans, determining
changes in the care place and discharge planning), which care is provided by
licensed physicians who are members in good standing of Hospital's Medical Staff
with appropriate privileges.

         1.2 Manager's Provision of Staffing.

             1.2.1 Program Administrator and Medical Director, Staffing. Manager
shall employ and/or independently contract with, and shall be financially
responsible for staffing the Program with;

                   (a) one full-time Program Administrator ("Program
Administrator") who shall work full-time exclusively at Facility and who shall
meet the criteria and fulfil the duties set forth in Exhibit 1.2.1.(a). The
parties hereby acknowledge and agree that the Manager's total cost of providing
the Program Administrator (including wages, Employee Benefits [as defined in
Section 2.5] and overhead) is deemed, for the purposes of this Agreement, and as
the parties= best estimate of fair market value, is the amount set forth in
Exhibit 1.2.1.(a); and

                   (b) one medical director ("Medical Director") who shall
provide not less than Thirty (30) hours of administrative services for the
Program per month and who shall meet the criteria and terms set forth in Exhibit
1.2.1(b). The parties hereby acknowledge and agree that the Medical Director's
compensation is deemed, for the purposes of this Agreement, and as the parties=
best estimate of fair market value, is the amount set forth in Exhibit
1.2.1.(b); and

                                       2

<PAGE>   38

             1.2.2. Additional Personnel Staffing. Manager shall employ and/or
independently contract with and shall be financially responsible for staffing
the Program with professional counseling staff, therapists, case managers and
utilization review managers and staff, in the categories, at the staffing
levels, and at the costs (cumulatively for each category), including wages and
Employee Benefits and overhead, as set forth in Exhibit 1.2.2.

             1.2.3 Need for Staffing. The staffing set forth in Section 1.2
hereof is based upon the anticipated Program needs to operate the Program as
required (i) by applicable State and Federal law and regulation as required for
licensure and accreditation and for certification for participation in and
reimbursement from the Medicare and Medi-Cal programs, (ii) the Program's
reasonable requirements, and (iii) community standards.

             1.2.4 Changes to Staffing Levels. Manager shall not, without
Hospital's prior written consent, which shall not be unreasonably withheld,
deviate from, change, or decrease the agreed staffing levels as set forth in
this Section 1.2.

             1.2.5 Staff Compensation. Manager is solely responsible for
compensating the individuals Manager provides hereunder, including Employee
Benefits, and shall defend and hold Hospital harmless from claims for
compensation or Employee Benefits from such individuals. "Employee Benefits"
shall include, by way of illustration and not limitation, an employer's
contribution under the Federal Insurance Contributions Act, unemployment
compensation and related insurance, payroll and other employment taxes, pension
and retirement plan contributions, workers= compensation and related insurance,
group life, health, disability, and accident insurance, severance, and other
benefits. In entering into or continuing any financial relationship (e.g.,
ownership or compensation arrangements) with any physicians and their immediate
family members (as defined under the Stark law at 42 U.S.C. '1395nn and Cal.
Bus. & Prof. Code " 650.01 et seq.), Manager shall assure that such financial
arrangements meet the requirements of an applicable exception under those laws
such that Hospital is not prohibited from presenting any claims for services
pursuant to such physician self-referral laws.

             1.2.6 Acceptability of Staff Members. Prior to retaining any
individuals to provide services at Facility pursuant to Section 1.2 hereof.
Manager shall obtain the prior written approval of such individual from the CEO.
Manager shall submit such information regarding proposed personnel as the CEO
reasonably requests. Manager shall use reasonable efforts to resolve any issues
regarding the acceptability to Hospital of Program staff employed or otherwise
contracted for by Manager. All professional individuals, including Medical
Director, provided by Manager, shall meet the applicable standards of Hospital's
Medical Staff Bylaws.

             1.2.7 Removal of Staff Member. At the request of Hospital, in its
sole and absolute discretion, Manager shall immediately remove any employee or
independent contractor of Manager from providing services at the Facility or to
the Program.

             1.2.8 Staff Member Conduct and Care. Manager shall cause all
employees and independent contractors of Manager at all times to conduct their
activities in compliance with all

                                       3

<PAGE>   39

bylaws, rules and regulations, policies and procedures of Hospital and its
medical staff and in compliance with all applicable federal, state and local
laws and regulations, and with the standards and requirements established by the
Joint Commission on Accreditation of Healthcare Organizations and other relevant
professional organizations pertinent to the operation of the Program.

         1.3 Licensure and Accreditation. Manager shall advise and assist
Hospital in order for Hospital to obtain all necessary licenses and approvals
from governmental and accrediting agencies, including the Joint Commission on
the Accreditation of Healthcare Organizations, and in order for Hospital to
obtain all certifications and approvals necessary to participate in the Medicare
and Medi-Cal programs. Manager shall advise and assist Hospital to assure
Hospital timely undertakes all activities necessary to obtain and maintain all
necessary licenses and approvals from governmental and accrediting agencies,
including without limitation, the California Department of Health Services, and
is responsible for timely advising and assisting Hospital to undertake all
activities necessary to maintain all certifications and approvals necessary to
participate in the Medi-Cal and Medicare programs are performed. Manager shall
advise and assist Hospital to enable Hospital to timely prepare, file, and
supplement all regulatory applications, reports, and forms required by any
local, state or federal regulatory agency and shall prepare the Facility for,
and monitor, regulatory surveys and inspections of the Program. Manager shall
use its best efforts to assure that Hospital promptly remedies any deficiencies
identified in such surveys and inspections to the extent such deficiencies are
within Manager's control. If the subject matter of the deficiency is Manager's
responsibility hereunder, Manager shall promptly correct such deficiency.
Manager shall use its best efforts to assure that the Program and the Facility
are operated and maintained in compliance with all applicable federal, state,
and local laws, rules and regulations.

         1.4 Policies and Procedures.

             1.4.1 Development and Implementation of Policies and Procedures.
Manager shall develop and recommend, and upon Hospital's approval, assist
Hospital in implementing all policies and procedures necessary for the safe and
efficient operation of the Program, and shall educate Program staff on such
policies and procedures. The foregoing shall include, but not be limited to,
proposed policies and procedures for performance improvement and utilization
review which are consistent with Hospital's policies and procedures for
performance improvement and utilization review in other Hospital programs and
services. Manager shall develop and recommend, and following Hospital approval
implement, clinical treatment programs and protocols for non-physician care that
are reflective of current unrecognized standards for psychiatric programs.
Manager shall provide orientation and training for all Program staff,
irrespective of whether such staff members are employees or independent
contractors of Hospital or Manager. Manager shall assure that all personnel who
provide services at the Facility participate in Hospital's orientation for new
Facility employees. Manager shall as reasonably necessary provide ongoing
in-service training such as to assure that Program staff have the requisite
knowledge and skill required to delivery quality healthcare services at the
Facility and through the Program.

                                       4

<PAGE>   40

             1.4.2 Hospital Approval. The implementation of the policies and
procedures and clinical treatment programs required under Section 1.4 shall be
subject to prior approval by the Hospital's administration and, where
appropriate, the Hospital's medical staff.

             1.4.3 Compliance Plan. Manager shall require that all personnel
provided by Manager to work at Hospital or to provide services on behalf of
Hospital at all times comply with Hospital's Compliance Plan and its components
as they may be in effect from time to time.

         1.5 Indemnification by Manager. Manager shall protect, indemnify, hold
harmless, and defend Hospital, its legal representatives, employees, agents,
officers, trustees, affiliates and assigns, and each of them, from and against
any and all claims, actions, demands, proceedings, losses, damages, costs,
expenses and liabilities (including reasonable attorneys= fees) arising out of
or related to the performance or nonperformance by Manager of any obligations to
be performed or services to be provided hereunder. This indemnification
obligation survives the expiration or earlier termination of this Agreement.

         1.6 Insurance.

             1.6.1 General Liability Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereof, a policy or
policies of comprehensive general liability and malpractice insurance covering
itself and the individuals it provides pursuant to Section 1.2 hereof from an
insurance carrier licensed and authorized to sell or approved to place liability
insurance policies of this nature by the State of California with limits of not
less than Five Million Dollars ($5,000,000) per occurrence. Manager shall cause
to be issued to Hospital, by the insurance carriers issuing such coverage,
certificates of insurance evidencing that the foregoing covenants of this
Agreement have been complied with and stating that said insurance carriers shall
provide not less than ten (10) calendar days prior written notice to Hospital of
any cancellation or material modification of the policy or coverage described
herein, or, if any such carrier shall not agree to provide such notice, then
Manager shall provide notice to Hospital of any such cancellation or
modification immediately upon receipt of notice of the foregoing from the
carrier. Any deductible, co-insurance, or aggregate limits shall be subject to
Hospital's approval, which shall not be unreasonably withheld.

             1.6.2 Workers Compensation Insurance. Manager shall procure and
maintain, at its sole cost and expense, throughout the term hereon, a policy or
policies of workers= compensation insurance covering its employees from an
insurance carrier licensed and authorized to sell or approved to place such
liability insurance policies of this nature by the State of California. Manager
shall add Hospital as an additional insured on such policy.

             1.6.3 Extended Reporting Period. If any liability insurance policy
procured pursuant to Section 1.6 is on a "claims made" rather than "occurrence"
basis, then such policy shall include an option to purchase a "tail" or an
extended reporting period, which option shall be exercisable upon termination or
cancellation of said policy or upon any material modification of said policy
that has the effect of causing the coverage of said policy to fail, in any
respect, to meet the requirements of Section 1.6, regardless of whether such
termination, cancellation or

                                       5

<PAGE>   41

modification shall occur during the term hereof or thereafter. The tail or
extended reporting period shall provide coverage meeting all of the requirements
set forth in Section 1.6, for a period of at least seven (7) years after
termination, cancellation or modification of the underlying policy. Such policy
shall provide that the carrier shall give Hospital or Manger at least thirty
(30) calendar days advance written notice of the date upon which the option may
be exercised regardless of whether such date shall occur during the term hereof
or thereafter and shall specifically provide that Hospital shall be permitted to
exercise the option upon failure of Manager to do so. Upon such notice, Manager
shall take all steps, including but not limited to the payment of money,
necessary to exercise such option, and if Manager shall fail to effectively
exercise such option, then Hospital may do so and Manager shall fully and
immediately reimburse Hospital, within ten (10) calendar days notice thereof by
Hospital, for all monies expended by Hospital in connection therewith. The
provisions of this Section 1.6.3 survive the expiration or earlier termination
of this Agreement.

         1.7 Record keeping and Access to Documents. Manager shall take all
actions required by the Medicare or Medi-Cal programs to generate and maintain
all necessary records as may be required of Hospital by the Medicare or Medi-Cal
programs. Such records are the property of Hospital. In addition, for the
purpose of implementing Section 1861(v)(1)(1) of the Social Security Act, as
amended, and any regulations promulgated pursuant thereto, Manager agrees to
comply with the following statutory requirements governing the maintenance of
documentation to verify the cost of services rendered under this Agreement:

             (i) until the expiration of four years after the furnishing of such
services pursuant to such contract, Manager shall make available, upon written
request to the Secretary of the U.S. Department of Health and Human Services, or
upon request to the Comptroller General, or any of their duly authorized
representatives, the contract and books, documents, and records of such costs,
and

             (ii) if Manager carries out any of the duties of the contract
through a subcontract with a value or cost of Ten Thousand Dollars ($10,000) or
more over a twelve-month period, with a related organization, such subcontract
shall contain a clause to the effect that until the expiration of four years
after the furnishing of such services pursuant to such a subcontract, the
related organization shall make available, upon written request to the
Secretary, or upon request to the Comptroller General, or any of their duly
authorized representatives, the subcontract and books, documents, and records of
such organization that are necessary to verify the nature and extent of such
costs.

         1.8 Audit Disclosure. If Manager is requested to disclose books,
documents, or records for purposes of an audit, Manager shall notify Hospital of
the nature and scope of such request and Manager shall make available, upon
written request of Hospital, all such books, documents, or records, during
regular business hours of Manager. The provisions of Sections 1.7 and 1.8
survive the expiration or earlier termination of this Agreement.

                                       6

<PAGE>   42

         1.9 Reports.

             1.9.1 Monthly Report. Manager shall provide monthly written reports
to Hospital administration which detail the staffing provided each day during
the prior month pursuant to Article I of this Agreement. Such monthly reports
shall accompany Manager's invoice as required pursuant to Section 4.3.3 of this
Agreement. The monthly reports shall include such detail as reasonably requested
by Hospital, the submission of such reports to Hospital to be an express
condition precedent to Hospital obligation to pay to Manager the Management Fee
as required by Section 4 of this Agreement.

             1.9.2 Quarterly Report. Manager shall provide quarterly written
reports to Hospital administration regarding all aspects of the operations of
the Program. Such quarterly reports shall address, among other things, the
therapies provided to patients, any notable therapeutic successes or failures
experienced by patients of the Program, any changes in Program staff, any
complaints received by Manager regarding the operation and administration of the
Program and the Facility, Program census, staffing provided the Program by
Manager, and such other information regarding the staffing, and any other items
or issues significant to the administration of the Program requested by
Hospital.

         1.10 Adverse Actions. Manager shall commit no act or omission which
adversely affects any licensure or certification of the Hospital.

         1.11 Admissions and Professional Services. Patients only shall be
treated by Hospital pursuant to an order by a physician member of Hospital's
medical staff with appropriate privileges. Manager shall assure that medical
treatment shall only be ordered and provided by physicians who are members of
Hospital's medical staff with appropriate clinical privileges. To the extent
that Manager or its personnel makes Section 5150 assessments of individuals and
places holds on such individuals at the Facility, Manager shall comply with all
requirements of Section 5150 and the associated regulations and policies adopted
by the County of Los Angeles.

         1.12 Additional Reports. Manager shall prepare an annual report for the
CEO regarding the Program. The Senior Management of Manager's Corporate Offices
shall meet with the CEO and/or his designee upon the CEO's request, the
foregoing to occur at least on a quarterly basis. Manager shall require that the
Program Administrator provide periodic reports in accordance with the
requirements and expectations of other Hospital managers. Manager shall promptly
provide Hospital with reports and information that Hospital reasonably requests
with respect to the Program, including but not limited to admissions and
discharges.

         1.13 Additional Duties. Manager shall provide the additional duties set
forth in Exhibit 1.13.

                                       7

<PAGE>   43

                                   ARTICLE II.
                        HOSPITAL's RIGHTS AND OBLIGATIONS

         2.1 Ultimate Control. Hospital shall have and maintain throughout the
period hereof ultimate control and authority for the operation of the Program.
Not to limit the foregoing, all admissions to the Program shall be in compliance
with the admissions criteria which is established by Hospital after considering
Manager's recommendations. Hospital has ultimate authority and control regarding
decisions to accept a patient.

         2.2 Space. Hospital shall continue to provide the space currently being
provided for the Program which Manger agrees is adequate in all respects for the
proper operation of the Program. Hospital shall be free to make any changes it
desires to the Facility, or to relocate the Program so long as such changes do
not materially and adversely interfere with the ability of Manager or Hospital
to carry out their duties hereunder.

         2.3 Hospital's Employees. Except for those positions designated to be
provided by Manager, Hospital shall employ, or shall independently contract
with, and shall be financially responsible for staffing the Program with all
personnel necessary for the proper and efficient administration and clinical
operation of the Program, including registered nurses, licensed vocational
nurses and mental health workers, the foregoing in numbers appropriate based on
the Program's anticipated daily census, and the services of a registered
dietician and an office Manager. All personnel employed or otherwise contracted
for (including the Office Manager) shall be required to comply with the Program
policies and procedures as mutually developed and agreed upon in writing by
Hospital and Manager.

         2.4 Diagnostic Facilities. Hospital shall make available to Program
patients the Hospital's inpatient, diagnostic, and other facilities as are
available at Hospital and ordered from time to time by such patients= attending
physicians or appropriately requested by Program staff.

         2.5 General Services. Hospital shall provide the following support
services for the efficient and proper operation of the Program.

