Asset Exchange And Substitution Agreement

Exhibit 10.1

ASSET EXCHANGE AND SUBSTITUTION AGREEMENT

This Asset Exchange and Substitution Agreement (the " Agreement" ) is dated as of April 24, 2006, and is by and among Universal Health Realty Income Trust, a Maryland real estate investment trust (the " Trust" ), and Universal Health Services, Inc., a Delaware corporation and certain of its wholly-owned subsidiaries (" UHS" ).

W I T N E S S E T H : WHEREAS, the Trust currently owns the property described in Exhibit A hereto, which property constitutes the real property comprising Chalmette Medical Center (" Chalmette" ), located in Chalmette, Louisiana, other than the certain capital additions to Chalmette that are owned by UHS (the " Trust Property" ); WHEREAS, the Trust Property was leased by the Trust, as lessor, to Chalmette Medical Center, Inc., a Louisiana corporation f/k/a UHS of De La Ronde, Inc. (" CMC" ), a wholly-owned subsidiary of UHS, as lessee, pursuant to that certain lease dated March 24, 1988 (the " Lease" ), which Lease incorporates the terms and conditions of that certain Master Lease Document, General Terms and Conditions, dated December 24, 1986, by and among the Trust and certain wholly-owned subsidiaries of UHS, together with all amendments thereto (the " Master Lease" ); WHEREAS, during the third quarter of 2005, the Trust Property was severely damaged and closed as a result of Hurricane Katrina and the medical center located thereon was rendered Unsuitable for its Primary Intended Use, as such phrase is defined in the Master Lease;

WHEREAS, in accordance with the terms of Section 14.2 of the Master Lease, and as part of an overall evaluation of certain other leases between subsidiaries of UHS and the Trust, UHS has elected to exchange and substitute new properties pursuant to and in accordance with the provisions of Article XXII of the Master Lease rather than restore the Trust Property or simply purchase the Trust Property from the Trust for cash;

WHEREAS, independent appraisals were obtained by the Trust and UHS which indicated that the pre-Hurricane Katrina fair market value of the Trust Property was $23,965,000, including the fair market value of the land, which was appraised for approximately $2.6 million;

WHEREAS, the Trust currently owns the real property comprising Southwest Healthcare System- Inland Valley Campus, The Bridgeway and Wellington Regional Medical Center, other than the certain capital additions to such properties, and leases such properties to subsidiaries of UHS; WHEREAS, the property described in Exhibit B hereto, which property consists solely of the certain capital additions located at the Southwest Healthcare System- Inland Valley Campus, The Bridgeway and Wellington Regional Medical Center (such capital additions at the respective properties are collectively the " UHS Property" ) will be transferred to UHT by the respective owners, each wholly-owned subsidiaries of Universal Health Services, Inc.;

WHEREAS, UHS is the current owner of the UHS Property; WHEREAS, certain capital additions are underway at Southwest Healthcare- Inland Valley Campus but not yet completed and UHS desires to complete them for the benefit of the Trust;

WHEREAS, the Trust has agreed to accept (1) $2.6 million of assets of The Bridgeway in exchange for the Chalmette land (the " Exchange" ), (2) the remaining assets of the UHS Property in substitution for the Trust Property (the " Substitution" ) and (3) to pay an amount in cash equal to the value of the UHS Property transferred pursuant to the Exchange and Substitution upon the completion of the capital additions at Southwest Healthcare System- Inland Valley Campus in excess of the $23,965,000 fair market value of the Trust Property (the " Payment" ), in full and complete satisfaction of the obligations of UHS under Article XXII of the Master Lease, and UHS desires to effect the Exchange, Substitution and Payment;

WHEREAS, the Trust intends to structure the Exchange herein contemplated as a like-kind exchange of property under the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (the " IRC" );

WHEREAS, the Trust intends to structure the Substitution herein contemplated as a receipt of proceeds as a result of an involuntary conversion under the provisions of Section 1033 of the IRC; and

WHEREAS, in connection with the Exchange and Substitution, UHS desires that the Trust terminate the Lease, in accordance with the terms thereof.

