ASSET PURCHASE AGREEMENT

Exhibit 10.37.1

EXECUTION COPY

ASSET PURCHASE AGREEMENT

AMONG

HEALTHSOUTH CORPORATION,

HEALTHSOUTH MEDICAL CENTER, INC.

AND

THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ALABAMA

July 20, 2005

TABLE OF CONTENTS

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EXECUTION COPY

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 20, 2005, by and among HealthSouth Corporation, a Delaware corporation (“HealthSouth”), HealthSouth Medical Center, Inc., an Alabama corporation (“HMC”) (HealthSouth and HMC, collectively, “Sellers”; each a “Seller”) and The Board of Trustees of The University of Alabama (“Purchaser”).

W I T N E S S E T H:

WHEREAS, Sellers desires to sell, and Purchaser desires to purchase, certain assets comprising Sellers’ facilities and assets comprising the HealthSouth Medical Center in Jefferson County, Alabama (the “Hospital”) and its related assets, including, without limitation, the real property, fixtures, furniture, equipment, improvements, and inventory currently utilized by such Hospital (collectively with the Hospital, the “Business”);

WHEREAS, HMC, or its Affiliate, will retain the certificate of need under which the Hospital operates and the 219 beds currently licensed at the Hospital;

WHEREAS, an Affiliate of Purchaser will manage the Hospital pursuant to that certain Management Agreement between Purchaser and HMC, dated simultaneously herewith (the “Management Agreement”);

WHEREAS, as a condition to Closing, Purchaser must obtain a certificate of need to offer, subsequent to Closing, at the Hospital, the same services as those currently offered at Purchaser’s hospital in Birmingham, Alabama; and

WHEREAS, in contemplation of the execution of this Agreement and subject to the terms hereinafter set forth, Sellers have transferred to Purchaser, the ownership of 199 licensed beds located at HealthSouth Metro-West Hospital located in Fairfield, Alabama (the “MetroWest Beds”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

Section 1.1 Assets Purchased at the Closing. On the basis of the representations and warranties and subject to the terms and conditions set forth in this Agreement, at the Closing, Purchaser agrees to purchase from Sellers, and Sellers, for themselves and their Affiliates, agree to sell, assign, bargain, convey and deliver to Purchaser, the following assets of Sellers (collectively, the “Assets”), free from any liens, claims and encumbrances, except those listed on Schedule 1.3 hereto:

(a) the Real Property currently known as “HealthSouth Medical Center” located at 1201 11th Avenue South, Birmingham, Alabama as more particularly described on Exhibit A hereto, excluding the following properties: the Pita Stop Property, as described on

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Exhibit B hereto, the Bernstein Condominium and the McCoy Condominium, as described on Exhibit C hereto;

(b) all of Sellers’ rights under those contracts listed on Schedule 1.1(b)  hereto (as well as any contracts specifically related to the Hospital and mutually approved in writing by Sellers and Purchasers); and

(c) all operating assets, as materially listed on Schedule 1.1(c) hereto, including, without limitation, the real property, intellectual property, personal property, furniture, fixtures, equipment, improvements, vehicles, patient records, financial records, personnel files, inventory and supplies.

Section 1.2 Excluded Assets. Purchaser and Sellers acknowledge and agree that Purchaser is not acquiring any cash, accounts receivable, working capital, the operating business unit comprising the outpatient center (apart from the real property on which such business is located and which is part of the Assets) located on the campus of the Hospital, the certificate of need under which the Hospital currently operates, the licensed beds operated by HMC at the Hospital, or the real property or improvements thereon associated with the hospital being constructed by Sellers on U.S. Highway 280 in Jefferson County (the “Digital Hospital”). Although Sellers’ interest in the Gamma Knife Partnership is not included in the Assets, Sellers shall convey such interest to Purchaser as of January 1, 2007 pursuant to Section 6.6 of this Agreement.

Section 1.3 Assumed Liabilities, Contracts and Leases.