             2.5.1 Dietary services for patients of the Program (to be served to
each patient at the Facility and the part-time services of the Hospital's
nutritionist/dietician).

             2.5.2 Housekeeping services for the facility.

             2.5.3 Janitorial and physical upkeep of the Facility.

             2.5.4 All utilities for the Facility.

             2.5.5. Such clerical support, office supplies and general supplies
necessary for the proper operation of the Program.

                                       8

<PAGE>   44

             2.5.6 Record keeping services, in accordance with state and federal
laws and regulations.

             2.5.7 Transportation as Hospital determines, after consultation
with Manager, is necessary to operate the Program.

         Nothing in this Agreement is intended to or shall be construed to limit
or restrict the Hospital's ability to outsource the provisions of the goods and
services contemplated in this Section.

         2.6 Policies and Procedures. Hospital shall provide all Program staff
(including employees and independent contractors of Manager) with copies of all
relevant Hospital and Program policies and procedures, as amended from time to
time.

         2.7 Health Screening. Hospital shall provide to all Program staff
(including employees and independent contractors of Manager) such appropriate
pre-employment and periodic diagnostic and health screening examinations as are
customarily provided by Hospital for Hospital employees.

         2.8 Accreditation. With the assistance of Manager, Hospital shall
maintain accreditation by the Joint Commission on the Accreditation of
Healthcare Organizations, and shall be financially responsible for paying all
such fees related to such accreditation. Notwithstanding any other provisions in
this Agreement, the sole remedy for Hospital's sole breach of this Section 2.8
is the right of termination of this Agreement by Manager pursuant to Section
5.2.3.

         2.9. Performance Improvement Review. With the assistance of Manager and
the staff provide by Manager pursuant to Section 1.2 hereof, Hospital shall
oversee utilization review and performance improvement services with respect to
services provided by the Program.

         2.10 Insurance. Hospital shall maintain professional and public
liability insurance coverage for the Program under the same terms and conditions
and for the same coverage limits as for other Hospital programs. Said insurance
shall cover claims for negligence of Hospital or its employees. Written
certificate of such coverage shall be provided to Manager. Hospital shall have
the right to provide the foregoing coverage through the self-insurance programs
of its parent, sister, or related entities.

         2.11 Y2K. Hospital shall use its best efforts to identify and take such
actions as are necessary in order for all systems and equipment which are
essential for the Program to be Y2K compliant prior to January 1, 2000.

                                       9

<PAGE>   45

                                  ARTICLE III.
                    REPRESENTATIONS AND WARRANTIES BY MANAGER

         3.1 Representations by Manager.

             3.1.1 Corporate Status. Manager is a corporation duly organized and
existing under the laws of the State of Delaware, is authorized and qualified to
conduct business in the State of California, and has the power and authority to
carry on the activities in which it is engaged and to perform its obligations
hereunder.

             3.1.2 Execution of Agreement. The execution of this Agreement and
the performance of the obligations of the Manager hereunder will not result in
any breach of any of the terms, conditions, or provisions of any agreement or
other instrument to which Manager is a party or by which it may be bound or
affected, or any governmental license, franchise, permit or other authorization
possessed by the Manager, nor will such execution and performance violate any
federal, state or local law, rule or regulation.

             3.1.3 Litigation. There is no litigation, administrative proceeding
or investigation pending or threatened against Manager, nor is the Manager
subject to any judgment, order, decree or regulation of any court or other
governmental or administrative agency, which would materially adversely affect
the performance of Manager's obligations hereunder.

         3.2 Representations and Warranties by Hospital.

             3.2.1 Corporate Status. Hospital is a non-profit public benefit
corporation duly organized and validly existing in good standing under the laws
of the State of California with the power and authority to perform its
obligations hereunder subject to licensure by the California Department of
Health Services.

             3.2.2 Execution of Agreement. To Hospital's knowledge, the
execution of this Agreement will not be in violation of any governmental
license, permit or other authorization possessed by Hospital. Hospital is
accredited by the Joint Commission on the Accreditation of Healthcare
Organizations.

             3.2.3 Litigation. To Hospital's knowledge, there is no litigation,
administrative proceeding or investigation pending or threatened against
Hospital, nor is the Hospital subject to any judgment, order, decree or
regulation of any court or other government or administrative agency which would
materially adversely affect the performance of Hospital's obligations hereunder.

                                       10

<PAGE>   46

                                   ARTICLE IV.
                     BILLING AND COLLECTIONS; MANAGEMENT FEE

         4.1. Facility Services Billing and Collections. Hospital has in effect
a schedule of fees and patient charges for the administrative and technical
component of all services rendered by the Program. Said fees and charge may be
modified by Hospital from time to time in its sole and absolute discretion, but
Hospital shall give prior notice of such modification to Manager for
informational purposes. Hospital shall have the sole and exclusive right to bill
and collect for Hospital's fees and charges with reference to services provided
by the Program in accordance with such schedule. Hospital shall be responsible
for preparing and submitting its annual cost report. The parties agree, if
necessary and appropriate, to alter their billing arrangements in order to avoid
reimbursement disallowance for Hospital pursuant to the Tax Equity and Fiscal
Responsibility Act of 1982 or 42 C.F.R., Part 405, as it may be revised from
time-to-time.

         4.2 Professional Services Billing and Prohibition on Billing.

             4.2.1 Physicians and Clinical Psychologists. Physicians and
clinical psychologists who provide services at the Program are responsible for
billing and collecting for their own professional services.

             4.2.2 LCSWs and MFCCs. Hospital and Manager shall bill and collect
for their respectively employed licensed or directly contracted social workers
("LCSWs"); manager, family and child counselors ("MFCCs"); and other licensed
therapists unless such LCSWs, MFCCs, and other licensed therapists agree to be
responsible for billing and collecting for their professional services.

             4.2.3 Prohibition on Billing. Manager shall not and shall cause the
Medical Director and any other physicians or psychologists associated, employed
by or under contract with Manager not to bill or cause to be billed, the
Medicare Program, any Medicare beneficiary, a Medicare (Part B) carrier or any
other third party payor or patient for any portion of the administrative,
supervisory or other provider services in violation of 42 CFR, Section 405.550.
Manager shall indemnify and hold harmless Hospital from any breach of this
Section 4.2.

         4.3 Management Fee.

             4.3.2 Invoice for Management Fee. The parties have negotiated at
arms-length negotiations the compensation to Manager to be a fair market value
amount for Manager's services and not to be determined in a manner that takes
into consideration the volume or value of any referrals or business generated to
or within Hospital. Hospital shall pay to Manager an annual management fee of
Six Hundred Seventy Two Thousand, Two Hundred Sixty Nine Dollars ($672,269),
payable in equal monthly installments of Fifty Six Thousand Twenty Two Dollars
($56,022) ("Management Fee").

             4.3.3 Timing of Management Fee Payment. Manager shall prepare and
submit to Hospital on a monthly fee basis an invoice for its services rendered
hereunder. Said invoice

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<PAGE>   47

shall include information as to the amount of time and services provided by
Manager. Manager shall submit with the invoice the monthly report required under
Section 1.9. Claims will be settled within 30 days of receipt of invoice.

         4.4 Adjustments to Management Fee.

             4.4.1 Management Fee Offset. In the event any of the Program staff
to be provided by Manager are not provided in accordance with this Agreement for
a period of more than forty-five (45) days in a month, Hospital may deduct from
Manager's Management Fee an amount equal to the budgeted compensation for such
position, including Employee Benefits. This right to deduct shall not excuse
Manager from its obligation to provide staffing at the level set forth in
Section 1.2.

             4.4.2 Payments Declined. Within thirty (30) days of written notice
from Hospital, Manager shall reimburse Hospital twenty percent (20%) of all
charges for patient services in excess of 8% during the term of this Agreement
for which payment was denied for clinical reasons or as a result of
inappropriate or inadequate documentation. Hospital may offset, among other
rights, such amount against any monies owed to Manager under this Agreement or
any other agreement. Manager may request, and Hospital may authorize, that
Manager appeal such denial of payment with the costs of such appeal being borne
by the parties equally.

                                   ARTICLE V.
                              TERM AND TERMINATION

         5.1 Term. This Agreement commences effective 12:01 a.m., January 1,
2000, and expires 11:59 p.m., December 31, 2002, unless earlier terminated in
accordance with the provisions of this Agreement.

         5.2 Termination by Manager.

             5.2.1 Manager may terminate this Agreement upon ninety (90) days
prior to written notice to Hospital, if Hospital should have a bankruptcy,
reorganization, or similar action filed by or against it, or become insolvent,
or sell all or substantially all of its assets (but subject to the assignment
rights set forth in this Agreement).

             5.2.2 In the event Hospital fails to comply with the terms of this
Agreement in any material respect, Manager may notify Hospital of such breach,
in writing, and Hospital shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Hospital shall have sixty (60) days to cure such breach. In the event
Hospital fails to cure such breach within said period, the Agreement may be
terminated by Manger upon ninety (90) days prior to written notice to Hospital.

             5.2.3 Manager may terminate this Agreement upon ninety (90) days
prior written notice to Hospital in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Health Care
Organizations, or in the event Hospital fails to maintain any license or
certification granted to it by a regulatory agency without which the Program
would be materially and adversely affected, unless the responsibility to assist
in the maintenance of such license or certification is a responsibility of
Manager pursuant to Section 1.3.

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<PAGE>   48

             5.2.4 Manager may terminate this Agreement upon ten (10) days prior
written notice to Hospital in the event Hospital fails to maintain insurance in
accordance with the requirements of Section 2.10.

         5.3 Termination by Hospital.

             5.3.1 Hospital may terminate this Agreement upon ninety (90) days
prior written notice to Manager, if Manager fails to pay its obligations in a
timely manner under any agreement, should have a bankruptcy, reorganization, or
similar action filed by or against it, or become insolvent, or sell all or
substantially all of its assets.

             5.3.2 In the event Manager fails to comply with the terms of this
Agreement in any material respect, Hospital may notify Manager of such breach,
in writing, and Manager shall have thirty (30) days to cure such breach;
provided that if the breach is for failure to staff the Facility as required
hereunder, Manager shall have sixty (60) days to cure such breach. In the event
Manager fails to cure such breach within said period, the Agreement may be
terminated by Hospital upon ninety (90) days prior written notice.

             5.3.3 Hospital may terminate this Agreement upon thirty (30) days
prior written notice to Manager in the event Hospital fails to maintain
accreditation by the Joint Commission on the Accreditation of Healthcare
Organizations, in the event Hospital fails to maintain any license, permit,
certification and/or other required authorizations to operate the Program or the
Facility, or if Hospital loses or surrenders its participation in the Medicare
and/or Medi-Cal programs.

             5.3.4 Hospital may terminate this Agreement upon ten (10) days
prior written notice to Manager in the event Manager fails to maintain insurance
in accordance with the requirements of Section 1.6.

             5.3.5 Hospital may terminate this Agreement if (a) Manager, or any
of its principals, officers, Managers or directors ("Management Personnel") is
convicted of an offense related to healthcare or listed by a Federal agency as
being disbarred, excluded or otherwise ineligible for Federal program
participation, or (b) any of the staff Manager employs or contracts with, other
than Management Personnel, are convicted of an offense related to healthcare or
listed by a Federal agency as being disbarred, excluded or otherwise ineligible
for Federal program participation and Manager does not immediately remove such
non-Management Personnel from providing services hereunder.

             5.3.6 We agree to develop within the next 60 days a mutually
acceptable addendum to the contract which addresses the question of establishing
reasonable management accountability for bottom line performance.

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<PAGE>   49

         5.4 Immediate Threat to Patient Care. Notwithstanding any other term of
this Agreement, in the event a party ever fails to meet a condition of this
Agreement which breach poses a threat to patient care, the operation, licensure
or reimbursement of the Hospital or the Program, the party not in breach may
require the other immediately to take such remedial steps as are necessary to
alleviate said threat to patient care or operations. If said threat is not
immediately remedied, the other party shall have the right to immediately
terminate this Agreement or take such remedial steps as such other party deems
necessary to cure the threat.

         5.5 Renegotiation/Termination.

             5.5.1 Tax Exempt Financing. In the event Hospital seeks additional
or replacement tax exempt financing, Manager agrees to amend this Agreement as
may be necessary in order for Hospital to obtain or maintain such financing, or
to secure the legal opinions which may be required to secure or maintain such
financing. Immediately upon request by Hospital, Manager shall execute any and
all such amendments presented by Hospital and shall return promptly said fully
executed original amendments to Hospital. If Manager fails to comply with this
provision, Hospital may terminate this Agreement upon ten (10) days written
notice to Manager.

             5.5.2 Changes in Reimbursement. Acknowledging that a substantial
portion of the Program's services will be reimbursed under the Medicare and
Medi-Cal programs and that a substantial portion of the Hospital's services are
reimbursed under the Medicare and Medi-Cal programs, the parties agree that this
Agreement is terminable by either party effective upon any changes in the
Medicare or Medi-Cal laws, regulations and/or payment programs which
substantially and adversely affect either party, including but not limited to
changes in Hospital's reimbursement for Program services; provided, however, the
parties agree to negotiate diligently and in good faith to revise this Agreement
to eliminate the substantial and adverse effect caused by such change(s).

             5.5.3 Hospital's Licensure and Status. It is understood and agreed
that Hospital is a licensed general acute care facility which is owned by a
nonprofit corporation which has tax-exempt financing and participates in the
Medicare and Medi-Cal programs. Hospital is bound by the federal and state laws,
regulations and interpretations thereof pertaining to the foregoing. The parties
agree that this Agreement shall be interpreted from time-to-time as they may
affect Hospital, its licensure, nonprofit status, tax exempt financing and
participation in and reimbursement by the Medicare and Medi-Cal programs. In the
event this Agreement or one or more of its terms or provisions is interrupted
from time-to-time as they may affect Hospital, its licensure, nonprofit status,
tax exempt financing and participation in and reimbursement of the Medicare and
Medi-Cal programs. In the event this Agreement or one or more of its terms or
provisions is interpreted by Hospital's counsel to pose a risk of violation of
any of the foregoing laws, regulations or interpretations thereof, Hospital's
bond covenants, the conditions or restrictions pertinent to providers who
participate in the Medicare and Medi-Cal programs, to potentially subject
Hospital to monetary sanctions or penalties, or to adversely affect Hospital's
right to bill and collect for services, the parties agree (i) to continue to
perform their respective obligations hereunder except for the offending
provisions; and (ii) to negotiate diligently and in

                                       14

<PAGE>   50

good faith to reach an agreement without the offending provisions within ten
(10) days after notice that the Agreement requires renegotiation pursuant to
this Section 5.5.3, then this Agreement shall terminate immediately upon notice
served by either party in accordance with Section 8.10 hereof.

         5.6 Effects of Termination. Upon termination of this Agreement each
party shall continue to be bound by (a) all covenants and restrictions that by
their nature or terms continue to be binding (for example, but without
limitation, access to books and records, confidentiality indemnification), and
(b) all amounts payable as compensation or offset for services rendered during
the term of this Agreement. The parties agree that policies and procedures
prepared by Manager and adopted by Hospital may be used by Hospital after the
termination of this Agreement in its sole discretion.

                                   ARTICLE VI.
                            CONFIDENTIAL INFORMATION
                      NON-COMPETITION AND NON-SOLICITATION

         6.1 Confidential Information Acknowledgment. Each party acknowledges
and agrees that Confidential Information may be disclosed to it in confidence by
the other party with the understanding that it constitutes business information
developed by the other party. Each party further agrees that it shall not use
such Confidential Information for any purpose other than in connection with the
Program. Each party further agrees not to disclose such Confidential Information
to any third party except as required by law or regulation or in order to serve
the purpose of the Program or as permitted by written authorization of the other
party. "Confidential Information" shall mean all confidential information and
trade secrets of each party, including without limitation, financial statements,
internal memoranda, reports, patient lists, memoranda, manuals, handbooks,
pamphlets, production books and audio and visual recordings, models, techniques,
formulations, procedures, business plans, and other materials or records of a
confidential and/or proprietary nature not known or available to the public or
within the industry and which are shared by a party with the other party in the
course and scope of performing its obligations hereunder. For purposes of this
Agreement, policies and procedures and other materials developed by Manager for
Hospital are not Confidential Information of Manager.

