<PAGE>

                                                                   EXHIBIT 10.23

                                 AMENDMENT NO. 1

                                       TO

                     REVOLVING CREDIT AND SECURITY AGREEMENT

         THIS AMENDMENT NO. 1 (this "Amendment") is entered into as of October
30, 2003, by and among the Borrowers signatory hereto (each individually a
"BORROWER" and collectively, the "BORROWERS") and CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company ("CAPITALSOURCE"), as administrative agent
and Agent for Lenders (in such capacities, the "AGENT"), and Lenders party
hereto.

                                   BACKGROUND

         Certain Borrowers, Agent and Lenders entered into a Revolving Credit
and Security Agreement dated as of August 19, 2003 (as amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement")
pursuant to which Agent and Lenders provide Borrowers with certain financial
accommodations.

         Borrowers have requested that Agent and Lenders make certain amendments
to the Loan Agreement, and Agent and Lenders are willing to do so on the terms
and conditions hereafter set forth.

         NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers by Agent
and Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         1.       Definitions. All capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.

         2.       Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is hereby
amended as follows:

                  (a)      Appendix A is amended as follows:

                           (i)      the following defined terms are added in
                  their appropriate alphabetical order:

                           "Collateral Account" means a general interest bearing
                           deposit account established at and maintained by
                           Agent in the name of and for the benefit of Agent,
                           L/C Banks and Lenders and under the exclusive
                           dominion and control of Agent, into which Collateral
                           in the form of cash shall be deposited and as to
                           which Agent has "control" pursuant to Section 9-104
                           of the UCC.

                           "Funded L/C Exposure" means the aggregate principal
                           amount, as of any date of determination, of all
                           payments that were made by Agent or any

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                           L/C Bank under any Letter of Credit, but which have
                           not been reimbursed to Agent or such L/C Bank by the
                           Borrowers or converted into Advances pursuant to the
                           terms of this Agreement.

                           "L/C Bank" means, any bank that issues a Letter of
                           Credit for the account of the Borrowers.

                           "L/C Exposure" means the sum, as of any date of
                           determination, of the Unfunded L/C Exposure and the
                           Funded L/C Exposure.

                           "L/C Sublimit" shall mean One Million and 00/100
                           Dollars ($1,000,000).

                           "Letter of Credit" means each letter of credit issued
                           by Agent or any L/C Bank for or on behalf of
                           Borrowers, which (i) is a standby letter of credit,
                           (ii) issued for the purpose for which the Borrowers
                           have historically obtained letters of credit, or for
                           such other purpose as is reasonably acceptable to the
                           Agent, and, in all cases, for a purpose permitted for
                           use of proceeds hereunder, (iii) is denominated in
                           Dollars; (iv) is governed by the Uniform Customs and
                           Practices for Documentary Credits (1993 Revision),
                           International Chamber of Commerce Publication 500,
                           except as otherwise agreed by the Agent or the
                           applicable L/C Bank, and (v) is in form reasonably
                           satisfactory to the Agent and the applicable L/C
                           Bank.

                           "Unfunded L/C Exposure" means the maximum amount
                           which Agent or the L/C Banks may be required, under
                           all Letters of Credit outstanding as of any date of
                           determination, to pay on such date or at any future
                           time. Unfunded L/C Exposure shall not include any
                           amounts outstanding within the meaning of Funded L/C
                           Exposure.

                           (ii)     the following defined term is amended in its
                  entirety to provide as follows:

                           "Requisite Lenders" shall mean Lenders holding or
                           being responsible for (i) 100%, if there are only two
                           Lenders, and (ii) at least 66-2/3% if there are more
                           than two Lenders, in each case, of the sum of (a) all
                           outstanding Loans and (b) all unutilized Commitments,
                           including Unfunded L/C Exposure.

                  (b)      Section 2.1(a) is hereby amended by inserting the
phrase ", including Advances in connection with the issuance of Letters of
Credit," after the phrase "Pro Rata Share of Advances" in the second and third
lines thereof.