(a) As of the Closing, Purchaser agrees to assume the liabilities listed on Schedule 1.3 hereto (with those obligations in Section 1.3(c) hereof, the “Assumed Liabilities”), including all leases and subleases to which any of the Assets are subject. Purchaser does not assume any liabilities not specifically set forth on Schedule 1.3 . Sellers agree to provide Purchaser with all books and records relating to the Assumed Liabilities.

(b) Purchaser assumes and agrees to pay or perform, as the case may be, all obligations for the time period after the Closing with respect to those contracts, purchase orders, agreements and leases which are set forth on Schedule 1.3 hereto.

Section 1.4 Purchase Price.

(a) Unless adjusted pursuant to Section 1.4(b), the purchase price (the “Purchase Price”) for the Assets shall be THIRTY THREE MILLION DOLLARS ($33,000,000). The Purchase Price shall be paid via bank wire transfer at the Closing by Purchaser.

(b) The Purchase Price shall be subject to adjustment as follows:

(i) To the extent that any of the following real properties are not conveyed at the Closing in accordance with Section 6.5 hereof, the Purchase Price shall be reduced by the amount reflected for such non-conveyed real property as shown below:

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(ii) The Purchase Price shall be increased by the cost of any capital improvements to the Assets made by Sellers after the date of delivery of this Agreement if Purchaser agrees in writing to such addition to the Purchase Price.

(iii) The Purchase Price shall be reduced to $20,000,000 if on or after June 1, 2006: (A) Sellers elect to terminate this Agreement pursuant to Section 10.1(e) of this Agreement upon ten (10) days written notice to Purchaser; (B) Purchaser has not received both: (i) the CON for operation of the Assets and (ii) all regulatory approval for the relocation of the MetroWest Beds to the Purchaser’s campus, and (C) Purchaser agrees to purchase the Assets without any condition related to a CON or license for operation of the Assets. In order to exercise its right to purchase the Assets at the reduced Purchase Price provided in this Section 1.4(b)(iii), Purchaser must notify Sellers in writing within ten (10) business days of Sellers’ written notice hereunder. If Purchaser notifies Sellers that it is willing to accept these conditions for closing in exchange for the Purchase Price reduction, all representations, covenants and warranties of Sellers under this Agreement with respect to operation of the Assets as a health care facility shall be of no further force and effect, and the Closing shall occur within ten (10) business days of Purchaser’s written acceptance to Sellers and in no event later than June 30, 2006.

Section 1.5 Allocation of Purchase Price. The Purchase Price for the Assets being conveyed herein shall be allocated by Purchaser and Sellers among the Assets being sold by Sellers to Purchaser hereunder in accordance with the allocation contained on Schedule 1.5 hereto and such allocation shall be used by all parties hereto for all applicable tax and financial purposes.

Section 1.6 The Closing. The closing of the transactions contemplated by Section 1.1 (the “Closing”) shall occur as soon as practicable after the satisfaction of the conditions to Closing outlined in Article VII and Article VIII hereof. The Closing of the transactions contemplated by this Agreement shall occur at the offices of Balch & Bingham LLP, 1901 Sixth Avenue North, Suite 2600, Birmingham, Alabama, or at such other location as Purchaser and Sellers may agree upon.

Section 1.7 Prorations. All taxes, rent, revenues, water charges, utilities, or any other similar items relating to the Assets shall be prorated by the parties as of 12:01 a.m. on the day closing occurs (the “Closing Date”) as if Purchaser were vested with title to the Assets during the entire day upon which the Closing occurs. For purposes of proration, municipal ad valorem taxes shall be assumed to have been paid in advance and all other ad valorem taxes shall be assumed to be paid in arrears. Any expense amount which cannot be ascertained with certainty as of the Closing Date shall be prorated on the basis of the parties’ reasonable estimates of such

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amount, and shall be the subject of a final proration sixty (60) days after the Closing Date, or as soon thereafter as the precise amounts can be ascertained. Purchaser shall promptly notify Sellers when it becomes aware that any such estimated amount has been ascertained. Once all rental and expense amounts have been ascertained, Purchaser shall prepare, and certify as correct, a final proration statement which shall be subject to Sellers’ approval. Upon Sellers’ acceptance and approval of any final proration statement submitted by Purchaser, such statement shall be conclusively deemed to be accurate and final. The parties shall prorate payments with respect to patient services provided by HMC prior to Closing and Purchaser subsequent to Closing for patients who are inpatients of the Hospital at the Closing to the extent payment for such services is received on a single DRG or similar basis.