         6.2 License. Manager hereby grants to Hospital for the term of this
Agreement, a non-exclusive license to use the registered service marks of
Manager when identifying the Program. These service marks are to remain the
exclusive property of Manager.

         6.3. Use of Name or Likeness. Neither party shall have the right to use
the other party's name or likeness in any advertising, directories, brochures or
announcements without the other party's approval of the specific usage. If the
parties agree to develop any forms of advertising for the Program, all costs
shall be borne equally by the parties.

         6.4 Patient Information. Manager covenants, represents and warrants
that neither Manager not its staff shall disclose to any third party, except
where permitted or authorized by applicable law or expressly approved in writing
by Hospital, any patient or medical record

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<PAGE>   51

information, and that Manager and its staff are knowledgeable regarding and will
comply with the Federal and State laws regarding the confidentiality of such
information.

         6.5 Covenant Not to Compete. During the term of this Agreement,
Hospital is willing to permit Manager access to Hospital's Confidential
Information if Manager agrees during the term of this Agreement to avoid
conflicts of interest by entering into this covenant not to compete. During the
term of this Agreement, neither Manager nor any of its shareholders, officers or
directors, or any entity controlled by or under control with or subject to
common management with one of the foregoing, shall directly or indirectly
perform or arrange to perform in any capacity the type of services called for
hereunder by Manager for any psychiatric program, nor shall the foregoing have
any ownership interest in any entity or sole proprietorship which has a
psychiatric program. This covenant not to compete shall be effective within a
ten (10) mile radius of Facility. If Hospital relocates the Program, the
covenant not to compete shall be effective within a ten (10) mile radius of the
new location; provided, however, if as a result of the relocation, Manager then
has a relationship with a psychiatric program which would violate this covenant
not to compete such pre-existing relationship shall be exempt from this covenant
not to compete. Hospital shall have the right to enforce the foregoing through
legal or equitable action, including but not limited to, injunctive relief, for
such injunctive relief or equitable relief to be available without the necessity
of posting a bond, cash or otherwise. In addition to the foregoing, Hospital
shall have the right at its option to immediately terminate this Agreement and
to seek damages for such breach or to continue this Agreement and to recover
damages for the breach.

         6.6 Non-Solicitation.

             6.6.1 Non-Solicitation Limitations. Manager and Hospital each
acknowledge that the other party has expended and will continue to expend
substantial time, effort, and money to train its respective employees and
contracted personnel in the operation of the Program, and that the other party's
respective employees and contracted personnel have access to and possess
Confidential Information of the other party. Each party therefore agrees that
for the earlier of (i) one (1) year after the cessation of the employment or
agency relationship between the other party and an employee or contracted person
of the other party, or (ii) one (1) year after termination of this Agreement, it
will not knowingly (and it will not induce any of its agents or affiliates to)
solicit the employment of or contract with any employee, former employee, or
contracted personnel or former agent of the other party if such individual has
been employed by or retained by the other party to provide services at Facility
unless the other party gives express written consent thereto.

             6.6.2 Permissible Employment Contracting.

                   (i) This Section prohibits solicitation but not the actual
employment or contracting of an individual if such individual desires such
employment or contract and initiates an application for such employment or
contract.

                   (ii) Notwithstanding anything to the contrary, this Section
does not apply to (a) Manager if Manager terminates this Agreement pursuant to
Section 5.2.1, 5.2.2 or 5.2.4 of this Agreement, and (b) Hospital if Hospital
terminates this Agreement pursuant to Section 5.3.1, 5.3.2, 5.3.4, or 5.3.5 of
this Agreement.

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<PAGE>   52

                   (iii) Notwithstanding anything to the contrary, a party shall
not be restricted from contracting with the other party's employees or
independent contractors, if such employee or independent contractor had at any
time an employment or other contractual relationship with or was on the Medical
or Allied Health Professional Staff of such party.

                                  ARTICLE VII.
                                 APPLICABLE LAWS

         7.1 Kickback and Anti-Referral Laws. Each party agrees to comply with
applicable federal, state and local laws respecting the Program and the conduct
of their respective businesses and professions, including but not limited to the
federal and California laws governing the referral of patients which are in
effect or will become effective during the term of this Agreement. These laws
include prohibitions on:

             7.1.1 Payment for referral or to induce the referral of patients
(Social Security Act Section 1128; Cal Business and Professions Code Section
325); and

             7.1.2 The referral of patients by a physician for certain
designated health care services to an entity with which a physician (or his/her
immediate family) has a financial relationship (Cal. Labor Code " 139.3 and
139.31, applicable to referrals for workers= compensation services; Cal.
Business and Professions Code "6501.01 and 650.02, applicable to all other
patient referrals within the State; and '1877 of the Social Security Act,
applicable to referrals of Medicare and Medi-Cal patients).

         7.2 Acknowledgments. As consideration for each party hereto to enter
into this Agreement, the parties:

             7.2.1 Acknowledge that (i) each has had the opportunity to engage
independent counsel of her/its choice for advice as to the requirements of the
anti-referral laws referred to in this Section 7; and (ii) each has had the
opportunity to consult with legal counsel or other experts as each deems
appropriate to assist in the determination by each party that the terms of this
Agreement are commercially reasonable;

             7.2.2 Represent to the other that is the intent that the terms of
this Agreement shall be commercially reasonable; and

             7.2.3 Represent to the other that it is the intent that
compensation for each of the services which are provided under this Agreement
and the services of the Medical Director shall be based on the fair market value
of such services.

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<PAGE>   53

         7.3 No Referral Requirement. Nothing in this Agreement is intended or
shall require any party to violate the California or federal prohibitions on
payments for referrals, and this Agreement shall not be interpreted to:

             7.3.1 Require the Medical Director to make referrals to Hospital,
be in a position to make or influence referrals to Hospital, or otherwise
generate business for Hospital;

             7.3.2 Restrict Medical Director from establishing staff privileges
at, referring any service to, or otherwise generating any business for any other
entity of his/her choosing; and

             7.3.3 Interfere in any way with Medical Director's professional
prerogatives and medical decisions.

         7.4 No Gifts to Beneficiaries. Under no circumstances whatsoever shall
Manager, its employees or agents offer to make any gift or payment to any
individual as a means of encouraging such person to seek medical or psychiatric
attention from Hospital, Manager, or through the Program, or from any other
provider of health care.

         7.5 Audits. Hospitals shall have the right, but not the obligation, to
interview patients who receive services through the Program, and to conduct
audits of all types of the Program, for the purpose of determining whether
Manager is in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, as well as Hospital rules, regulations, bylaws,
policies, and procedures and this Agreement.

                                  ARTICLE VIII.
                            MISCELLANEOUS PROVISIONS

         8.1 Compulsory Arbitration. Any controversy, dispute, or claim arising
out of or relating to this Agreement, or the breach or alleged breach thereof,
shall be settled by binding arbitration in accordance with the rules of the
American Health Lawyers Association Alternative Dispute Resolution Services
Rules of Procedure, and judgment on the award may be entered in any court having
jurisdiction. The provisions of this Section 8.1 shall not apply with respect to
any claim arising out of or relating to bodily injury or death.

         8.2 Attorneys= Fees. If any legal action, including arbitration, is
necessary to enforce the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees and costs awarded against the other party
in addition to any other relief to which the prevailing party may be entitled.

         8.3 Governing Law. The validity of this Agreement and any of it terms
or provisions, the interpretation of the rights and duties of the parties
hereunder, and the construction of the terms or provisions hereof shall be
governed in accordance with the laws of the State of California.

         8.4 Force Majeure. If either of the parties hereto is delayed or
prevented from fulfilling any of its obligations hereunder by force majeure,
said party shall not be liable for said delay or

                                       18

<PAGE>   54

failure. "Force Majeure" shall mean any cause beyond the reasonable control of a
party, including but not limited to, an act of God, act or omission of civil or
military authorities, fire, strike, flood, riot, war, delay of transportation,
or inability due to the aforementioned causes to obtain necessary labor,
materials or facilities.

         8.5 Severability. If any part of this Agreement is held to be void or
unenforceable, such part will be treated as severable, leaving valid the
remainder of this Agreement notwithstanding the part found void or
unenforceable, unless the severed part contains an essential economic term.

         8.6 Waiver. A waiver by either party of a breach or failure to perform
shall not constitute a waiver of any provision hereof or of any other breach or
failure whether or not similar. There shall be no waiver unless in writing
signed by the party against whom the waiver is sought to be enforced.

         8.7 Binding Effect and Assignment. This Agreement shall be binding on
the successors and assigns of the respective parties, provided however that
neither party may assign or otherwise transfer this Agreement or delegate
obligations hereunder without the other's written consent, except as otherwise
provided herein.

         8.8. Complete Agreement. This Agreement constitutes the complete
understanding of the parties hereto with respect to the subject matter hereof,
and no other agreement, representation, statement, or promise relating to the
subject matter of this Agreement which is not contained herein shall be valid or
binding. Any and all prior agreements and understandings, including but not
limited to, the Agreement entered into November 27, 1995, [as extended by mutual
agreement,] are superseded by this Agreement and no further force or effect.
There shall be no amendment hereof unless such amendment is in writing and is
signed by both parties.

         8.9 No Agency or Partnership. The relationship between Manager and
Hospital is that of independent contractors and nothing in the Agreement shall
be deemed to create an agency, joint venture, partnership or similar
relationship between the parties hereto. Neither party shall have the right to
bid for the other or enter into any contract or commitment in the name of, or on
behalf of, the other.

         8.10 Notices. All notices hereunder shall be in writing, delivered
personally or by U.S. Certified or Registered postal mails, postage prepaid,
return receipt requested, and shall be deemed given when delivered personally or
upon the earlier of actual receipt or five (5) days afer deposit in said United
States mail, addressed as below with proper postage affixed, but each party may
change its address by written notice in accordance with this Section.

              If to Hospital:   Mission Community Hospital
                                14850 Roscoe Boulevard
                                Panorama City, California  91402
                                Attn: Chief Executive Officer

              If to Manager:    OptimumCare Corporation
                                30011 Ivy Glenn Drive, Suite 219
                                Laguna Niguel, California  92677-5018
                                Attn: Ed Johnson

                                       19

<PAGE>   55

         8.11 Captions. Any captions to or headings of the articles, sections,
subsections, paragraphs, or subparagraphs of this Agreement are solely for the
convenience of the parties, are not a part of this Agreement and shall not be
used for the interpretation or determination of validity of this Agreement or
any provisions hereof.

         8.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall constitute but one and the same instrument.

         8.13 Assistance in Litigation. Manager and Medical Director shall, at
no charge, provide information and testimony and otherwise assist Hospital in
defending against litigation brought against Hospital, its directors, officers,
shareholders, members or employees based upon a claim of negligence, malpractice
or any other cause of action, arising out of this Agreement, except where
Manager and/or Medical Director is a named adverse party.

         8.14 Gender and Number. Whenever the context hereto requires, the
gender of all words shall include the masculine, feminine and neuter, and the
number of all words shall include the singular and plural.

         8.15 Legal Counsel. Each party understands the advisability of seeking
legal counsel and has exercised its own judgment in this regard.

         8.16. Interpretation. No provision of this Agreement shall interpreted
or construed for or against either party because that party's legal
representatives drafted such provision.

         8.17 Facilitation. Each party agrees promptly to perform further acts
and to execute, acknowledge and deliver any documents which may be reasonably
necessary to carry out the provisions of this Agreement or effect its purposes.

         8.18 Sale or Lease of Hospital and/or the Facility. If Hospital and/or
the Facility is sold or leased, or is the subject of a joint operating agreement
or joint venture, regardless of the identity of the purchaser/lessee or party
which will continue to operate Facility, Hospital will have the right to assign
the Agreement, delegate all rights and duties thereunder to such
purchaser/lessee or successor operator and Hospital shall have no further
responsibilities or liabilities pursuant to the Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       20
<PAGE>   56

         IN WITNESS WHEREOF, the parties hereto have executed his Agreement as
of the day and year first above written.

                                          "HOSPITAL"

                                          SAN FERNANDO COMMUNITY HOSPITAL
                                          d/b/a/ MISSION COMMUNITY HOSPITAL and
                                          SAN FERNANDO COMMUNITY HOSPITAL

                                          By:  /s/ William Daniel
                                          ----------------------------
                                                   William Daniel
                                          Its:     CEO     /30/99

                                          "MANAGER"

                                          OPTIMUMCARE CORPORATION,
                                          a Delaware corporation

                                          By:  /s/  Edward A. Johnson
                                          ----------------------------
                                                    Edward A. Johnson
                                          Its:      CEO

                                       21

<PAGE>   57

                                                               EXHIBIT 1.2.1 (a)

                               OUTPATIENT PROGRAM

         The Program Administrator shall be a licensed health professional with
at least three (3) years psychiatric program management experience. Manager
represents to Hospital that, on the basis of training expertise, the Program
Administrator is knowledgeable regarding Outpatient psychiatric programs and
that the Program Administrator is qualified to perform and will use his/her best
efforts to perform the following duties:

         1. Have overall day to day responsibility for the Program and be
available to the Program 24-hours per day, seven (7) days per week, fifty-two
(52) weeks per year. When Manager is absent due to illness, vacation or
continuing education, Manager shall provide a substitute Program Administrator
with the knowledge and expertise to fulfil the responsibilities of the Program
Administrator in his/her absence.

         2. Oversees and supervises all of the Hospital's admissions to and
discharges from the Program, assuring a manageable and safe flow of patient
admissions.

         3. Supervises the Treatment Planning System and Clinical Reviews for
utilization review.

         4. Monitors the Program's compliance with Patient Rights, Department of
Health Services.

         5. Prepares, on the Hospital's behalf, initial drafts of responses to
any deficiency statements.

         6. Assists Hospital in maintaining appropriate relationships with
regulatory and accrediting agencies.

         7. Consults with Hospital's Human Resources personnel and nurse
managers regarding the Hospital's hiring of staff for the Program and discipline
of Program staff.

         8. Consults with the Hospital's Human Resources personnel and nurse
managers regarding human resource issues, such as orientation, timely
performance appraisals, recruitment, retention, ongoing motivation, etc.

         9. Recommends, and after approval by Hospital, implements an education
plan which includes, but is not limited to cross training both Hospital and
Program staff.

         10. In conjunction with Hospital staff, conducts weekly patient groups
to obtain patient feedback and to problem solve.

                                       22

<PAGE>   58

         11. Recommends appropriate disciplinary actions for Hospital staff and
Manager personnel who provide services at or for the Program.

         12. Recommends a system to monitor Performance Improvement ("P.I.") in
accordance with Hospital's overall P.I. system, and implements the P.E.T. P.I.
system after Hospital's approval of it.

         13. Works with Hospital to develop and maintain appropriate physician
relationships.

         14. Works with Hospital and its Medical Staff to monitor compliance
with applicable policies, procedures, rules and regulations; assists in
counseling regarding compliance with the foregoing as requested by Hospital or
the Medical Staff.

         15. Participates in Hospital's Function Teams.

         16. Appropriately responds to customer service issues from relatives,
caretakers and other providers on behalf of Hospital and recommends appropriate
Hospital actions in response to such issues.

         17. Works cooperatively with and is available to Hospital's ER
physicians and ER nursing staff (24-hours per day, seven days per week, 52 weeks
per year) with respect to psychiatric referrals.

         18. If requested by Hospital, attends and represents Hospital at
County, Service Area, and RFP meetings and at Association of Ambulatory
Behavioral Healthcare Services meetings.

         19. Assists Hospital in its interaction, and represents Hospital, if
requested to do so by Hospital, with respect to local community services (fire,
police department) and neighboring agencies, such as other hospitals, community
healthcare centers, clinics, etc.