                  (c)      A new Section 2.16 is hereby inserted in its
appropriate sectional order to read as follows:

                           "2.16.   Letters of Credit

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                           (a)      Letter of Credit Commitment. On the terms
                           and subject to the conditions herein set forth, the
                           Borrowing Agent, on behalf of Borrowers, may, at any
                           time and from time to time after the date hereof and
                           prior to the Termination Date, request that Agent
                           issue, and on the terms and subject to the conditions
                           contained herein, Agent, if so requested, shall
                           issue, or shall cause an L/C Bank to issue, within
                           ten (10) Business Days after the request for such
                           Letter of Credit, for the account of the Borrowers
                           one or more Letters of Credit; provided that no
                           Letter of Credit shall be issued if and to the extent
                           that after giving effect to its issuance, the
                           Unfunded L/C Exposure, (i) exceeds the L/C Sublimit
                           or (ii) taken together with the outstanding Advances,
                           including, without duplication, any Funded L/C
                           Exposure, would exceed the lesser of the Facility Cap
                           or the Availability. Borrowers acknowledge that
                           Availability shall be reduced by a reserve in the
                           full face amount of any such Letter of Credit.

                           (b)      Related Letter of Credit Restrictions. If a
                           requested Letter of Credit is to have or is for the
                           purpose of replacing an existing Letter of Credit
                           that has, an expiry date falling after the Maturity
                           Date, then Borrower shall, on or before the
                           Termination Date (x) provide a "back-to-back" letter
                           of credit to Agent or the applicable L/C Bank in form
                           and substance reasonably satisfactory to Agent or the
                           applicable L/C Bank, as the case may be, issued by a
                           bank reasonably satisfactory to Agent or the
                           applicable L/C Bank, as the case may be, in an amount
                           equal to the Relevant Percentage of the then undrawn
                           stated amount of all outstanding Letters of Credit
                           and/or (y) deposit cash in the Collateral Account in
                           an amount equal to the Relevant Percentage of the
                           then undrawn stated amount of each such outstanding
                           Letter of Credit with respect to which a
                           "back-to-back" letter of credit was not issued to
                           Agent or the applicable L/C Bank; provided, however,
                           that notwithstanding the provision of such
                           "back-to-back" letter(s) of credit and/or the funding
                           of such Collateral Account, Borrowers shall remain
                           liable with respect to all Funded L/C Exposure and
                           Unfunded L/C Exposure, pursuant to the terms of this
                           Section 2.16 until the earlier of such time as each
                           such Letter of Credit expires by its terms without
                           any draws being made in respect thereof or such
                           Letter of Credit has been returned to Agent or the
                           applicable L/C Bank undrawn and marked "cancelled".
                           For this purpose, "Relevant Percentage" means, with
                           respect to the Termination Date, 105%, and with
                           respect to each annual anniversary thereafter, two
                           percent more than the Relevant Percentage for the
                           preceding annual anniversary.

                           (c)      Issuance of Letters of Credit. If the
                           Borrowers wish Agent to issue, or arrange for
                           issuance by an L/C Bank of, a Letter of Credit, the
                           Borrowing Agent, on behalf of Borrowers, shall give
                           Agent notice to that effect, specifying the proposed
                           issuance date for such Letter of Credit (which shall
                           be a Business Day), the stated amount of the Letter
                           of Credit so requested, the proposed expiration date
                           of such Letter of Credit and the name and address of
                           the beneficiary of such Letter of Credit (as well as

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                           such further information, relating to the use of such
                           Letter of Credit and otherwise, as Agent or the
                           applicable L/C Bank may reasonably request), at least
                           ten Business Days before the proposed issuance date
                           (or such shorter period as may be agreed upon in
                           writing by Agent or the applicable L/C Bank, as the
                           case may be, and the Borrowers).