Section 1.8 Costs. Except as otherwise expressly provided for in this Agreement, each party will bear its own expenses incurred in connection with the preparation, execution and performance of its obligations under this Agreement.

Section 1.9 Purchaser’s Costs. Purchaser shall pay (i) all transfer taxes relating to the transfer of the Real Property to Purchaser; (ii) the cost of any environmental report required by Purchaser; (iii) the cost of any recordation fees to put the deed of record with the appropriate governmental authority; (iv) recordation fees and transfer taxes; (v) the cost of its legal counsel, advisors and other professionals employed by Purchaser in connection with its purchase of the Assets from Sellers; and (vi) the cost of all items for which Purchaser is expressly obligated to pay under this Agreement.

Section 1.10 Sellers’ Costs. Sellers shall pay (i) the cost of the premium for the Title Policy; (ii) the cost of an ALTA survey of the Real Property in form and substance satisfactory to Purchaser; (iii) and other expenses related to the discharge of any lien or encumbrance on the Real Property; (iv) the costs of its legal counsel, advisors and other professionals employed by Sellers in connection with the sale of the Assets to Purchaser; and (v) the cost of all items for which Sellers are expressly obligated to pay under this Agreement.

ARTICLE II

REPRESENTATION AND WARRANTIES OF SELLERS

Sellers hereby represent and warrant to Purchaser, as of the date of execution of this Agreement, as follows:

Section 2.1 Financial Reporting. HealthSouth is restating its historical financial reports on a consolidated corporate group basis and on June 27, 2005, filed with the United States Securities and Exchange Commission its Form 10-K Annual Report for the years ended December 31, 2002 and 2003, which included restatements of previously issued consolidated financial statements for the years ended December 31, 2000 and 2001. Such restatements have not been completed for the individual subsidiaries which make up the HealthSouth consolidated group. HMC’s financial reports have not been restated and Sellers make no representation as to the validity or accuracy of any financial information regarding HMC.

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Section 2.2 Reduced Business. Purchaser has been informed that the scope of the Hospital’s operations has materially changed since January 1, 2005, and, notwithstanding any other provision of this Agreement, Sellers make no representation that further changes will not occur prior to the Closing.

Section 2.3 Authority. Sellers and Sellers’ officers have full power and authority to execute, deliver and perform this Agreement and all agreements executed and delivered by Sellers pursuant to this Agreement, and have taken all action required by law or otherwise to authorize the execution, delivery and the performance of this Agreement and related documents. This Agreement and the transactions contemplated by this Agreement have been duly authorized by the Board of Directors of each of the Sellers. This Agreement constitutes a valid and legally binding obligation of Sellers, enforceable against Sellers in accordance with its terms. Sellers and each of the officers of Sellers have full power and authority, duly and validly authorized by its Board of Directors, and no further proceedings on the part of Sellers are necessary, to execute and deliver this Agreement and to consummate the transactions contemplated hereby. HMC’s sole shareholder has approved the transactions contemplated by this Agreement.

Section 2.4 Corporate Status. HMC is a corporation duly organized, validly existing and in good standing under the laws of the State of Alabama, and has all requisite power and authority to own, lease, and operate its properties and assets, and to carry on its business as is now being conducted. HealthSouth is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own, lease, and operate its properties and assets, and to carry on its business as is now being conducted.