         20. Identifies and recommends to Hospital opportunities for community
outreach and development. If requested by Hospital, participates in identified
community outreach opportunities and assists in the Hospital's strategies for
the Program's development.

         21. At all times strives to maintain and improve Patient Care,
performing such managerial duties as are necessary to monitor and maintain
quality patient care.

         22. Acts as a member of the Hospital's Senior Management structure, as
established and modified from time to time by the CEO.

         23. Reports to the CEO or designee and performs such managerial duties
with respect to the Program and the Hospital as reasonably requested from time
to time by Hospital's Chief Executive Officer or designee.

                                       23

<PAGE>   59

Manager's Cost of Providing Program Administrator

For purposes of this Agreement, Manager's deemed cost of providing the Nursing
Director shall be as set forth in Exhibit 1.2.2.

                                       24

<PAGE>   60

                                                               EXHIBIT 1.2.1 (b)

         1. Medical Director Qualifications. Manager represents, warrants,
covenants and agrees that:

         (a) At all times during the term of this Agreement, Medical Director
             shall be a physician duly licensed to practice medicine in the
             State of California, shall be a member of the Hospital's Active
             Medical Staff with clinical privileges sufficient to permit Medical
             Director to perform all services reasonably required of him/her as
             Medical Director of the Program, and shall be in legitimate
             possession of all customary narcotics and controlled substances
             narcotics and controlled substances and numbers and licenses;

         (b) Manager shall obtain the Medical Director's written representation
             and warranty that at no time prior to or during the term of this
             Agreement, shall Medical Director's license to practice medicine in
             any state ever have been suspended, revoked, or restricted, ever
             have been reprimanded, sanctioned or disciplined by any licensing
             board or state or local medical society or specialty board, ever
             have been suspended, excluded, barred or sanctioned under the
             Medicare or Medi-Cal programs, or any other governmental agency,
             ever have been denied membership or reappointment of membership on
             the medical staff of any hospital, or ever had his/her medical
             staff membership or clinical privileges suspended, curtailed or
             revoked for a medical disciplinary cause or reason; and

         (c) The terms and conditions of the Medical Director's agreement with
             Manager shall be in compliance with all applicable law, including
             but limited to, state and federal anti-referral legislation such
             that Hospital shall not be limited from billing and receiving
             payment for services rendered. Manager shall indemnify and hold
             Hospital harmless from any damages, costs and expenses Hospital
             incurs as the result of Manager's failure to assure that Manager's
             agreement with the Medical Director is in compliance with the
             foregoing. Hospital shall have the right to review and approve the
             proposed Agreement between the Medical Director and Manager.

         2. Medical Director Duties. The Medical Director shall provide the
professional administrative services as hereafter set forth as an independent
contractor of Manager. The Medical Director shall furnish the following for the
operation of the Program:

         (a) Medical Director shall serve as Medical Director of the Program.
             Medical Director shall, during the entire term of this Agreement,
             supervise the clinical, medical and psychiatric operation of the
             Program and shall devote such time as is necessary to carry out
             such duties and ensure efficient and effective medical
             administration of the Program. The primary objective is to provide
             appropriate utilization of the Program's facilities, equipment and
             staff and to provide quality services to all patients;

                                       25

<PAGE>   61

         (b) Manager shall assure that Medical Director shall be available at
             reasonable times for consultation with the Board of Directors, the
             Chief Executive Officer or designee, the Chief of Staff, individual
             members of the medical staff, committees of the professional staff
             and nursing, be available by electronic pager for emergency
             consultation during all hours that the Program is in operation and
             Medical Director is offsite; provided, however, that Medical
             Director may arrange for coverage of this on-call obligation by a
             substitute who must be approved by the CEO or designee, which
             coverage shall be provided by a physician licensed to practice
             medicine in the State of California with clinical privileges at
             Hospital sufficient to perform services required hereunder and
             shall be at Manager's or Medical Director's sole cost and expense;

         (c) Medical Director shall actively participate in the affairs of the
             professional staff of the Hospital and shall perform such tasks and
             provide such services as the professional staff or any committee
             may from time to time appropriately request. Hospital's medical
             staff committees shall conduct at regular intervals ongoing
             monitoring and reviewing of the professional performance of Program
             and the Medical Director; the results of these reviews to be
             reviewed by Hospital's CEO;

         (d) The Medical Director shall recommend to Hospital and its Medical
             Staff proposed treatment programs and protocols for physician care.
             Upon approval of the foregoing, Medical Director shall assist with
             the implementation of said treatment programs and protocols.

         (e) If requested by the CEO, Medical Director shall serve on committees
             and perform duties commensurate with the requirements of the
             Medical Directors who contract directly with Hospital; and

         (f) Medical Director shall perform such duties as may be reasonably
             requested by the CEO from time to time.

         3. Medical Director's Compensation.. The Medical Director will be paid
at the rate of One Hundred Dollars ($100) per hours; provided, however, in no
event will the Medical Director be paid in excess of Three Thousand Dollars
($3,000) per month for services rendered hereunder.

                                       26

<PAGE>   62

                                                                   EXHIBIT 1.2.2

Manager shall provide the following personnel in the categories, at the staffing
levels and the costs, including wages, Employee Benefits and overhead, as set
forth below:

For purposes of this Agreement, the total costs for providing each of the
personnel (including wages, Employee Benefits and overhead) will be deemed to be
One Hundred Twenty Five percent (125%) of the weighted average rates stated in
the most recently published Healthcare Association of Southern California
Compensation Survey ("HASC"), or other mutually agreed upon professional
association survey data if the HASC survey no longer is available to the
parties, for the most comparable position included in the HASC survey. Attached
hereto are copies of pages from the HASC survey as most recently published prior
to the effective date of this Agreement. The parties agree that the employee
categories on the attached copies of pages of the HASC survey represent the
positions most comparable to those positions to be provided by Manager hereunder
and that the geographic areas identified for each position represent the most
applicable market which is included in the HASC survey for the applicable
position. Following each of the positions listed below is the page of the most
recent HASC survey applicable to the particular position, the applicable
geographic market, and the weighted hourly rate or weighted salary to be
effective as of the date of this Agreement and which will remain in effect until
superseded by another survey, as described above. The parties have agreed that
the Employee Benefits and overhead for each of the personnel shall be deemed to
be twenty five percent (25 %) of the hourly rate or salary as it may be in
effect from time to time.

Each of the positions listed below as "FT" shall work for the Program on a full
time basis, regardless of the Program census. Each of the positions listed below
as "PD" shall work for the Program on a part time basis, to fluctuate depending
upon the Program census. Although the actual staffing of personnel listed as
"PD" shall vary from week to week depending upon the census, each month such
personnel shall work for the Program a percent of full-time as as set forth
below. For example, an individual who is designated as .2 FTE shall work the
equivalent of twenty percent (20%) of a full-time employee.

FT Program Administrator; N-06; All Southern; weighted annual salary $73,907
FT Administrative Assistant; C-05; North Western; weighted hourly rate $13.35
FT Program Coordinator; P-07; North Western; weighted hourly rate $18.56
FT Activity Therapist, MA, ATR; P-07; North Western; weighted hourly rate
   $18.56
FT Program Therapist, MFT Intern; P-07; North Western; weighted hourly rate
   $18.56
PD Program Therapist, MFT (.6 FTE); P-07; North Western; weighted hourly rate
   $18.56
FT Social Worker, LCSW; P-08; All Hospitals; weighted hourly rate $24.68
PD Social Worker, MSW (.6 FTE); P-08; All Hospitals; weighted hourly rate $24.68
PD Licensed Psychologist (.2 FTE); P-15; All Hospitals; weighted hourly rate
   $29.76

                                       27

<PAGE>   63

                                                                    EXHIBIT 1.13

         Manager in conjunction with its corporate offices, will provide to the
Hospital, as part of the Manager's fixed Management Fee (as such term is defined
in Section 4.3.2 hereof) the following services:

         A. Administrative Services:

            1. Hiring, initial and ongoing training of, the Program
Administrator, Nursing Director, Medical Director, and other Manager personnel.

            2. Assist Hospital's management team in the selection, initial
training and ongoing training of Hospital personnel who work within or provide
services to the Program.

            3. Recommend to Hospital strategies and opportunities for the
Program, including but not limited to, networking, support and education, and
assist the Hospital in implementing such strategies and opportunities, if
requested by Hospital.

            4. Provide resources and published materials for use in the
management of the Program.

            5. Manager's Corporate Clinical Director shall be available to
perform mock surveys and to assist Hospital in: clinical staff training,
customer service training, documentation in-servicing, quality care promotion
and education, support to Hospital's human resources functions, community
liaison efforts, and evaluation of current Program activities. Managaer's
Corporate Clinical Director also shall advise Hospital regarding current trends,
current regulations, and successful strategies and programs.

            6. Manager's Corporate Director of Utilization Review shall be
available to perform mock surveys and assist Hospital in clinical staff
training, quality care promotion and education.

            7. Make available 24-hours a day, 7 days a week, 52 weeks per year
the services of a Corporate Intake Services Department to provide management
services and advice to Hospital's Admitting Department and to provide prompt and
courteous responses to patients, their families and the community.

            8. The provision of a Psychiatric Mobile Response Tem (P.M.R.T.)
which is available 24-hours per days, 7 days per week, 52 weeks per year with
licensed clinical social workers, registered nurses and psychologists who have
extensive experience with behavioral healthcare and the Department of Mental
Health and Patients Rights who shall be promptly available to advise the Program
and its personnel with respect to issues that might arise requiring P.M.R.T.
expertise.

                                       28

<PAGE>   64

            9. Advise Hospital regarding the establishment of community liaison
activities to promote the community's awareness of the Hospital and the Program,
including but not limited to systems for making follow-up visits to assure
patient satisfaction, to provide education to the community, and to enhance the
services Hospital provides to patients and the community. If requested by
Hospital, Manager shall act on behalf of Hospital in implementing community
liaison activities which have been approved by Hospital.

         B. Clinical Services:

            10. Manager's Corporate Clinical Director, Chief Executive Officer
and Chief Operating Officer shall consult with Hospital regarding the selection,
training and ongoing education of Hospital's clinical staff and Manager's staff
who provide services at or to the Program.

            11. Manager's Corporate Clinical Director and Corporate Director of
Utilization Review, who each shall be licensed registered nurses, shall be
available to assist the Hospital with respect to clinical issues, including but
not limited to education, documentation, patient care and regulatory
requirements.

            12. Manager's Corporate Clinical Staff shall provide guidance to the
Medical Director, including but not limited to treatment planning.

            13. Ongoing review and advice to Hospital regarding Hospital's
admission criteria for Medi-Cal and Medicare to assure Hospital's admissions to
the Program are appropriate.

            14. Provide training to Hospital's clinical staff and perform daily
chart reviews to assure that the clinical staff appropriately documents in
accordance with Hospital's criteria, appropriately documents treatment and
planning, and complies with regulatory standards for documentation, as the
foregoing may exist from time to time.

            15. Take timely action to appropriately implement discharge criteria
for the Program which have been approved by Hospital.

            16. Assure that the clinical staff have prepared appropriate
documentation of discharge criteria.

            17. Recommend to Hospital, and undertake on behalf of Hospital if
requested, appropriate post-discharge follow-up communications with families and
board and care facilities to maintain and enhance the patient's quality of life.

            18. Support Hospital's and its Medical Staff's ongoing education by
providing education on clinical topics such as medication, cognitive therapy,
care planning, treatment planning, confidentiality, patient rights, etc., and
education on such topics as how to deal with and appropriately handle
psychiatric patients, mental health laws, psychiatric patients with chronic
medical illnesses, etc.

                                       29

<PAGE>   65

         C. Utilization Review:

            19. Recommend appropriate utilization review process policies,
procedures and criteria to the Hospital. Upon approval, then to implement these
processes so as to assure the timely and efficient management of the processing
of all TAR obligations as per the Medi-Cal TAR Unit requirements, as they may
exist from time to time. To assure that these processes are promptly modified
from time to time as may be required in order to remain n compliance with the
applicable requirements as they may exist from time to time.

            20. Recommend protocols and procedures to the Hospital, and
following Hospital's approval of these protocols and procedures, assist with
their implementation. The foregoing shall include, but not be limited to,
protocols and procedures which assure that all charts are copied within ten (10)
working days of discharge and that copies of charts are sent to the TAR Unit
along with the required LA County codes; the foregoing protocols, procedures and
time frames to be promptly modified from time to time to comply with applicable
requirements as they may exist from time to time.

            21. In addition to the reviews conducted by Hospital and its Medical
Staff, Manager shall review each day all charts to assure appropriateness of
admissions, continued stay criteria and documentation of care.

            22. Advise and assist Hospital's UR Staff to assure that all denials
are timely and properly appealed by the Hospital on the first level, and if
necessary, on the second level.

            23. Support Hospital's and the Medical Staff's ongoing education,
including but not limited to providing in-services to clinical staff and
physicians regarding criteria and County charting requirements.

            24. Recommend systems to the Hospital, and following the Hospital's
approval, monitor those systems to assure that Hospital's UR Staff enters all
Medi-Cal patients into the county's MIS system within 24-hours of admission and
discharge, five (5) days a week (Monday through Friday); the foregoing
mechanisms and time frames to be promptly modified from time to time to remain
in compliance with applicable requirements as they may exist from time to time.

            25. Maintain current knowledge regarding regulatory changes to
timely recommend revisions to Hospital pre-admissions screening tools consistent
with regulatory changes.

            26. Recommend P.I. audits for the Program which are consistent with
the P.I. program at Hospital. Following Hospital's approval of proposed Program
P.I. audits, to actively participate in the implementation and monitoring of the
approved P.I. Program audit.

                                       30

<PAGE>   66

            27. Participate in treatment planning as part of the Treatment
Planning Team.

            28. All individuals provided by Manager to assist with review of
Program patient's utilization shall report to the Hospital's Director of
Utilization Review, or the manager designated by Hospital to fulfill the duties
of a director of utilization review.

         D. Educational Services:

            29. Maintain continuing education provider numbers from the Board of
Registered Nursing and the Board of Behavioral Sciences to enable healthcare
providers to obtain continuing education credits for continuing education
provided by Manager.

            30. Recommend to Hospital, and upon Hospital's request, provide
training and education to Hospital's management, including but not limited to
education and training regarding teamwork, management of difficult employees,
motivation, etc.

            31. Recommend, and upon Hospital's request, provide ongoing clinical
education, including but not limited to ongoing training of Manager's staff and
Hospital staff in proper crisis intervention technique, patient care issues,
etc.

            32. In support of Hospital's and its Medical Staff ongoing
education, provide ongoing Physician in-services and training and ongoing staff
education and training or documentation requirements.

            33. Recommend, and upon Hospital's request, manage the
implementation of a customer service program and education for the Program.

            34. Recommend to Hospital, and upon Hospital's request, provide
regularly scheduled educational offerings related to the Program.

            35. Perform such managerial responsibilities with respect to the
Program as reasonably requested from the CEO or designee from time to time,
including but not limited to performing managerial responsibilities and timely
reporting in accordance with the management structure and standards as required
by Hospital of its managers, as said structure and standards may exist from time
to time.

