Exhibit 10.1
SKILLED HEALTHCARE GROUP, INC.
ACKNOWLEDGEMENT OF INCREASING LENDERS
     This Acknowledgement of Increasing Lenders (this “Agreement”) dated as of
March 31, 2008 is entered into by and between Skilled Healthcare Group, Inc.
(formerly known as SHG Holding Solutions, Inc.), a Delaware corporation (the
“Company”), the Lenders listed on the signature pages hereto (each an
“Increasing Lender” and, collectively, the “Increasing Lenders”) and Credit
Suisse, Cayman Islands Branch, as Administrative Agent (in such capacity,
“Administrative Agent”) pursuant to that certain Second Amended and Restated
First Lien Credit Agreement dated as of December 27, 2005 and entered into by
and among the Company, the financial institutions party thereto (the “Lenders”)
and the Administrative Agent and Collateral Agent (said Credit Agreement, as
amended, supplemented, restated or otherwise modified from time to time, being
the “Credit Agreement”). Capitalized terms used herein without definition shall
have the same meanings herein as set forth in the Credit Agreement.
     1. The Company has notified the Administrative Agent and the Lenders that
it intends to exercise its rights under subsection 2.1A(iv) of the Credit
Agreement to seek to increase the Revolving Loan Commitments by up to
$50,000,000.
     2. Pursuant to subsection 2.1A(iv) of the Credit Agreement, each Increasing
Lender desires to increase the principal amount of its Revolving Loan Commitment
under the terms of the Credit Agreement. Each Increasing Lender hereby ratifies,
as of the date hereof, and agrees to be bound by, all of the terms, provisions
and conditions contained in the Credit Agreement and in the Loan Documents which
are binding upon the Lenders, including, without limitation, all of the
authorizations of the Lenders set forth in Section 9 of the Credit Agreement, as
supplemented from time to time in accordance with the terms thereof.
     3. Each Increasing Lender’s portion of the Revolving Loan Commitments shall
be as set forth on Schedule A annexed hereto.
     4. Each Increasing Lender (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Agreement and to consummate the transactions contemplated hereby; (ii) from
and after the date hereof, it shall continue to be bound by the provisions of
the Credit Agreement and, to the extent of its Pro Rata Share of the
Commitments, shall continue to have the rights and obligations of a Lender
thereunder; and (iii) it has received such information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement on the basis of which it has made such analysis and decision; and
(b) agrees that (1) it will, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents; and
(2) it will continue to perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
     5. The undersigned officer of the Company hereby represents, warrants and
agrees as follows:

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          a. The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in all
material respects on and as of the date hereof to the same extent as though made
on and as of the date hereof, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date.
          b. No event has occurred and is continuing or would result from the
consummation of the increase in the Revolving Loan Commitments that constitutes
or would constitute an Event of Default or a Potential Event of Default.
          c. The Company and its Subsidiaries are in Pro Forma Compliance with
each of the financial covenants contained in subsection 7.6 of the Credit
Agreement.
          d. The following conditions to the increase under subsection 2.1A(iv)
of the Credit Agreement have been met: (i) the Company has not requested more
than five increases of the Commitments pursuant to Section 2.1A(iv) of the
Credit Agreement, (ii) the increase in the Revolving Loan Commitments is in a
minimum amount of at least $30,000,000, (iii) the aggregate principal amount of
the increases in the Revolving Loan Commitments and/or Term Loan Commitments
pursuant to subsection 2.1A(iv) of the Credit Agreement will not exceed
$150,000,000, upon consummation of the increase in the Revolving Loan
Commitments hereunder, (iv) the increase in the Revolving Loan Commitments is
for the purpose of funding Permitted Acquisitions or for general corporate
purposes, (v) the new Revolving Loan Commitments provided hereunder shall expire
on the same date as the existing Revolving Loan Commitments under subsection
2.1A(ii) of the Credit Agreement, (vi) the weighted average interest rates
applicable to the Revolving Loans hereunder does not exceed the rates set forth
in subsection 2.2 of the Credit Agreement by more than 25 basis points,
(vii) the Revolving Loan Commitments (and related Revolving Loans) provided
hereunder constitute permitted indebtedness under the Senior Subordinated Note
Indenture and shall constitute “Senior Indebtedness” (as defined in the Senior
Subordinated Note Indenture) for purposes of the Senior Subordinated Note
Indenture, and (viii) Lenders shall have received originally executed copies of
one or more favorable written opinions of Roland G. Rapp, General Counsel of the
Company, in form and substance reasonably satisfactory to Administrative Agent
and its counsel, dated as of the date hereof as to the increases in the
Revolving Loan Commitments and such other matters as Administrative Agent acting
on behalf of Lenders may reasonably request (this Agreement constituting a
written request by Company to such counsel to deliver such opinions to Lenders).
     6. The Company hereby accepts the additional Revolving Loan Commitments of
each Increasing Lender as set forth on Schedule A attached hereto (the “New
Revolving Loan Commitments”) and hereby notifies the Administrative Agent that
the aggregate principal amount of the Revolving Loan Commitments are hereby
increased pursuant to subsection 2.1A(iv) of the Credit Agreement by the amount
of the New Revolving Loan Commitments.
     7. The Company agrees that at any time and from time to time, upon the
written request of the Administrative Agent, it will execute and deliver such
further documents and instruments (including any replacement Note requested by
an Increasing Lender, and any Mortgage amendments and increases in title
policies requested by Administrative Agent) and

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take such further actions as the Administrative Agent may reasonably request in
connection with the increase in the Revolving Commitments pursuant to this
Agreement.
     8. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. Delivery of an executed
counterpart of this Agreement by telefacsimile or electronic mail shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile or electronic mail also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. This Agreement shall become effective upon execution of this
Agreement by the Administrative Agent, the Company and Increasing Lenders
holding new Revolving Loan Commitments evidencing an aggregate increase in the
principal amount equal to the Total Commitment/Loans for Increasing Lenders set
forth on Schedule A attached hereto.
     9. Upon effectiveness of this Agreement, the Commitments and Pro Rata
Shares of each Lender will be adjusted to give effect to the increase in the
Revolving Loan Commitments, effected hereby as of the date of this Agreement.
     10. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
     11. Each Increasing Lender agrees that at any time and from time to time,
upon the written request of the Administrative Agent, it will execute and
deliver such further documents and do such further acts and things as the
Administrative Agent may reasonably request in order to effect the purposes of
this Agreement.
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     IN WITNESS WHEREOF, the Company, Administrative Agent and the Increasing
Lenders have caused this Agreement to be duly executed by their respective
authorized officers, as of the day and year first above written.

          COMPANY  SKILLED HEALTHCARE GROUP, INC.
      By:           Name:           Title:        

Acknowledgement

 

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          ADMINISTRATIVE AGENT: CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, as Administrative Agent
      By:           Name:           Title:                 By:           Name:  
        Title:        

Acknowledgement

 

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          INCREASING LENDER:   [_______________], as Increasing Lender
      By:           Name:          Title:    

Acknowledgement