                           (d)      Advances Arising from Letter of Credit
                           Payments. Any payment by Agent or the applicable L/C
                           Bank in respect of any Letter of Credit shall
                           constitute for all purposes of this Agreement the
                           making by Agent of an Advance in the amount of such
                           payment (and if such payment is made by an L/C Bank,
                           Agent shall reimburse such L/C Bank in the amount of
                           such payment). All Funded L/C Amounts shall bear
                           interest as provided pursuant to Section 2.3. With
                           respect to each Advance made pursuant to this Section
                           2.16, Borrowers shall be deemed to have certified the
                           statements contained in Section V as of the date the
                           payment constituting such Advance was made by Agent;
                           provided, however, that in the event any such
                           statement was not true and correct in all material
                           respects as of such date, such Advance shall be
                           repayable on demand; provided, further, that upon any
                           such repayment, the failure of any such statement to
                           be true and correct in all material respects as of
                           such date shall not constitute an Event of Default
                           hereunder, unless the failure of any such statement
                           to be true and correct in all material respects as of
                           such date would have constituted an Event of Default
                           hereunder even if such repaid Advance had never been
                           made.

                           (e)      Absolute Nature of Loan Obligations Relating
                           to Letters of Credit. The obligations of the
                           Borrowers in respect of Advances that arise as a
                           result of payments under Letters of Credit shall be
                           unconditional and irrevocable and shall be paid
                           strictly in accordance with the terms of this
                           Agreement under all circumstances, including, without
                           limitation: (i) any lack of validity or
                           enforceability of any Letter of Credit; (ii) the
                           existence of any claim, setoff, defense or other
                           right which any Borrower may have at any time against
                           a beneficiary of any Letter of Credit or the Agent or
                           the applicable L/C Bank; (iii) the fact that, or any
                           allegation that, any draft, demand, certificate or
                           other document presented under such Letter of Credit
                           is or was forged, fraudulent, invalid or insufficient
                           in any respect, or any statement therein is or was
                           untrue or inaccurate in any respect; (iv) any breach
                           of contract or dispute among or between any Borrower,
                           Agent, any L/C Bank, any Lender, or any other Person;
                           (v) payment by the Agent or any L/C Bank to the
                           beneficiary under any Letter of Credit against
                           presentation of a demand, draft or certificate or
                           other document which does not comply with the terms
                           of such Letter of Credit; (vi) any other circumstance
                           or happening whatsoever, which is similar to any of
                           the foregoing; or (vii) the fact that any Event of
                           Default shall have occurred and be continuing (it
                           being understood that any such payment by the
                           Borrowers of its obligations hereunder in respect of
                           any such Advance shall be without prejudice to, and
                           shall not constitute a waiver of, any

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                           rights any Party hereto may have or might acquire
                           against the beneficiary of any Letter of Credit or
                           against the Agent or any L/C Bank).

                           (f)      Risks Related to Letters of Credit. (i)
                           Borrowers assume all risks of the acts or omissions
                           of any beneficiary or transferee of any Letter of
                           Credit with respect to the use of any Letter of
                           Credit. Each party hereto agrees that the Agent,
                           Lenders and the L/C Banks and their respective
                           directors, officers or employees shall not be liable
                           or responsible, except that any such Person shall not
                           be excused hereby on account of its gross negligence
                           or willful misconduct, for (i) the use which may be
                           made of any Letter of Credit or for any acts or
                           omissions of any beneficiary or transferee in
                           connection therewith; (ii) any reference which may be
                           made to this Agreement or to any Letter of Credit in
                           any agreements, instruments or other documents; (iii)
                           the validity, sufficiency or genuineness of any
                           document, or of any endorsement thereon, even if such
                           document or endorsement should in fact prove to be in
                           any or all respects invalid, insufficient, fraudulent
                           or forged or any statement therein prove to be untrue
                           or inaccurate in any respect whatsoever; (iv) payment
                           by the Agent or any L/C Bank (acting in good faith)
                           to the beneficiary thereof against presentation of
                           documents which do not strictly comply with the terms
                           of any Letter of Credit; or (v) any other
                           circumstances whatsoever in making or failing to make
                           payment under any Letter of Credit, but the foregoing
                           is without prejudice to any claim that any Loan Party
                           may have against Agent, any L/C Bank or any Lender.
                           Agent or the applicable L/C Bank may, in connection
                           with any Letter of Credit accept any document that
                           appears on its face to be in order, without
                           responsibility for further investigation. The
                           determination whether a demand is properly presented
                           under any Letter of Credit prior to its expiration or
                           whether a demand presented under any Letter of Credit
                           is in proper and sufficient form may be made by the
                           Agent or the applicable L/C Bank in its sole
                           discretion, and such determination shall be
                           conclusive and binding upon the Borrowers to the
                           extent permitted by law. The Borrowers hereby waive
                           any right to object to any payment to the beneficiary
                           thereof made under any Letter of Credit on
                           presentation of any demand that is in the form
                           provided in the Letter of Credit but varies with
                           respect to punctuation, capitalization, spelling or
                           similar matters of form.