                                       31

<PAGE>   67

                                                                   EXHIBIT 5.3.6

                                 Direct Expenses

Direct Expenses are expenditures incurred for the operation of a specific
department and/or function. The management function has the ability to control,
influence and/or provide input regarding Direct Costs. For purposes of this
Agreement , Direct Expenses are deemed to include the following which are
incurred for the operation and/or function of the Program:

Salaries and Wages

Employee Benefits

Consulting Fees

Medical Director Fees

Consumable Supplies

Repair and Maintenance

Lease/Rentals

Purchased Services

Depreciation

Dues, Books and Subscriptions

Other Direct Expenses deemed necessary or appropriate for the operation and/or
  function of the Program

                                       32EXHIBIT 10-T
------------

                            RESTRUCTURING AGREEMENT

            THIS RESTRUCTURING AGREEMENT (this "Agreement") is entered into
as of the 27th day of October, 1999, by and among OAK HILL STRATEGIC
PARTNERS, L.P., a Delaware limited partnership ("OHSP"), 237/1290 UPPER
TIER ASSOCIATES, L.P., a Delaware limited partnership ("UTLP"); 237/1290
UPPER TIER GP CORP., a Delaware corporation ("UTLP GP Corp."); 237 GP
CORP., a Delaware corporation ("237 GP Corp."), JMB/NYC OFFICE BUILDING
ASSOCIATES, L.P., an Illinois limited partnership ("JMB/NYC"); PROPERTY
PARTNERS, L.P., a Delaware limited partnership ("Property Partners");
CARLYLE-XIII ASSOCIATES, L.P., a Delaware limited partnership ("Carlyle
XIII"); CARLYLE-XIV ASSOCIATES, L.P., a Delaware limited partnership
("Carlyle XIV"); CARLYLE MANAGERS, INC., a Delaware corporation ("JMB/NYC
Special"); 237 PARK PARTNERS, L.P., a Delaware limited partnership ("237
Park L.P."); 1290 PARTNERS, L.P., a Delaware limited partnership ("1290
L.P."); 1290 GP CORP., a Delaware corporation ("1290 GP Corp."); METROPOLIS
REALTY TRUST, INC., a Maryland Corporation ("Metropolis") and, solely for
the purpose of agreeing to certain obligations set forth in Sections
4.02(b) and (d) hereof, FW STRATEGIC ASSET MANAGEMENT, L.P. ("FW
Strategic"),  a Texas limited partnership (collectively, the "Parties").

            WHEREAS, Metropolis holds a 95% interest as the general partner
of 237/1290 Lower Tier Associates, L.P., a Delaware limited partnership
("LTLP"), which owns (x) a 99% interest as limited partner in 237 Park
L.P., which owns a direct interest in that certain property known as 237
Park Avenue, New York, New York (together with all related personal
property, intangibles, improvements and fixtures, the "237 Property"), and
(y) a 99% interest as a limited partner in 1290 L.P., which owns a direct
interest in that certain property known as 1290 Avenue of the Americas, New
York, New York (together with all related personal property, intangibles,
improvements and fixtures, "1290 Sixth"); and

            WHEREAS, UTLP holds a 5% interest as the limited partner of
LTLP; and

            WHEREAS, it is intended that 237 Park L.P. shall be converted
into a Delaware limited liability company ("237 Park LLC"); and

            WHEREAS, it is intended that following such conversion,
Metropolis and UTLP shall cause LTLP to liquidate, and pursuant to such
liquidation, each of Metropolis and UTLP shall receive an in-kind
distribution of its pro rata portion of LTLP's interests in 237 Park LLC
and 1290 L.P.; and

            WHEREAS, Metropolis and 237 GP Corp, as sellers, and 237 Park
Investors, L.L.C. (an affiliate of OHSP), as buyer, have entered into the
Interest Purchase Agreement (as defined below) pursuant to which 237 Park
Investors, L.L.C. will acquire the respective interests of Metropolis and
237 GP Corp in 237 Park LLC (following the conversion); and

            WHEREAS, UTLP and OHSP desire to enter into a Contribution
Agreement (the "Contribution Agreement") in connection with UTLP's
contribution of its membership interest in 237 Park LLC for Class A
Partnership Units in OHSP (the "UTLP OHSP Units") as more particularly
described herein; and

            WHEREAS, the JMB/NYC Partners (as defined below) and Metropolis
desire to enter into an Amendment and Release Agreement (the "Amendment and
Release Agreement") relating to the Indemnification Agreement (as defined
below) in connection with the transactions contemplated by this Agreement
and the Interest Purchase Agreement.

<PAGE>

            NOW, THEREFORE, in consideration of the mutual terms, covenants
and conditions herein contained, and for other good, valid and binding
consideration (including, without limitation, the terms, covenants and
conditions set forth in the Interest Purchase Agreement), the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

                                   SECTION 1

                                  DEFINITIONS

            When used herein, the following capitalized terms shall have
the following meanings:

             "Agreement" shall have the meaning set forth in the first
paragraph hereof.

            "Amendment and Release Agreement" shall have the meaning set
forth in the recitals hereto.

             "Closing" shall have the meaning set forth in Section 2.02
hereof.

            "Closing Date" shall have the meaning set forth in Section 2.02
hereof.

            "Closing Transactions" shall have the meaning set forth in
Section 2.01 hereof.

            "Code" shall mean the Internal Revenue Code of 1986, as
amended.

            "Confidential Information" shall have the meaning set forth in
Section 4.06(a) hereof.

            "Contribution Agreement" shall have the meaning set forth in
the recitals hereto.

             "Effective Time" shall have the meaning set forth in Section
2.02 hereof.

            "Fair Market Value" shall have the meaning set forth in Section
5.5 of the OHSP Partnership Agreement.

            "FW Strategic" shall have the meaning set forth in the first
paragraph hereof.

            "Indemnifiable Action" shall have the meaning set forth in
Section 7.02(a)(ii) hereof.

            "Indemnification Agreement" shall mean that certain
Indemnification Agreement dated as of October 10, 1996 by and among the
JMB/NYC Partners and Metropolis.

            "Interest Purchase Agreement" shall mean that certain Interest
Purchase Agreement, by and among 237 Park Investors L.L.C., Metropolis
Reality Trust, Inc. and 237 GP Corp., dated as of September 23, 1999, as
the same was modified by letters dated October 6, 1999, October 13, 1999,
October 14, 1999, and October 18, 1999, and by an Amendment No. 4 to
Interest Purchase Agreement dated October 15, 1999, as the same may be
further modified or amended from time to time.

            "JMB/NYC Controlled Entity" shall mean JMB/NYC, its partners
(including, without limitation, any Indemnitor), stockholders, agents or
affiliates.

<PAGE>

            "JMB/NYC" shall have the meaning set forth in the first
paragraph of this Agreement.

            "JMB/NYC Indemnifiable Action" shall have the meaning set forth
in Section 7.02(a)(i) hereof.

            "JMB/NYC Partners" shall mean Property Partners, Carlyle XIII
and Carlyle XIV.

            "JMB/NYC Special" shall have the meaning set forth in the first
paragraph of this Agreement.

            "Losses" shall mean any and all losses, claims, liabilities,
damages, costs or expenses (including, without limitation, reasonable
counsel fees) of any nature whatsoever, contingent or otherwise, foreseen
or unforeseen.

            "LTLP" shall have the meaning set forth in the recitals hereto.

            "LTLP LP Agreement" shall mean that certain Agreement of
Limited Partnership of 237/1290 Lower Tier Associates, L.P., dated as of
October 10, 1996, and entered into by and between Metropolis and UTLP.

            "Metropolis" shall have the meaning set forth in the first
paragraph hereof.

            "New 237 Park Indebtedness" shall mean any non-recourse
indebtedness secured by the 237 Property or by an interest in a limited
liability company which is directly or indirectly wholly-owned by 237 Park
LLC and through which the 237 Property is wholly owned (or any refinancing
thereof), which indebtedness shall constitute a "nonrecourse liability"
allocable to UTLP pursuant to U.S. Treasury regulation section 1.752-
1(a)(2) and shall qualify as qualified non-recourse financing within the
meaning of Section 465(b)(6) of the Code.

            "OHSP Adverse Transaction" shall mean (i) any sale,
disposition, transfer or exchange of the 237 Property, or of any of OHSP's
interests in the 237 Park Entities, (ii) any release, discharge or
reduction of New 237 Park Indebtedness of the 237 Park Entities below $200
million (other than through actions taken by a secured lender such as
application of insurance proceeds or condemnation awards or the exercise of
remedies, or in the case where the released indebtedness is concurrently
being replaced with other non-recourse indebtedness complying with
clause (B) below), (iii) any distribution of the assets of the 237 Park
Entities (other than distributions of cash and other distributions by the
237 Park Entities in the ordinary course of business), or (iv) any other
transaction or agreement to which OHSP or the 237 Park Entities is a party,
if as a result of any such transaction or agreement described in (i), (ii),
(iii), or (iv) above, JMB/NYC would be required to recognize a material
amount of taxable income or gain prior to the earlier of (1) the exercise
by FW Strategic of the right set forth in Section 4.02(c) hereof and the
receipt by JMB/NYC, in accordance with Section 4.02(e), of  all amounts to
be received under such Section 4.02(c), and (2) the exercise by JMB/NYC of
the right set forth in the proviso of Section 4.02(d)(ii) hereof and the
receipt by JMB/NYC, in accordance with Section 4.02(e), of  all amounts to
be received under such Section 4.02(d).  "OHSP Adverse Transactions" shall
specifically exclude (A)  distribution of income of the 237 Park Entities
or OHSP derived in the ordinary course of the 237 Park Entities' business,
(B) incurrence of New 237 Park Indebtedness of the properties owned by the
237 Park Entities on commercially reasonable terms in an aggregate amount
equal to not less than $200,000,000, (C) payment of amortization on non-
recourse financing encumbering the assets owned by the 237 Park Entities,
provided that the outstanding balance of such financing is not reduced
below $200,000,000, in the aggregate, between the date hereof and the
earlier of (1) the exercise by FW Strategic of the right set forth in
Section 4.02(c) hereof and the receipt by JMB/NYC, in accordance with
Section 4.02(e), of  all amounts to be received under such Section 4.02(c),

<PAGE>

and (2) the exercise by JMB/NYC of the right set forth in the proviso of
Section 4.02(d)(ii) hereof and the receipt by JMB/NYC, in accordance with
Section 4.02(e), of  all amounts to be received under such Section 4.02(d),
and other repayments of principal as described in the parenthetical of
clause (ii) above (i.e., actions taken by a secured lender such as
application of insurance proceeds or condemnation awards or the exercise of
remedies, or in the case where the released indebtedness is concurrently
being replaced with other non-recourse indebtedness complying with
clause (B) above), (D) a transfer of the 237 Property owned by any of the
237 Park Entities pursuant to an involuntary foreclosure or similar action
arising from a default by any of the 237 Park Entities with respect to its
obligations under its indebtedness, (E) a transfer of the 237 Property to
any 237 Park Entity in connection with the obligations of any 237 Park
Entity under its indebtedness, and (F) a transfer of the 237 Property
pursuant to a voluntary foreclosure or similar action arising from a
default by any of the 237 Park Entities with respect to such entities'
obligations under the New 237 Park Indebtedness; provided that, in the case
of a consensual foreclosure or deed in lieu of foreclosure by reason of a
default under the New 237 Park Indebtedness (as defined pursuant to the
terms thereof), the default is a bona fide default and the foreclosure or
deed in lieu of foreclosure is not a collusive transaction between the
holders of the New 237 Park Indebtedness and 237 Park LLC, or any member
thereof or any affiliate of either, attributable to any commonality of
ownership between the beneficial ownership of the New 237 Park Indebtedness
and 237 Park LLC or any member thereof or any affiliate of either.

            "OHSP" shall have the meaning set forth in the first paragraph
hereof.

            "OHSP Indemnifiable Action" shall have the meaning set forth in
Section 7.02(a)(ii) hereof.

            "OHSP Partnership Agreement" shall mean that certain agreement
of limited partnership relating to OHSP, as the same may be amended or
modified from time to time.

            "Parties" shall have the meaning set forth in the first
paragraph hereof.

            "Property Partners" shall have the meaning set forth in the
first paragraph of this Agreement.

            "Representatives" shall have the meaning set forth in Section
4.06(a) hereof.

            "Termination Date" shall have the meaning set forth in Section
6.01(b) hereof.

            "Transaction Agreements" shall mean this Agreement, the
Contribution Agreement, the Amendment and Release Agreement, and the
Interest Purchase Agreement.

            "1290 GP Corp." shall have the meaning set forth in the first
paragraph of this Agreement.

            "1290 L.P." shall have the meaning set forth in the first
paragraph hereof.

            "1290 LP Agreement" shall mean that certain agreement of
limited partnership relating to 1290 L.P., as the same may be amended or
modified from time to time.

            "1290 Sixth" shall have the meaning set forth in the recitals
hereto.

            "237 Book/Tax Amount" shall have the meaning set forth in
Section 4.02(a) hereof.

<PAGE>

            "237 GP Corp." shall have the meaning set forth in the first
paragraph hereof.

            "237 Park Entities" shall mean 237 Park LLC and any other
direct or indirect wholly-owned, single member, limited liability company
subsidiary of 237 Park LLC formed in connection with the New 237 Park
Indebtedness financing.

            "237 Park LLC" shall have the meaning set forth in the recitals
hereto.

            "237 Park L.P." shall have the meaning set forth in the
recitals hereto.

            "237 Park Partners LP Agreement" shall mean that certain
agreement of limited partnership relating to 237 Park L.P., as the same may
be amended or modified from time to time.

            "237 Property" shall have the meaning set forth in the recitals
hereto.

            "UTLP" shall have the meaning set forth in the first paragraph
hereof.

            "UTLP GP Corp." shall have the meaning set forth in the first
paragraph hereof.

             "UTLP LP Agreement" shall mean that certain Second Amended and
Restated Limited Partnership Agreement of UTLP, dated as of October 14,
1997, entered into by and between UTLP GP Corp., JMB/NYC and JMB/NYC
Special.

            "UTLP OHSP Units" shall have the meaning set forth in the
recitals hereto.

                                   SECTION 2

                                    CLOSING

            2.01         Transactions on the Closing Date.  Subject to the
terms and on the conditions of this Agreement, at or before Closing, each
of the following transactions (the "Closing Transactions") shall be
consummated in the following order (and only upon the completion of the
transaction set forth in the paragraph immediately prior to it):

            (a)   Conversion of 237 Park L.P.  (i)  LTLP, Metropolis, 237
GP Corp. and 237 Park L.P. shall, and LTLP, Metropolis and 237 GP Corp.
shall cause 237 Park L.P. to, (A) take all actions necessary in order to
effect the conversion of 237 Park L.P. from a Delaware limited partnership
to a Delaware limited liability company, and (B) immediately following such
conversion, appoint OHSP as the manager (and submit to OHSP the written
resignation of each other manager, if any) of 237 Park LLC, and amend its
certificate of formation to reflect such changes.

            (ii)  It is hereby expressly agreed by the Parties that, in
conjunction with, and to effectuate, the closing under the Interest
Purchase Agreement, OHSP shall have the right, in its sole discretion, to
amend, restate or otherwise modify the terms of the 237 Park Partners LP
Agreement and, upon the execution thereof, the limited liability company
agreement of 237 Park LLC.

            (b)   Amendments to the UTLP and 1290 LP Agreements.  (i) The
UTLP LP Agreement shall be amended so that such agreement shall conform in
both form and substance to the form attached to this Agreement as Exhibit
A.

<PAGE>

            (ii)  The 1290 LP Agreement shall be amended so that such
agreement shall conform in both form and substance to the form attached to
this Agreement as Exhibit B.

            (c)   Liquidation.  Metropolis, UTLP and UTLP GP Corp. shall
cause LTLP to liquidate in accordance with the terms of a liquidation
agreement attached hereto as Exhibit C, and in connection with such
liquidation, each of Metropolis and UTLP shall receive an in-kind
distribution of its pro rata portion of LTLP's interests in 237 Park LLC
and 1290 LP.

            (d)   Creation of 237 Park Entities; Transfer of 237 Property.
In accordance with the provisions of the Interest Purchase Agreement,
Metropolis, 237 GP Corp. and UTLP shall cause 237 Park LLC to, and 237 Park
LLC shall (x) form a subsidiary, which subsidiary shall at all times,
remain a direct or indirect wholly-owned subsidiary of 237 Park LLC; (y)
transfer ownership of the 237 Property to such subsidiary, and (z)
thereafter, form one or more additional subsidiaries as may be required by
the lenders in conjunction with the New 237 Park Indebtedness, which
additional subsidiaries shall at all times, remain direct or indirect
wholly-owned subsidiaries of 237 Park LLC.  Such subsidiaries shall,
together with 237 Park LLC, constitute the 237 Park Entities as defined
herein.