Section 2.5 Title to Assets and Power to Convey. Except as set forth in Schedule 2.5 , HMC is the sole owner of, and has good and marketable title to all of the Assets and has full right and capacity to sell and deliver the Assets contemplated by this Agreement. Upon the Closing, Purchaser shall have acquired from HMC, good and marketable, legal and equitable title to the Assets, free and clear of all pledges, liens, security interests, claims, charges, restrictions, options, or encumbrances of any nature whatsoever, except as specified on Schedule 2.5 hereto.

Section 2.6 No Conflicts. Neither the execution and delivery of this Agreement by Sellers nor the consummation of the transactions contemplated hereby will: (a) conflict with or violate any provision of the articles of incorporation or bylaws of either Seller; (b) violate, conflict with, constitute a default (or an event which, with or without notice, lapse of time or both, or the occurrence of any other event, would constitute a default) under, result in the termination of, accelerate the performance required by, cause the acceleration of the maturity of any debt or obligation pursuant to, or result in the creation or imposition of any security interest, lien or other encumbrance upon any property or assets of Sellers or Sellers’ interests under any agreement or commitment to which Sellers are a party or by which Sellers are bound or to which the property of Sellers is subject, except such violations, conflicts or defaults which would not have a Material Adverse Effect; or (c) violate any federal, state or local law or any judgment, decree, order, regulation or rule of any court or governmental authority.

Section 2.7 Real Property. Exhibit A hereto describes the Real Property. Except as set forth in Schedule 2.5 and except for Permitted Encumbrances, Sellers have title in fee simple

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in the Real Property, free and clear of any Encumbrance, except for the Pita Stop Property and the Bernstein Condominium and the McCoy Condominium.

Section 2.8 Leases. Schedule 2.8 contains an accurate and complete list of all leases and subleases pursuant to which Sellers lease real or personal property with respect to the Assets. Except as set forth in Schedule 2.8 , all such leases are valid, binding and enforceable in accordance with their terms, except to the extent that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to creditors’ rights and remedies generally, and are in full force and effect; there are no existing defaults by Sellers thereunder; no event of material default has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute a material default thereunder by any party thereto.

Section 2.9 Contractual and Other Obligations. Schedule 2.9 lists all of the material written or oral contracts, agreements, and commitments of Sellers which pertain to the Assets.

Section 2.10 Employment Matters. As relates to the Assets, Schedule 2.10 contains a list of all full and part-time employees of Sellers, their wages and other remuneration of every kind. Except as set forth in Schedule 2.8 , the employment of each employee listed on Schedule 2.8 is terminable at will by Sellers, without restriction, penalty or payment of any kind.

Section 2.11 Trademarks, Service Marks, Trade Names, Copyrights and Data Processing Systems. All trademarks, service marks, trade names and copyrights (including trademarks, service marks, trade names and copyrights relating to computer software and hardware) used by Sellers at the Hospital are described and set forth in Schedule 2.11.

Section 2.12 Insurance. A complete list of the insurance policies maintained by Sellers and a description of all areas of the Hospital that are self-insured by Sellers and self-insurance reports are set forth in Schedule 2.12. To Sellers’ Knowledge, there are no notices of any pending or threatened termination or premium increases with respect to any of such policies.

Section 2.13 Environmental Matters. Except as set forth in Schedule 2.13 , as relates to the Assets, to Sellers’ Knowledge:

(i) Sellers have obtained all permits, licenses and other authorizations which are required in connection with the conduct of the Hospital under regulations relating to pollution or protection of the environment, including regulations relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including without limitation ambient air, surface water, groundwater, or land), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes (“Environmental Laws”);

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(ii) Sellers have obtained and are in material compliance with the terms and conditions of all permits, licenses and other authorizations required under Environmental Laws;

(iii) Sellers have not received notice of any past or present events, conditions, circumstances, activities, practices, incidents, actions or plans that may interfere with or prevent continued compliance with the permits, licenses and other authorizations referred to above or Environmental Laws;

(iv) No asbestos or equipment containing polychlorinated biphenyls or leaking underground or above-ground storage tanks is contained in or located at any facility owned, leased or controlled by Sellers;

(v) Sellers have fully disclosed all known past and present noncompliance with such Environmental Law, and all known past “releases” of a “reportable quantity” of any “hazardous substance”, or releases of oil, that could form the basis of any claim, action, suit, proceeding, hearing or investigation under any Environmental Law; and

(vi) Sellers have not received notice of any past or present events, conditions, circumstances, activities, practices, incidents, actions or plans that have resulted in or threaten to result in any common law or legal liability, or otherwise form the basis of any claim, action, suit, proceeding, hearing or investigation under any Environmental Law with respect to the Hospital.