                                    (ii)     Each Lender shall to the extent of
                           the percentage amount equal to the such Lender's Pro
                           Rata Share of the aggregate Funded L/C Exposure be
                           deemed to have irrevocably purchased an undivided
                           participation ("Pro Rata Purchase") in (i) each such
                           Funded L/C Exposure, (ii) Agent's credit support
                           enhancement provided to any L/C Bank which issues any
                           Letter of Credit and (iii) each Advance made as a
                           consequence of the issuance of a Letter of Credit and
                           all disbursements thereunder (the items set forth in
                           clauses (i) (ii) and (iii) collectively referenced as
                           "L/C Advances"), in each case in an amount equal to
                           such Lender's applicable Pro Rata Share of the
                           outstanding amount of the Letters of Credit and

<PAGE>

                           disbursements thereunder. In the event that at the
                           time a disbursement is made the unpaid balance of
                           Advances exceeds or would exceed, with the making of
                           such disbursement, the amount permitted under Section
                           2.16(a), and such disbursement is not reimbursed by
                           Borrower within two (2) Business Days, Agent shall
                           promptly notify each Lender and upon Agent's demand
                           each Lender shall pay to Agent such Lender's Pro Rata
                           Share of such unreimbursed disbursement together with
                           such Lender's Pro Rata Share of Agent's unreimbursed
                           costs and expenses relating to such unreimbursed
                           disbursement. Upon receipt by Agent of a repayment
                           from Borrower of any amount disbursed by Agent for
                           which Agent had already been reimbursed by Lenders,
                           Agent shall deliver to each Lender that Lender's Pro
                           Rata Share of such repayment. Each Lender's
                           participation commitment shall continue until the
                           last to occur of any of the following events: (A)
                           Agent ceases to be obligated to issue or cause to be
                           issued Letters of Credit hereunder; (B) no Letters of
                           Credit issued hereunder remains outstanding and
                           uncancelled or (C) all Persons (other than the
                           Borrowers) have been fully reimbursed for all
                           payments made under or relating to Letters of Credit.

                           (g)      Letter of Credit Fee. On the first day of
                           each month, commencing on the first such day
                           following the Closing Date and continuing thereafter
                           until the date the Unfunded L/C Exposure has been
                           reduced to zero, including on the Termination Date,
                           the Borrowers shall pay to Agent, for the account of
                           Lenders to the extent of their participation in the
                           Unfunded L/C Exposure a letter of credit fee (the
                           "Letter of Credit Fee"), computed by applying the
                           Letter of Credit Fee rate set forth in Section 3.6
                           below, to the Unfunded L/C Exposure from day to day
                           in the prior month or partial month, as the case may
                           be (and, in the case of the first payment of this
                           fee, without duplication of fees paid under Section
                           3.6 from the Closing Date).

                           (h)      The aggregate stated amount available for
                           Letters of Credit issued by Agent or any L/C Bank
                           from time to time outstanding shall not exceed the
                           L/C Sublimit."

                  (d)      Sections 3.2 and 3.3 are hereby amended in their
entirety to read as follows:

                           "3.2.    Unused Line Fee.

                           (a)      Borrower shall pay to Agent for the ratable
                           benefit of Lenders monthly an unused line fee (the
                           "UNUSED LINE FEE") in an amount equal to 0.042% per
                           month of the difference derived by subtracting (i)
                           the daily average amount of the balances under the
                           Revolving Facility (excluding any Unfunded L/C
                           Exposure under the L/C Sublimit) outstanding during
                           the preceding month, from (ii) the Facility Cap. The
                           Unused Line Fee shall be payable monthly in arrears
                           on the first day of each successive

<PAGE>

                           calendar month (starting with the first calendar
                           month following the month in which the Closing Date
                           occurs).