            (e)   Contribution of 237 Park LLC Membership Interests.
Subsequent to the sale by Metropolis and 237 GP Corp. of their respective
partnership interests (or, following the conversion of 237 Park L.P., of
their respective membership interests) in 237 Park L.P. or 237 Park LLC, as
applicable, to 237 Park Investors, L.L.C., UTLP shall contribute its
membership interest in 237 Park LLC to OHSP as consideration for UTLP's
receipt of Class A Partnership Units in OHSP with a Fair Market Value and
initial Capital Account on the Closing Date of $505,050.

            2.02  The Closing; Effective Time.  The closing (the "Closing")
with respect to the Closing Transactions shall take place (i) at the same
time (the "Effective Time"), on the same date (the "Closing Date") and at
the same location of the closing under the Interest Purchase Agreement,
subject to satisfaction or waiver of the conditions set forth in Section 3
hereof, or (ii) at such other place, time and/or date as the Parties shall
mutually agree in writing.

                                   SECTION 3

                             CONDITIONS TO CLOSING

            The obligation of each Party to consummate the Closing
Transactions shall be conditioned as follows:

            3.01  Subscription.  It shall be a condition of OHSP's
obligation to close hereunder that, simultaneous to the occurrence of the
Closing Transactions as set forth above, UTLP shall be delivering to OHSP a
Contribution Agreement in the form set forth in Exhibit D hereto.

            3.02  Closing Under Interest Purchase Agreement.  It shall be a
condition of OHSP's, Metropolis's, UTLP's and JMB/NYC's obligation to close
hereunder that, simultaneous to the occurrence of the Closing Transactions
as set forth above, the closing of the purchase under the Interest Purchase
Agreement shall be occurring (and all conditions to such closing shall
either have been satisfied or waived).

            3.03  Execution of the Amendment and Release Agreement.  It
shall be a condition of JMB/NYC's obligation to close hereunder that,
simultaneous to the occurrence of the Closing Transactions as set forth
above, the execution and delivery of the Amendment and Release Agreement in
the form set forth in Exhibit E hereto by the JMB/NYC Partners and
Metropolis shall be occurring.

<PAGE>

            3.04  Participation Extinguished.  It shall be a condition of
JMB/NYC's obligation to close hereunder that, simultaneous to the
occurrence of the Closing Transactions as set forth above, Metropolis shall
assign its interest in (i) that certain Second Amended, Restated and
Consolidated Note, dated as of October 10, 1996, made by JMB/NYC in favor
of Metropolis in an original principal amount of $88,572,780 (a true and
correct copy of which is attached hereto as Exhibit F); (ii) that Second
Amended, Restated and Consolidated Security Agreement, dated as of October
10, 1996, between JMB/NYC and Metropolis; and (iii) that certain
Participation Agreement, dated as of October 10, 1996, between Metropolis
and Michigan Avenue, L.L.C., a Delaware limited liability company
("Michigan Avenue, LLC"), to Michigan Avenue, LLC.

            3.05  Representations and Warranties; Covenants.  It shall be a
condition of each Party's obligation to close hereunder, that, with respect
to each other Party:

            (a)   such Party's respective representations and warranties
contained in this Agreement shall be true at and as of the Effective Time
with the same effect as though made at and as of such time; provided,
however, that, with respect to representations and warranties which
expressly speak as of a different date, the same shall be true as of such
date.

            (b)   such Party shall have performed or complied in all
material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it (and, with respect to
Section 2.01, such performance or compliance shall have occurred in the
appropriate order) on or before the Effective Time.

                                   SECTION 4

                           COVENANTS AND AGREEMENTS

            4.01  Pre-Closing Covenants and Agreements.  After the date
hereof and prior to the Effective Time (unless otherwise agreed to in
writing by all of the Parties):

            (a)   JMB Consent.  JMB/NYC, the JMB/NYC Partners and JMB/NYC
Special shall (and hereby do) expressly acknowledge, and grant their
unconditional consent and, as applicable, approval to, all of the Closing
Transactions expressly provided for in Section 2.01 hereof and all acts
which must be taken by any Party in connection therewith.

            (b)   [Intentionally Omitted]

            4.02  Post-Closing Covenants and Agreements.

            (a)   OHSP will treat and report UTLP's Code Section 704(c)
book/tax difference with respect to UTLP's interest in OHSP (taking into
account the remedial allocation under Section 4.02(b)(ii)) as equal to
approximately $191,400,000 as of the Effective Time (the "237 Book/Tax
Amount").

            (b)   From the Closing Date to the earlier of (x) the exercise
by FW Strategic of the right set forth in Section 4.02(c) hereof, and the
receipt by JMB/NYC, in accordance with Section 4.02(e), of all amounts to
be received under Section 4.02(c), and (y) the exercise by JMB/NYC of the
right set forth in the proviso of Section 4.02(d)(ii) hereof, and the
receipt by JMB/NYC, in accordance with Section 4.02(e), of all amounts to
be received under Section 4.02(d)(ii):

<PAGE>

            (i)   Maintenance and Allocation of Indebtedness.  OHSP shall,
or shall cause the 237 Park Entities to, (A) maintain outstanding New 237
Park Indebtedness in a principal amount equal at least to $200 million
which indebtedness shall qualify as qualified non-recourse financing
(within the meaning of section 465(b)(6)(B) of the Code); (B) report a
portion of the New 237 Park Indebtedness in a principal amount equal to not
less than the 237 Book/Tax Amount (as reduced each year by the amount
allocated to UTLP under the "remedial method" pursuant to clause (ii) of
this Section 4.02(b)) as being allocated to UTLP for U.S. federal income
tax purposes; (C) file all U.S. federal and state income tax returns in a
manner consistent with such allocation of the New 237 Park Indebtedness;
(D) report all of the liabilities allocated to UTLP as qualified non-
recourse financing (within the meaning of section 465(b)(6)(B) of the
Code); and (E) in preparing any income tax return, not make any statement
or file any attachment that indicates that there is more than one activity
with respect to the 237 Park Entities for purposes of section 465 of the
Code.

            (ii)  Election of Remedial Method.  UTLP and JMB/NYC hereby
expressly recognize and agree that OHSP shall elect to make U.S. federal
income tax allocations in respect of the 237 Property in accordance with
the "remedial method" described in U.S. Treasury regulation section 1.704-
3(d). OHSP agrees that the effect of using the "remedial method" described
in U.S. Treasury regulation section 1.704-3(d) shall be that UTLP shall
receive an annual remedial income allocation from the 237 Property in an
amount equal to approximately $4,600,000.

            (iii) OHSP Classification.  OHSP shall be classified as a
partnership (and not as a publicly traded partnership) for federal income
tax purposes.

            (c)   FW Strategic Call Right.  FW Strategic shall, upon ninety
(90) days' prior written notice to UTLP and JMB/NYC, have the continuing
right, exercisable at any time during the month of January of each calendar
year commencing with 2002, to purchase, or to cause its designee to
purchase, the UTLP OHSP Units free and clear of all liens, restrictions,
and encumbrances, for a cash amount (which cash amount shall not be reduced
or increased in any way in respect of any costs or fees imposed by any
Party) equal to the greater of the Fair Market Value of such UTLP OHSP
Units or $656,566.

            (d)   Non-Transferability and Non-Redeemability of the UTLP
OHSP Units and JMB/NYC Put Right. After the Effective Time:

            (i)   UTLP shall not in any way transfer, assign, sell,
abandon, hypothecate, pledge, exchange or otherwise dispose of or encumber
any of the UTLP OHSP Units or any interest therein without the consent of
OHSP, which consent may be withheld in OHSP's sole and absolute discretion.

            (ii)  notwithstanding any of the provisions of the OHSP
Partnership Agreement to the contrary, UTLP shall not have any rights to
redeem, or to cause the redemption of, the UTLP OHSP Units; provided,
however, that JMB/NYC shall, upon ninety (90) days' prior written notice to
UTLP, FW Strategic and OHSP, have the continuing right, exercisable at any
time during the month of July of each calendar year commencing with 2001,
to cause the sale by UTLP of the UTLP OHSP Units, and, in the event of the
exercise of such right, (x) UTLP shall have the obligation, and hereby
agrees, to sell, and (y) FW Strategic and OHSP, jointly and severally,
shall have the

<PAGE>

                  obligation, and hereby agree, to purchase (either
directly or through their respective assigns or designees), the UTLP OHSP
Units free and clear of all liens, restrictions, and encumbrances, for a
net cash amount (which cash amount shall not be reduced or increased in any
way in respect of any costs or fees imposed by any Party) equal to the
greater of the Fair Market Value of such UTLP OHSP Units or $505,050.

            (e)   Payment Directions.  Notwithstanding anything to the
contrary in this Agreement or otherwise, any payments to be made by FW
Strategic or OHSP pursuant to Section 4.02(c) or 4.02(d)(ii) of this
Agreement shall be made directly by wire transfer to the partners of UTLP
in the ratio of 99.001% of the funds to be paid pursuant to such sections
to JMB/NYC pursuant to the written wire instructions of JMB/NYC and .999%
of the funds to be paid pursuant to such sections to UTLP GP Corp. pursuant
to the written wire instructions of UTLP GP Corp., without reduction for
any fees, expenses or costs.

            (f)   1290 L.P. will treat and report UTLP's Code Section
704(c) book/tax difference with respect to UTLP's interest in 1290 L.P. as
equal to approximately $129,700,000 as of the Effective Time.

            (g)   From and after the Closing Date to the date UTLP is no
longer a partner in 1290 L.P., (i) 1290 L.P. agrees that the effect of
using the "remedial method" described in U.S. Treasury regulation section
1.704-3(d) shall be that UTLP shall receive an annual remedial income
allocation from 1290 L.P. in an amount equal to approximately $3,300,000;
(ii) 1290 L.P. shall qualify and report all of the liabilities allocated to
UTLP as qualified non-recourse financing (within the meaning of section
465(b)(6)(B) of the Code); and (iii) in preparing any income tax return,
1290 L.P. shall not make any statement or file any attachment that
indicates that there is more than one activity for purposes of Section 465
of the Code.

            4.03  OHSP Adverse Transactions.  OHSP hereby covenants that no
OHSP Adverse Transaction shall occur from the Closing Date hereof to the
earlier of (x) the exercise by FW Strategic of the right set forth in
Section 4.02(c) hereof, and the receipt by JMB/NYC, in accordance with
Section 4.02(e), of all amounts to be received pursuant to Section 4.02(c),
and (y) the exercise by JMB/NYC of the right set forth in the proviso of
Section 4.02(d)(ii) hereof, and the receipt by JMB/NYC, in accordance with
Section 4.02(e), of all amounts to be received under Section 4.02(d)(ii),
it being hereby expressly agreed that in no event shall the consummation of
any of the Closing Transactions be deemed to be an "OHSP Adverse
Transaction".

            4.04. Further Assurances.  After the date hereof and at any
time thereafter, each Party shall, subject to the fulfillment of each of
the covenants and conditions of performance set forth herein or the waiver
thereof, use its reasonable best efforts (a) to perform such further acts
and execute such documents as may be required to (i) effect the
transactions expressly provided in the Transaction Agreements, (ii) obtain
in a timely manner all necessary waivers, consents and approvals, and
effect all necessary filings, in each case as required in order to effect
the transactions expressly provided in the Transaction Agreements, and, (b)
to take, or cause to be taken, all other actions and to do, or cause to be
done, all other things reasonably necessary, proper or advisable to
consummate and make effective as promptly as practicable the provisions of
the Transaction Agreements and the transactions expressly provided therein.

            4.05. Negative Covenant.  After the date hereof and at any time
thereafter, no Party shall take or refuse to take any action (including,
without limitation, refusing to approve or otherwise consent to any act for
which the approval or consent of such Party is required) so as to hinder,
delay or otherwise impair the ability of any Party to consummate the
transactions expressly provided for in the Transaction Agreements.

<PAGE>

            4.06. Confidentiality.  (a)    Each Party hereby agrees that it
will not, without the prior written consent of the other Parties, disclose
to any person (i) the identities of the other Parties or any of their
investors or affiliates, (ii) the fact that this Agreement or the other
Parties exist, (iii) the status of the discussions or negotiations relating
to the transactions expressly provided for in the Transaction Agreements,
(iv) copies of, or the terms and provisions contained in, this Agreement,
the Contribution Agreement, the Amendment and Release Agreement, or any
other documents or agreements necessary to the consummation of the
transactions expressly provided for in the Transaction Agreements, or (v)
any other material confidential information with respect to the Parties or
their respective operations or other assets thereof (collectively,
"Confidential Information"); provided, however, that any Party may disclose
Confidential Information (A) to its partners or members (as applicable),
officers, directors, employees, affiliates, investors, agents, advisors and
lenders (including, without limitation, any accountants, attorneys or
financial advisors) (the "Representatives") who need to know such
information for the purpose of evaluating the transactions contemplated by
the Transaction Agreements (it being understood and agreed that such Party
shall advise such persons of their obligations concerning the
confidentiality of such Confidential Information and shall instruct such
persons to maintain the confidentiality of such Confidential Information in
accordance with the terms of this Agreement), (B) pursuant to a subpoena or
other legal process received in connection with a judicial, administrative
or regulatory proceeding in which such Party or its Representatives are
involved, subject to the provisions of Section 8.02, and (C) to the extent
that it is required to be disclosed by law or the rules or regulations of
any relevant regulatory organization, or that it is otherwise deemed
advisable in the opinion of counsel to such Party; provided, further that,
in the case of the foregoing clause (B), the applicable Party shall provide
the other Parties promptly with prior written notice of the applicable
matter and cooperate with the other Parties (at such other Parties' sole
cost and expense) to the extent such Parties seek any protective order to
prevent the disclosure of all or any portion of any Confidential
Information.

            (b)   No Party shall issue any press release or make any other
public announcement (it being agreed that the provisions of this paragraph
(b) shall apply to voluntary press releases or public announcement in
contrast to the required press releases or public announcements which are
governed by the provisions of paragraph (a) above) with respect to the
Transaction Agreements without the prior written consent of the other
Parties; provided, however, that any Party may issue a press release or
make a public announcement if, in the reasonable opinion of counsel to such
Party, (x) the information contained therein is required to be disclosed by
law or the rules or regulations of any relevant regulatory organization and
(y) such press release or public announcement does not involve the
disclosure of any Confidential Information.

            4.07  OHSP shall furnish to UTLP, within sixty (60) days after
the close of its fiscal year, a statement required pursuant to Section 7.3
of the OHSP Partnership Agreement.

            4.08  Each Party to this Agreement hereby covenants that it
shall notify in writing each other Party to this Agreement, prior to the
occurrence of and at the Closing hereunder, upon its having knowledge of
any facts or circumstances that would make any of the representations,
warranties, covenants or agreements contained in this Agreement untrue or
incorrect as of such date and as of the Closing Date.

            4.09  237 Park L.P., 237 GP Corp., Metropolis, OHSP and UTLP
agree that if there is an actual or deemed liquidation of 237 Park L.P.
(or, following conversion, 237 Park LLC), UTLP will be allocated for
federal income tax purposes the same amount of any indebtedness secured by
the 237 Property or by an interest in 237 Park L.P. (or, following
conversion, 237 Park LLC) or in a partnership or limited liability company
which is directly or indirectly wholly-owned by 237 Park L.P. (or,
following conversion, 237 Park LLC) as was allocated to UTLP immediately
prior to the actual or deemed liquidation.

<PAGE>

                                   SECTION 5

                        REPRESENTATIONS AND WARRANTIES

            5.01. OHSP hereby represents and warrants as of the date hereof
and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a limited partnership under the laws of the State of Delaware,
with full power and authority to perform its obligations under this
Agreement.