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

ARTICLE I

EXCHANGE AND SUBSTITUTION OF ASSETS AND TERMINATION OF LEASE Section 1.1 As soon as is practicable, on such date agreed to by the parties hereto (the " Closing Date" ), subject to the terms and conditions of the Agreement, the Trust agrees to convey to UHS good and marketable fee simple title to the Trust Property, free and clear of all liens and encumbrances except for Permitted Encumbrances (as hereinafter defined) and the Trust will terminate the Lease. Contemporaneously therewith, subject to the terms of this Agreement, UHS agrees to convey to the Trust, in exchange and substitution for the Trust Property and the Payment, good and marketable title to the UHS Property, free and clear of all liens and encumbrances except for Permitted Encumbrances. " Permitted Encumbrances" shall mean (a) liens, if any, for taxes, assessments and governmental charges not yet due and payable or delinquent, and (b) such other matters affecting the Trust Property or the UHS Property as UHS or the Trust may respectively approve. In addition thereto, after the Closing Date, on such date and time as may be designated by the parties hereto, the Trust shall deliver the Payment to UHS by check, wire transfer, or such other form of payment as may be mutually agreed upon by the parties hereto upon the substantial completion of the capital additions at Southwest Healthcare System-Inland Valley Campus as certified by HKS Architects, the architects retained by UHS to design and review the construction of such capital additions (the " Architects" ).

Section 1.2 On the Closing Date, the Trust shall duly deliver an executed and acknowledged special warranty deed to the Trust Property and assignments of any leases and Permits (as hereinafter defined) held by the Trust as owner of the Trust Property (collectively, the " Trust Deed" ). Contemporaneously therewith, UHS shall duly deliver an executed and acknowledged special warranty deed to the UHS Property and assignment of any Permits held by UHS as owner of the UHS Property. " Permits" means all assignable permits, consents, approvals, franchises, leases, conditional use permits and other certificates, including certificates of


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occupancy or any other governmental approvals or authorizations necessary to permit the use of the Trust Property or the UHS Property, as the case may be, in accordance with the terms hereof. Notwithstanding anything to the contrary contained herein, including Sections 1.6 and 4.1 hereof, on the Closing Date, the Trust shall deliver the Trust Deed to UHS, duly registered in the name of UHS.

Section 1.3 The conveyance of the Trust Property and the UHS Property shall include the conveyance of all of the Trust' s and of UHS' respective right, title and interest in and to all leases, Permits and warranties and in and to all Fixtures, as defined in the Lease, and, with respect to the Trust Property, all insurance proceeds, but shall not include any other furniture, equipment, inventory and other items of personal property owned by the Trust or UHS, as the case may be, and located or used in or in connection with the operation of Chalmette Medical Center or at Southwest Healthcare- Inland Valley Campus, The Bridgeway and Wellington Regional Medical Center, respectively, or any Permits relating to the use of the Trust Property or the UHS Property, respectively, other than those required to be held by the owner of the Trust Property or the UHS Property, as the case may be, all of which are and shall remain the property of the Trust or UHS, as the case may be.

Section 1.4 On the Closing Date, the Trust shall prepare a short form memorandum regarding termination of the Lease, duly executed and acknowledged to be duly recorded or filed for recordation in the manner required by the laws of St. Bernard Parish, State of Louisiana.

Section 1.5 As of the Closing Date, there shall be no adjustment of real or personal property taxes, assessments, water charges, ground rents, utilities or for premiums on existing insurance policies or any other items relating to the operation of the Trust Property, it being understood by the parties that CMC as lessee under the Lease was obligated to pay the same under the terms of the Lease and shall remain obligated to pay the same.

Section 1.6 On the Closing Date, the Trust and UHS shall respectively transfer, and UHS and the Trust shall respectively take title to, the Trust Property and the UHS Property in their present physical condition, subject to the completion of the Southwest Healthcare System-Inland Valley Campus capital additions by UHS and subject to reasonable use, wear and tear between the date hereof and the Closing Date without any warranty whatsoever, express or implied, as to its condition, habitability, or fitness for any particular purpose; and the Trust and UHS hereby waive any of the same.

Section 1.7 UHS expects to complete the capital additions at Southwest Healthcare System-Inland Valley Campus, described in Exhibit B hereto on or before December 31, 2006. Upon substantial completion of the capital additions as certified by the Architects, the Trust shall deliver the Payment as set forth in Section 1.1. If UHS fails to timely complete such capital additions, UHS shall offer to either, subject to the approval of the Trust, provide alternative substitution property or pay to the Trust an amount in cash equal to the substitution value of the capital addition as determined by the Architects.

Section 1.8 The Trust intends to structure (a) the Exchange herein contemplated as a like-kind exchange of property under the provisions of Section 1031 of the IRC, and (b) the Substitution herein contemplated as an involuntary receipt of proceeds under the provisions of Section 1033 of the IRC. UHS agrees to cooperate with the Trust, when requested, to structure these transactions in such manner, including, without limitation, the execution of any documents, including an amendment to the Agreement, if required, provided that such actions will


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not require UHS to incur any additional costs, liability or expense, and UHS is held harmless against any liability arising because of the intended like-kind exchange or substitution, or any challenge to or failure of these transactions to qualify for such treatment.

ARTICLE II CLOSING

Section 2.1 The closing shall be held at the offices of Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York 10103 on the Closing Date or at such other place and at such ...