                           (b)      In the event the daily average amount of the
                           balances under the Revolving Facility (excluding any
                           Unfunded L/C Exposure under the L/C Sublimit)
                           outstanding during any calendar month is less than
                           $3,000,000 (the "MINIMUM AVERAGE MONTHLY LOAN
                           AMOUNT") Borrowers shall pay to Agent for the benefit
                           of Lenders a minimum loan fee in an amount equal to
                           0.042% per month on the amount by which the Minimum
                           Average Monthly Loan Amount exceeds such daily
                           average amount of unpaid balances. Such fee shall be
                           calculated on the basis of a year of 360 days and
                           actual days elapsed and such fee shall be charged to
                           Borrowers' account on the first day of each month
                           with respect to the prior month. In the event
                           Borrowers request that Agent cease charging the
                           minimum loan fee set forth in this Section 3.2(b),
                           the Unused Line Fee shall automatically increase to
                           0.083% per month effective on the first month
                           following the date of such request.

                           3.3.     Collateral Management Fee.

                           Borrower shall pay Agent for its own account as
                           additional interest a monthly collateral management
                           fee (the "COLLATERAL MANAGEMENT FEE") equal to 0.083%
                           per month calculated on the basis of the daily
                           average amount of the balances under the Revolving
                           Facility (including any Unfunded L/C Exposure under
                           the L/C Sublimit) outstanding during the preceding
                           month. The Collateral Management Fee shall be payable
                           monthly in arrears on the first day of each
                           successive calendar month (starting with the first
                           calendar month following the month in which the
                           Closing Date occurs)."

                  (e)      A new Section 3.6 is inserted in its appropriate
sectional order to read as follows:

                           "3.6.    Letter of Credit Fee.

                           Borrower shall pay to Agent for the benefit of
                           Lenders to the extent of their participation in the
                           Unfunded L/C Exposure a Letter of Credit Fee of 3.5 %
                           per annum of the Unfunded L/C Exposure, plus any
                           administrative charges or expenses incurred by Agent
                           or customarily charged by Agent for such Letters of
                           Credit, which fee shall be payable monthly in arrears
                           on each day that interest under the Revolving
                           Facility is payable hereunder. Upon the occurrence
                           and during the continuance of an Event of Default,
                           all Letter of Credit Fees shall be payable on demand
                           at a rate equal to the Letter of Credit Fee plus 3%
                           per annum."

                  (f)      Section 4.2(c) is amended in its entirety to provide
as follows:

<PAGE>

                           "(c)     immediately after giving effect to the
                           requested Advance, the sum of (i) the aggregate
                           outstanding principal amount of Advances under the
                           Revolving Facility, including Advances in connection
                           with the Letters of Credit, and (ii) the Unfunded L/C
                           Exposure, shall not exceed the lesser of the
                           Availability and the Facility Cap and the L/C
                           Exposure shall not exceed the L/C Sublimit;"

                  (g)      Section 8(a) is amended in its entirety to provide as
follows:

                           "(a)     Borrower shall fail to pay any amount on the
                           Obligations, including any Funded L/C Exposure, or
                           provided for in any Loan Document when due (whether
                           on any payment date, at maturity, by reason of
                           acceleration, by notice of intention to prepay, by
                           required prepayment or otherwise);"

                  (h)      Section 11.1 is amended by adding the following
immediately prior to the period at the end thereof:

                           "; provided that if all Obligations (other than
                           Unmatured Surviving Obligations and Unfunded L/C
                           Exposure) have been satisfied and the Borrowers have
                           satisfied the requirements set forth in Section
                           2.16(b) to provide a `back-to-back' letter of credit
                           or deposit cash in the Collateral Account, then the
                           Liens granted to Agent, for the benefit of itself and
                           Lenders, under the Security Documents shall be
                           released".

         3.       Conditions of Effectiveness. This Amendment shall become
effective upon satisfaction of the following conditions precedent: Agent shall
have received (i) four (4) copies of this Amendment executed by Borrowers and
Lenders and (ii) and such other certificates, instruments, documents and
agreements as may be reasonably required by Agent or its counsel, each of which
shall be in form and substance reasonably satisfactory to Agent and its counsel.