Section 2.14 Litigation and Regulatory Investigations. Except as disclosed on Schedule 2.14 hereto, as it may relate to the Hospital, there are no pending litigation or regulatory proceedings by or against the Sellers or the Assets. To Sellers’ Knowledge, there is no pending or threatened action, proceeding, investigation, order, consent, decree or agreement with regulatory authorities with respect to the Assets, neither of the Sellers or any other person or entity, which questions the validity of this Agreement or could prevent or adversely affect any action taken or to be taken pursuant hereto or which would result in any revocation, suspension or limitation of any regulatory authority of the Assets or would have a Material Adverse Effect.

Section 2.15 Other Consents. Except as disclosed on Schedule 2.15 hereto, no consent, approval or authorization of, or notice to, any non-governmental (federal, state or local) person or entity, including, without limitation, parties to loans, contracts, leases or other agreements, is required in connection with the execution, delivery and performance of this Agreement by Sellers or the consummation by it of the transactions contemplated hereby.

Section 2.16 No Brokers. Sellers have not contracted for the services of any broker, salesperson, finder, agent, investment banker or any other person to whom a commission or fee will be due as a result of the transactions contemplated by this Agreement. Sellers hereby indemnify and hold Purchaser harmless from any claim by any other person or entity for a commission or fee arising out of Sellers’ actions and as a result of the transactions contemplated by this Agreement.

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Section 2.17 Provider Numbers. Attached hereto as Schedule 2.17 is a list of all Medicaid and Medicare provider numbers (the “Provider Numbers”) in the name of the Hospital. The Provider Numbers are in full force and effect as of the date of this Agreement. Sellers shall reasonably cooperate with Purchaser with respect to the issuance of a new provider number.

Section 2.18 Taxes. Except as provided on Schedule 2.18 hereto, HMC has filed or caused to be filed on a timely basis all material tax returns and all material reports with respect to taxes that are or were required to be filed pursuant to applicable requirements. HMC has paid, or made provision for the payment of, all material taxes that have or may become due for all periods covered by the tax returns or otherwise, or pursuant to any assessment received by HMC, except such taxes, if any, as are listed on Schedule 2.18(a) and are being contested in good faith and as to which adequate reserves (determined in accordance with generally accepted accounting principles) have been established by Sellers.

Section 2.19 License. As of the date of this Agreement, HMC holds a valid license to operate as an acute care hospital issued by the Alabama Department of Public Health (the “DPH License”), and otherwise has the legal ability to operate as an acute care hospital.

Section 2.20 Records. The non-financial records of HMC are complete and correct in all material respects, subject to the representations provided in Sections 2.1 and 2.2 herein.

Section 2.21 Sufficiency of Assets. Except as provided on Schedule 2.21 hereto, to Sellers Knowledge, the Assets constitute all of the tangible assets, of any nature whatsoever, necessary to operate the Hospital in the manner presently operated by HMC.

Section 2.22 Facility Compliance. To Sellers’ Knowledge, Sellers are not in violation of any building code, zoning or other ordinance relating to the Real Property.

Section 2.23 Absence of Certain Developments. Subject to the representations provided in Sections 2.1 and 2.2 herein: (i) there has been no action of eminent domain with respect to the Real Property and (ii) except as contemplated in Section 5.3 herein, there are no governmental (federal, state or local) restrictions to prevent the Hospital from operating as an acute care hospital.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Sellers as of the date hereof as follows:

Section 3.1 Organization. Purchaser is an Alabama corporation, validly existing and in good standing under