            (b)   It has all partnership power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (c)   This Agreement has been duly authorized and duly executed
and delivered by it and, assuming the due authorization, execution and
delivery by the other Parties, constitutes the valid and binding instrument
or agreement of it, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

            (d)   Neither the execution, delivery and performance of this
Agreement by OHSP nor the consummation of any other of the transactions
herein contemplated by OHSP nor the fulfillment of the terms hereof or
thereof by OHSP will conflict with, result in a breach or violation of, or
constitute a default (or any event which with the giving of notice or the
lapse of time or both would constitute a default) under the organizational
documents of OHSP or the terms of any indenture, loan agreement, bond,
note, evidence of indebtedness, mortgage, deed of trust, lease, license,
permit, franchise, certificate or other agreement or instrument to which
OHSP is a party or by which it is bound or to which any of its properties
are subject, or require any authorization or approval under or pursuant to
any of the foregoing, or violate in any material respect any statute,
treaty, rule, regulation, ordinance, judgment, order, writ, ruling,
injunction or decree applicable to OHSP of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over OHSP.

            (e)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by OHSP of this
Agreement, except for any of the foregoing which have been obtained.

            (f)   OHSP will not, (i) immediately after UTLP contributes its
membership interests in 237 Park LLC to OHSP in return for the UTLP OHSP
Units, be a partnership described in section 721(b) of the Code (i.e., a
partnership that would be an "investment company" within the meaning of
section 351(e) of the Code if it were incorporated) or (ii) at the time
that UTLP contributes its membership interests in 237 Park LLC to OHSP in
return for the UTLP OHSP Units, (A) have any plan or intention to become a
partnership described in section 721(b) of the Code or (B) have any
obligation to acquire additional assets or dispose of assets that would
cause it to become a partnership described in section 721(b) of the Code.

            (g)   OHSP will be classified as a partnership (and not as a
publicly traded partnership) for federal income tax purposes.

<PAGE>

            (h)   The audited financial statements of OHSP as of and for
the year ended December 31, 1998, and the unaudited financial statements of
OHSP as of and for the periods ended June 30, 1999, and September 30, 1999,
respectively, provided by OHSP to JMB/NYC present fairly in all material
respects the financial condition and results of operations of OHSP as of
and for the periods ended on the dates thereof.  Since September 30, 1999,
there has been no material adverse change in the financial condition,
assets, operations or prospects of OHSP other than in the ordinary course
of its business or fluctuations in the market value of its assets in the
ordinary course.

            (i)   OHSP is not subject to any litigation, claim, action or
proceeding that could, if adversely determined, have a material adverse
effect on the financial condition, assets, operations or prospects of OHSP
and nothing has come to the attention of OHSP to cause it to believe that
any entity in which it has invested is subject to any litigation, claim,
action or proceeding that could, if adversely determined, have a material
adverse effect on the financial condition, assets, operations or prospects
of OHSP.

            5.02. UTLP GP Corp. hereby represents and warrants, with
respect to UTLP, as of the date hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a limited partnership under the laws of the State of Delaware,
with full power and authority to perform its obligations under this
Agreement.

            (b)   It owns a 5% limited partnership interest in LTLP, free
and clear of any liens, restrictions, and encumbrances (except for those
liens, restrictions or encumbrances provided in the LTLP LP Agreement
running in favor of the partners of LTLP or their affiliates).

            (c)   It has all partnership power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (d)   This Agreement has been duly authorized and duly executed
and delivered by it and, assuming the due authorization, execution and
delivery by the other Parties, constitutes the valid and binding instrument
or agreement of it, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

            (e)   Neither the execution, delivery and performance of this
Agreement by UTLP nor the consummation of any other of the transactions
herein contemplated by UTLP or the fulfillment of the terms hereof or
thereof by UTLP will conflict with, result in a breach or violation of, or
constitute a default (or any event which with the giving of notice or the
lapse of time or both would constitute a default) under the organizational
documents of UTLP or the terms of any indenture, loan agreement, bond,
note, evidence of indebtedness, mortgage, deed of trust, lease, license,
permit, franchise, certificate or other agreement or instrument to which
UTLP is a party or by which it is bound or to which any of its properties
are subject, or require any authorization or approval under or pursuant to
any of the foregoing, or violate in any material respect any statute,
treaty, rule, regulation, ordinance, judgment, order, writ, ruling,
injunction or decree applicable to UTLP of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over UTLP.

<PAGE>

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by UTLP of this
Agreement, except for any of the foregoing which have been obtained.

            (g)   It has not been formed or recapitalized for the specific
purpose of acquiring the UTLP OHSP Units.

            5.03. JMB/NYC, the JMB/NYC Partners and JMB/NYC Special hereby
represent and warrant (each only as to itself) as of the date hereof and as
of the Closing, as follows:

            (a)   With respect to JMB/NYC, it is duly organized, validly
existing and in good standing as a limited partnership under the laws of
the State of Illinois, with full power and authority to perform its
obligations under this Agreement.  With respect to Property Partners,
Carlyle XIII and Carlyle XIV, each is duly organized, validly existing and
in good standing as a limited partnership under the laws of the State of
Illinois, with full power and authority to perform its obligations under
this Agreement.  With respect to JMB/NYC Special, it is duly organized,
validly existing and in good standing as a corporation,  under the laws of
the State of Delaware, with full power and authority to perform its
obligations under this Agreement.

            (b)   JMB/NYC owns a 98.901% limited partnership interest, and
JMB/NYC Special owns a 0.1% general partnership interest, in UTLP, in each
case, free and clear of any liens, restrictions, and encumbrances (except
for those liens, restrictions or encumbrances provided in the UTLP LP
Agreement running in favor of the partners of UTLP or their affiliates or
that certain Amended, Restated and Consolidated Security Agreement, dated
October 10, 1996 by and between JMB/NYC and Metropolis).  Property
Partners, Carlyle XIII and Carlyle XIV collectively own 100% of the limited
partnership interests in JMB/NYC.  JMB/NYC Special is the sole general
partner of JMB/NYC.

            (c)   JMB/NYC, JMB/NYC Special and each of the JMB/NYC Partners
have all requisite power and authority to enter into this Agreement, and
the person signing this Agreement on behalf of each such entity has been
duly authorized by it to do so.

            (d)   This Agreement has been duly authorized and duly executed
and delivered by JMB/NYC, JMB/NYC Special and each of the JMB/NYC Partners
and, assuming the due authorization, execution and delivery by the other
Parties, constitutes the valid and binding instrument or agreement of each
such entity, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

            (e)   Neither the execution, delivery and performance of this
Agreement by JMB/NYC, JMB/NYC Special or any of the JMB/NYC Partners nor
the consummation of any other of the transactions herein contemplated by
any such entity or the fulfillment of the terms hereof or thereof by any
such entity will conflict with, result in a breach or violation of, or
constitute a default (or any event which with the giving of notice or the
lapse of time or both would constitute a default) under the organizational
documents of any such entity or the terms of any indenture, loan agreement,
bond, note, evidence of indebtedness, mortgage, deed of trust, lease,
license, permit, franchise, certificate or other agreement or instrument to
which such entity is a party or by which it is bound or to which any of its
properties are subject, or require any authorization or approval under or
pursuant to any of the foregoing, or violate in any

<PAGE>

      material respect any statute, treaty, rule, regulation, ordinance,
judgment, order, writ, ruling, injunction or decree applicable to such
entity of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over such entity.

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by JMB/NYC, JMB/NYC
Special or any of the JMB/NYC Partners of this Agreement, except for any of
the foregoing which have been obtained.

            5.04. Metropolis hereby represents and warrants as of the date
hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Maryland, with
full power and authority to perform its obligations under this Agreement.

            (b)   It owns 100% of the capital stock of 237 GP Corp., free
and clear of any liens, restrictions, and encumbrances.  It owns a 95%
general partnership interest in LTLP, free and clear of any liens,
restrictions, and encumbrances.

            (c)   It has all corporate power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (d)   This Agreement has been duly authorized and duly executed
and delivered by Metropolis and, assuming the due authorization, execution
and delivery by the other Parties constitutes the valid and binding
instrument or agreement of Metropolis, enforceable in accordance with its
terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.

            (e)   Neither the execution, delivery and performance of this
Agreement by Metropolis nor the consummation of any other of the
transactions herein contemplated by Metropolis or the fulfillment of the
terms hereof or thereof by Metropolis will conflict with, result in a
breach or violation of, or constitute a default (or any event which with
the giving of notice or the lapse of time or both would constitute a
default) under the organizational documents of Metropolis or the terms of
any indenture, loan agreement, bond, note, evidence of indebtedness,
mortgage, deed of trust, lease, license, permit, franchise, certificate or
other agreement or instrument to which Metropolis is a party or by which it
is bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to Metropolis of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over Metropolis.

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by Metropolis of
this Agreement, except for any of the foregoing which have been obtained.

<PAGE>

            (g)   Attached hereto as Exhibit G is a schedule reflecting the
relevant dates and amounts of (i) all capital contributions and loans
(including the identity of the lender and a description of the terms
thereof) received by LTLP, 237 Park L.P. (and, following conversion, 237
Park LLC) and 1290 L.P. and (ii) all distributions made by LTLP, 237 Park
L.P. (and, following conversion, 237 Park LLC) and 1290 L.P. for the period
commencing October 10, 1996 through the date hereof and updated as of the
Closing after giving effect to the transactions expressly provided for in
the Transaction Agreements.

            (h)   Attached hereto as Exhibit H is a schedule reflecting all
cash and cash equivalents held by each of 237 Park L.P. (and, following
conversion, 237 Park LLC), 1290 Park L.P. and LTLP as of the date hereof
and updated as of the Closing after giving effect to the transactions
expressly provided for in the Transaction Agreements.

            5.05. UTLP GP Corp. hereby represents and warrants as of the
date hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware, with
full power and authority to perform its obligations under this Agreement.

            (b)   100% of the capital stock of UTLP GP Corp. is owned by
Metropolis.  UTLP GP Corp. owns a 0.999% general partnership interest in
UTLP, free and clear of any liens, restrictions, and encumbrances.

            (c)   It has all corporate power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (d)   This Agreement has been duly authorized and duly executed
and delivered by UTLP GP Corp. and, assuming the due authorization,
execution and delivery by the other Parties, constitutes the valid and
binding instrument or agreement of UTLP GP Corp, enforceable in accordance
with its terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.

            (e)   Neither the execution, delivery and performance of this
Agreement by UTLP GP Corp. nor the consummation of any other of the
transactions herein contemplated by UTLP GP Corp. or the fulfillment of the
terms hereof or thereof by UTLP GP Corp. will conflict with, result in a
breach or violation of, or constitute a default (or any event which with
the giving of notice or the lapse of time or both would constitute a
default) under the organizational documents of UTLP GP Corp. or the terms
of any indenture, loan agreement, bond, note, evidence of indebtedness,
mortgage, deed of trust, lease, license, permit, franchise, certificate or
other agreement or instrument to which UTLP GP Corp. is a party or by which
it is bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to UTLP GP Corp. of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over UTLP GP Corp.

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by UTLP GP Corp. of
this Agreement, except for any of the foregoing which have been obtained.

<PAGE>

            5.06. 237 Park L.P. hereby represents and warrants as of the
date hereof and as of the Closing, as follows:

            (a)   237 Park L.P. is duly organized, validly existing and in
good standing as a limited partnership under the laws of the State of
Delaware, with full power and authority to perform its obligations under
this Agreement; provided, however, that, upon conversion of 237 Park L.P.
to 237 Park LLC, 237 Park LLC shall be and shall continue to be through the
time of Closing, duly organized, validly existing and in good standing as a
limited liability company under the laws of the State of Delaware.

            (b)   237 Park L.P. has all partnership power and authority to
enter into this Agreement, and the person signing this Agreement on behalf
of it has been duly authorized by it to do so.

            (c)   This Agreement has been duly authorized and duly executed
and delivered by 237 Park L.P. and, assuming the due authorization,
execution and delivery by the other Parties, constitutes the valid and
binding instrument or agreement of 237 Park L.P. and, following conversion,
237 Park LLC, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

            (d)   Neither the execution, delivery and performance of this
Agreement by 237 Park L.P. or 237 Park LLC nor the consummation of any
other of the transactions herein contemplated by 237 Park L.P. or 237 Park
LLC or the fulfillment of the terms hereof or thereof by 237 Park L.P. or
237 Park LLC will conflict with, result in a breach or violation of, or
constitute a default (or any event which with the giving of notice or the
lapse of time or both would constitute a default) under the organizational
documents of 237 Park L.P. or 237 Park LLC or the terms of any indenture,
loan agreement, bond, note, evidence of indebtedness, mortgage, deed of
trust, lease, license, permit, franchise, certificate or other agreement or
instrument to which 237 Park L.P. or 237 Park LLC is a party or by which it
is bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to 237 Park L.P. or 237 Park LLC of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over 237 Park L.P. or 237 Park LLC.

            (e)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance, as applicable, by
237 Park L.P. or 237 Park LLC of this Agreement, except for any of the
foregoing which have been obtained.

            5.07. FW Strategic hereby represents and warrants as of the
date hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a limited partnership under the laws of the State of Texas,
with full power and authority to perform its obligations under this
Agreement.

            (b)   It has all partnership power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

<PAGE>

            (d)   This Agreement has been duly authorized and duly executed
and delivered by it and, assuming the due authorization, execution and
delivery by the other Parties constitutes the valid and binding instrument
or agreement of it, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

            (e)   Neither the execution, delivery and performance of this
Agreement by FW Strategic nor the consummation of any other of the
transactions herein contemplated by FW Strategic or the fulfillment of the
terms hereof or thereof by FW Strategic will conflict with, result in a
breach or violation of, or constitute a default (or any event which with
the giving of notice or the lapse of time or both would constitute a
default) under the organizational documents of FW Strategic or the terms of
any indenture, loan agreement, bond, note, evidence of indebtedness,
mortgage, deed of trust, lease, license, permit, franchise, certificate or
other agreement or instrument to which FW Strategic is a party or by which
it is bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to FW Strategic of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over FW Strategic.

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by FW Strategic of
this Agreement, except for any of the foregoing which have been obtained.

            5.08. 237 GP Corp. hereby represents and warrants as of the
date hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware, with
full power and authority to perform its obligations under this Agreement.

            (b)   100% of the capital stock of 237 GP Corp. is owned by
Metropolis.  237 GP Corp. owns a 1% general partnership interest (the sole
general partnership interest) in 237 Park L.P. (or, following the
conversion, a 1% membership interest in 237 Park LLC) free and clear of any
liens, restrictions, and encumbrances.

            (c)   It has all corporate power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (d)   This Agreement has been duly authorized and duly executed
and delivered by 237 GP Corp. and, assuming the due authorization,
execution and delivery by the other Parties, constitutes the valid and
binding instrument or agreement of 237 GP Corp, enforceable in accordance
with its terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.

<PAGE>

            (e)   Neither the execution, delivery and performance of this
Agreement by 237 GP Corp. nor the consummation of any other of the
transactions herein contemplated by 237 GP Corp. or the fulfillment of the
terms hereof or thereof by 237 GP Corp. will conflict with, result in a
breach or violation of, or constitute a default (or any event which with
the giving of notice or the lapse of time or both would constitute a
default) under the organizational documents of 237 GP Corp. or the terms of
any indenture, loan agreement, bond, note, evidence of indebtedness,
mortgage, deed of trust, lease, license, permit, franchise, certificate or
other agreement or instrument to which 237 GP Corp. is a party or by which
it is bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to 237 GP Corp. of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over 237 GP Corp.

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by 237 GP Corp. of
this Agreement, except for any of the foregoing which have been obtained.

            5.09. 1290 L.P. hereby represents and warrants as of the date
hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a limited partnership under the laws of the State of Delaware,
with full power and authority to perform its obligations under this
Agreement.

            (b)   It has all partnership power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (c)   This Agreement has been duly authorized and duly executed
and delivered by it and, assuming the due authorization, execution and
delivery by the other Parties, constitutes the valid and binding instrument
or agreement of it, enforceable in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

            (d)   Neither the execution, delivery and performance of this
Agreement by 1290 L.P. nor the consummation of any other of the
transactions herein contemplated by 1290 L.P. or the fulfillment of the
terms hereof or thereof by 1290 L.P. will conflict with, result in a breach
or violation of, or constitute a default (or any event which with the
giving of notice or the lapse of time or both would constitute a default)
under the organizational documents of 1290 L.P. or the terms of any
indenture, loan agreement, bond, note, evidence of indebtedness, mortgage,
deed of trust, lease, license, permit, franchise, certificate or other
agreement or instrument to which 1290 L.P. is a party or by which it is
bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to 1290 L.P. of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over 1290 L.P.

<PAGE>

            (e)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by 1290 L.P. of this
Agreement, except for any of the foregoing which have been obtained.

            5.10. 1290 GP Corp. hereby represents and warrants as of the
date hereof and as of the Closing, as follows:

            (a)   It is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware, with
full power and authority to perform its obligations under this Agreement.

            (b)   100% of the capital stock of 1290 GP Corp. is owned by
Metropolis.  1290 GP Corp. owns a 1.0% general partnership interest in 1290
L.P., free and clear of any liens, restrictions, and encumbrances.

            (c)   It has all corporate power and authority to enter into
this Agreement, and the person signing this Agreement on behalf of it has
been duly authorized by it to do so.

            (d)   This Agreement has been duly authorized and duly executed
and delivered by 1290 GP Corp. and, assuming the due authorization,
execution and delivery by the other Parties, constitutes the valid and
binding instrument or agreement of 1290 GP Corp, enforceable in accordance
with its terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.

            (e)   Neither the execution, delivery and performance of this
Agreement by 1290 GP Corp. nor the consummation of any other of the
transactions herein contemplated by 1290 GP Corp. or the fulfillment of the
terms hereof or thereof by 1290 GP Corp. will conflict with, result in a
breach or violation of, or constitute a default (or any event which with
the giving of notice or the lapse of time or both would constitute a
default) under the organizational documents of 1290 GP Corp. or the terms
of any indenture, loan agreement, bond, note, evidence of indebtedness,
mortgage, deed of trust, lease, license, permit, franchise, certificate or
other agreement or instrument to which 1290 GP Corp. is a party or by which
it is bound or to which any of its properties are subject, or require any
authorization or approval under or pursuant to any of the foregoing, or
violate in any material respect any statute, treaty, rule, regulation,
ordinance, judgment, order, writ, ruling, injunction or decree applicable
to 1290 GP Corp. of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over 1290 GP Corp.

            (f)   No consent, approval, authorization or order of, or
qualification with, any court or governmental authority is required in
connection with the execution, delivery or performance by 1290 GP Corp. of
this Agreement, except for any of the foregoing which have been obtained.

<PAGE>

                                   SECTION 6

                           TERMINATION AND AMENDMENT

            6.01         Termination.  This Agreement may be terminated at
any time before the Closing Date (except as otherwise provided herein) as
follows:

            (a)   by mutual written consent of all of the Parties;

            (b)   by any of the Parties, if the Closing shall not have
occurred on or before December 31, 1999 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 6.0l
shall not be available to any Party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of
the Closing to occur on or before the Termination Date; and

            (c)   by OHSP or Metropolis, upon written notice from either
such Party delivered to each of the other Parties hereto that the Interest
Purchase Agreement has been terminated.

            6.02  Effect of Termination.  In the event of the termination
of this Agreement pursuant to this Section 6, this Agreement shall become
void and of no effect with no liability to any Party; provided, however,
that (i) no such termination shall relieve any Party from any liability for
the damages (excluding consequential damages) resulting from any willful
and intentional breach of this Agreement, and (ii) this Section 6, as well
as Sections 4.06, 7.02, 8.02, 8.08 and 8.15 shall survive such termination.

                                   SECTION 7

                                INDEMNIFICATION

            7.01  [Intentionally Omitted]

            7.02  Post-Closing Indemnification.

            (a)   Indemnification.  From and after the Closing Date:

            (i)   JMB/NYC shall indemnify and hold OHSP harmless from and
against any and all Losses which OHSP (or, in the case of a breach relating
to Section 4.02(c) hereof, FW Strategic) may incur as a result of the JMB
Controlled Entities' taking or refusing to take any action which would
either (i) cause or result in the material inaccuracy or breach of any
representation or warranty of JMB/NYC contained in this Agreement, or (ii)
cause the material breach of any covenant or agreement of JMB/NYC contained
in this Agreement (including, without limitation, by prohibiting or
otherwise interfering with the exercise of the right of FW Strategic which
is set forth in Section 4.02(c) hereof) (each, a "JMB/NYC Indemnifiable
Action"); provided that any such JMB/NYC Indemnifiable Action is not
revoked or rescinded within thirty (30) days of JMB/NYC's receipt of notice
from OHSP that such an action has occurred.

<PAGE>

            (ii)  OHSP shall indemnify and hold JMB/NYC harmless from and
against any and all Losses which JMB/NYC may incur as a result of OHSP's
(or, in the case of a breach relating to the proviso in Section 4.02(d)(ii)
hereof, FW Strategic's) taking or refusing to take any action which would
either (i) cause or result in the material inaccuracy or breach of any
representation or warranty of OHSP contained in this Agreement, or (ii)
cause the material breach of any covenant or agreement of OHSP or, in the
case of the agreement set forth in the proviso of Section 4.02(d)(ii)
hereof, of FW Strategic, contained in this Agreement (including, without
limitation, by prohibiting or otherwise interfering with the exercise of
the right of JMB/NYC which is set forth in Section 4.02(d)(ii) hereof)
(each such action, a "OHSP Indemnifiable Action", and, together with each
JMB/NYC Indemnifiable Action, an "Indemnifiable Action"); provided that any
such OHSP Indemnifiable Action is not revoked or rescinded within thirty
(30) days of OHSP's receipt of notice from JMB/NYC that such an action has
occurred.

            (b)   Method of Asserting Claims, etc.  The Parties hereby
acknowledge and agree that, in the event that any of the applicable parties
set forth in Section 7.02(a) take any applicable Indemnifiable Action (and
provided that the applicable Indemnifiable Action is not revoked or
rescinded within the time periods set forth in Section 7.02(a)(i) and
(ii)), the applicable indemnifying party shall absolutely and
unconditionally be liable to pay, and shall pay, the applicable indemnified
party for any and all Losses suffered as a result thereof.  Notwithstanding
anything to the contrary in this Section 7.02, the foregoing sentence shall
not limit the remedies which either JMB/NYC or OHSP may have against any
other Party and the right of JMB/NYC or OHSP to seek injunctive relief with
respect to the applicable Indemnifiable Actions or specific performance of
the obligation underlying the same.

                                   SECTION 8

                           MISCELLANEOUS PROVISIONS

            8.01.        Successors. Except as otherwise provided herein,
this Agreement and all of the terms and provisions hereof shall be binding
upon and inure to the benefit of the Parties and their respective heirs,
executors, administrators, successors, trustees and legal representatives.

            8.02.        GOVERNING LAW.  (a)  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING LAWS RELATING TO THE VALIDITY, INTERPRETATION AND EFFECT OF
THIS AGREEMENT, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

            (b)   EACH OF THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE COURTS OF THE UNITED STATES OF
AMERICA LOCATED IN THE STATE OF NEW YORK FOR ANY LITIGATION ARISING OUT OF,
RELATING TO OR EXPRESSLY PROVIDED FOR IN THE TRANSACTION AGREEMENTS (AND
AGREES NOT TO COMMENCE ANY LITIGATION RELATING HERETO EXCEPT IN SUCH
COURTS), AND FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR
DOCUMENT BY U.S. REGISTERED MAIL TO ITS RESPECTIVE ADDRESS SET FORTH IN
SECTION 8.04 SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY LITIGATION
BROUGHT AGAINST IT IN ANY SUCH COURT.  EACH OF THE PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE

<PAGE>

IN ANY LITIGATION ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTIONS EXPRESSLY PROVIDED FOR IN THE TRANSACTION AGREEMENTS IN THE
COURTS OF THE STATE OF NEW YORK OR THE COURTS OF THE UNITED STATES OF
AMERICA LOCATED IN THE STATE OF NEW YORK AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

            (c)   EACH OF THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN CONNECTION
WITH ANY LITIGATION ARISING OUT OF, RELATING TO OR EXPRESSLY PROVIDED FOR
IN THE TRANSACTION AGREEMENTS.

            8.03.        Modification, Waiver in Writing.  Neither this
Agreement nor any of the terms hereof may be amended, changed, waived,
discharged or terminated, unless such amendment, change, waiver, discharge
or termination is in writing signed by each Party.

            8.04.        Notices.

            (a)   All notices, requests, directions and other
communications permitted or provided for hereunder shall be in writing
(including, unless the context expressly otherwise provides, facsimile
transmission) and mailed, faxed or delivered, (i) if to Metropolis, to the
following address: c/o Victor Capital Group, 605 Third Avenue, New York, NY
10016, Attention: John R. Klopp, (ii) if to JMB/NYC, JMB/NYC Partners or
JMB/NYC Special, to the following address: 900 North Michigan Avenue, 19th
Floor, Chicago, Illinois 60611, Attention: Stuart C. Nathan and Gary
Nickele, (iii) if to UTLP or UTLP GP Corp., to the following address: c/o
Victor Capital Group, 605 Third Avenue, New York, NY 10016, Attention: John
R. Klopp, (iv) if to 237 Park L.P. or 237 GP Corp., to the following
address: c/o Victor Capital Group, 605 Third Avenue, New York, NY 10016,
Attention: John R. Klopp, (v) if to 1290 Park L.P. or 1290 GP Corp., to the
following address: c/o Victor Capital Group, 605 Third Avenue, New York, NY
10016, Attention: John R. Klopp, (vi) if to OHSP or FW Strategic, to Oak
Hill Strategic Asset Management, L.P., 201 Main Street, Suite 3100, Fort
Worth, Texas 76102, Attention:  John Fant, or in each case, to such other
address as shall be designated by such Party in a written notice to the
other Parties hereunder from time to time.

            (b)   All such notices and communications transmitted by
overnight delivery shall be effective when delivered or upon refusal to
accept delivery (in the case of overnight delivery) or if mailed or
delivered, upon receipt or upon refusal to accept delivery.  All notices
hereunder sent by facsimile transmission shall be deemed sufficiently
served or given for all purposes hereunder upon transmission as confirmed
by the sender's verified facsimile transmission or certified facsimile
activity report, provided that such transmission is promptly followed by
another form of notice allowed by this Section 8.04.

            8.05.        Headings.  The Section and Sub-Section headings in
this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.

            8.06.        Severability.  Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

            8.07  Assignment.

            (a)   This Agreement shall not be assigned or otherwise
transferred by any party hereto whether by operation of law or otherwise
without the express written consent of each of the other Parties.

<PAGE>

            (b)   The Parties hereby agree that any purported assignment in
contravention of the preceding paragraph (a) shall be null and void.

            (c)   Subject to the preceding paragraph (a), this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
Parties and their respective permitted successors and assigns.

            8.08. Specific Performance.  The Parties acknowledge and agree
that a breach of the provisions hereof could not be adequately compensated
for by money damages and that the subject matter of the transactions
contemplated hereby is unique.  The Parties therefore agree that any Party
will be entitled, in addition to any other right or remedy available to him
or it, to an injunction restraining such breach or a threatened breach and
to specific performance of any such provision of this Agreement.

            8.09. Counterparts.  This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
be an original, but all of which shall together constitute one and the same
instrument.

            8.10.        No Third-Party Beneficiaries.  This Agreement and
the Contribution Agreement are solely for the benefit of the Parties to
this Agreement or the parties to the Contribution Agreement and JMB/NYC,
and nothing contained in this Agreement or the Contribution Agreement shall
be deemed to confer upon any other person or entity any right to insist
upon or to enforce the performance or observance of any of the obligations
contained herein or therein.

            8.11.        Prior Agreements. The Transaction Agreements
contain the entire agreements of the Parties hereto and thereto in respect
of the transactions expressly set forth therein, and all prior agreements
among or between such Parties (other than those letters dated October 14,
1996, regarding the reimbursement of certain fees and expenses of JMB/NYC),
whether oral or written, are superseded by the terms of such Transaction
Agreements.

            8.13.        Good Faith.  All Parties shall act in good faith in
the implementation of the foregoing provisions.

            8.14  Survival.  Except as otherwise provided herein, all
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing until the later of (x) the earlier of
(a) the exercise by FW Strategic of the right set forth in Section 4.02(c)
hereof, and the receipt by JMB/NYC, in accordance with to Section 4.02(e),
of all amounts to be received under Section 4.02(c), and (b) the exercise
by JMB/NYC of the right set forth in the proviso of Section 4.02(d)(ii)
hereof and the receipt by JMB/NYC, in accordance with Section 4.02(e), of
all amounts to be received under Section 4.02(d)(ii), and (y) the date
JMB/NYC no longer holds a direct or indirect interest in 1290 LP.

            8.15  Limit of Liability.  Any liability of JMB/NYC or any
JMB/NYC Partner under this Agreement shall be limited to its respective
assets.  In no event shall a deficit capital account of any partner of any
such partnership or any obligations of any partner to restore any deficit
capital account be deemed an asset of any such partnership.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

            IN WITNESS WHEREOF, the undersigned have executed this
Restructuring Agreement as of the date and year first above written.

                         OAK HILL STRATEGIC PARTNERS, L.P.

                         By:   F.W. Strategic Asset Management, L.P.,
                               General Partner

                               By:   STRATEGIC GENPAR, INC., General Partner

                                     By:
                                     Name:
                                     Title:

                         237/1290 UPPER TIER ASSOCIATES, L.P.

                         By:   237/1290 Upper Tier GP Corp.,
                               General Partner

                               By:
                               Name:
                               Title:

                         237/1290 UPPER TIER GP CORP.

                         By:
                         Name:
                         Title:

                         237 PARK PARTNERS, L.P.

                         By:   237 GP Corp., General Partner

                               By:
                               Name:
                               Title:

                         237 GP CORP.

                         By:
                         Name:
                         Title:

                         1290 PARTNERS, L.P.
                         By:   1290 GP Corp., General Partner

                               By:
                               Name:
                               Title:

                         1290 GP CORP.

                         By:
                         Name:
                         Title:

                         JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.

                         By:   Carlyle Managers, Inc., General Partner

                               By:
                               Name:
                               Title:

<PAGE>

                         PROPERTY PARTNERS, L.P.

                         By:   Carlyle Investors, Inc., General Partner

                               By:
                               Name:
                               Title:

                         CARLYLE-XIII ASSOCIATES, L.P.
                         By:   Carlyle Investors, Inc., General Partner

                               By:
                               Name:
                               Title:

                         CARLYLE-XIV ASSOCIATES, L.P.
                         By:   Carlyle Investors, Inc.,
                               its general partner

                               By:
                               Name:
                               Title:

                         CARLYLE MANAGERS, INC.

                         By:
                         Name:
                         Title:

                         METROPOLIS REALTY TRUST, INC.

                         By:
                         Name:
                         Title:

                         F.W. STRATEGIC ASSET MANAGEMENT, L.P.
                         (solely for the purpose of agreeing to certain
                         obligations set forth in Sections 4.02(c)
                         and (d) hereof)

                         By:   Strategic Genpar, Inc., General Partner

                               By:
                               Name:
                               Title:

<PAGE>

                                   Exhibit A

                        Amendments to UTLP LP Agreement

<PAGE>

                                   Exhibit B

                      Amendments to the 1290 LP Agreement

<PAGE>

                                   Exhibit C

                         Form of Liquidation Agreement

<PAGE>

                                   Exhibit D

                        Form of Contribution Agreement

<PAGE>

                                   Exhibit E

                    Form of Amendment and Release Agreement

<PAGE>

                                   Exhibit F

                Second Amended, Restated and Consolidated Note

<PAGE>

                                   Exhibit G

              Schedule of Capital Contributions and Distributions

<PAGE>

                                   Exhibit H

                     Schedule of Cash and Cash Equivalents

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