         4.       Representations and Warranties. Each Borrower hereby
represents and warrants as follows:

                  (a)      This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrowers and are
enforceable against Borrowers in accordance with their respective terms.

                  (b)      Upon the effectiveness of this Amendment, each
Borrower hereby reaffirms all covenants, representations and warranties made in
the Loan Agreement to the extent the same are not amended hereby and agree that
all such covenants, representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.

                  (c)      No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment.

                  (d)      No Borrower has any defense, counterclaim or offset
with respect to the Loan Agreement.

<PAGE>

         5.       Effect on the Loan Agreement.

                  (a)      Upon the effectiveness of Section 2 hereof, each
reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import shall mean and be a reference to the Loan
Agreement as amended hereby.

                  (b)      Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and
are hereby ratified and confirmed.

                  (c)      The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of Agent
or Lenders, nor constitute a waiver of any provision of the Loan Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.

         6.       Governing Law. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of New York.

         7.       Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

         8.       Counterparts; Facsimile. This Amendment may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.

<PAGE>

         IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.

                               BORROWERS

                               BRIARCLIFF NURSING AND REHABILITATION CENTER, LP
                                   By:    Briarcliff Nursing and Rehabilitation
                                          Center GP, LLC, its general partner

                               CAREHOUSE HEALTHCARE CENTER, LLC
                               CLAIRMONT BEAUMONT, LP
                                   By:    Clairmont Beaumont GP, LLC, its
                                          general partner

                               CLAIRMONT LONGVIEW, LP
                                   By:    Clairmont Longview GP, LLC, its
                                          general partner

                               THE CLAIRMONT TYLER, LP
                                   By:    The Clairmont Tyler GP, LLC, its
                                          general partner

                               COLONIAL NEW BRAUNFELS CARE CENTER, LP
                                   By:    Colonial New Braunfels GP, LLC, its
                                          general partner

                               COLONIAL TYLER CARE CENTER, LP
                                   By:    Colonial Tyler GP, LLC, its general
                                          partner

                               COMANCHE NURSING CENTER, LP
                                   By:    Comanche Nursing Center GP, LLC, its
                                          general partner

                               CORONADO NURSING CENTER, LP
                                   By:    Coronado Nursing Center GP, LLC, its
                                          general partner

                               DEVONSHIRE CARE CENTER, LLC
                               THE EARLWOOD, LLC
                               FLATONIA OAK MANOR, LP
                                   By:    Flatonia Oak Manor GP, LLC, its
                                          general partner

                               FOUNTAIN CARE CENTER, LLC
                               FOUNTAIN SENIOR ASSISTED LIVING, LLC
                               GUADALUPE VALLEY NURSING CENTER, LP
                                   By:    Guadalupe Valley Nursing Center GP,
                                          LLC, its general partner

<PAGE>

                               HALLETTSVILLE REHABILITATION AND NURSING CENTER,
                               LP
                                   By:    Hallettsville Rehabilitation GP, LLC
                                          its general partner

                               HOSPITALITY NURSING AND REHABILITATION CENTER, LP
                                   By:    Hospitality Nursing GP, LLC, its
                                          general partner

                               LIVE OAK NURSING CENTER, LP
                                   By:    Live Oak Nursing Center GP, LLC, its
                                          general partner

                               MONUMENT REHABILITATION AND NURSING CENTER, LP
                                   By:    Monument Rehabilitation Center GP,
                                          LLC, its general partner

                               OAK CREST NURSING CENTER, LP
                                   By:    Oak Crest Nursing Center GP, LLC, its
                                          general partner

                               OAKLAND MANOR NURSING CENTER, LP
                                   By:    Oakland Manor, GP, LLC, its general
                                          partner

                               SKILLED HEALTHCARE II, LLC
                               SOUTHWOOD CARE CENTER, LP
                                   By:    Southwood Care Center GP, LLC, its
                                          general partner

                               SPRING SENIOR ASSISTED LIVING, LLC
                               TEXAS CITYVIEW CARE CENTER, LP
                                   By:    Texas Cityview Care Center, GP, LLC,
                                          its general partner

                               TEXAS HERITAGE OAKS NURSING AND REHABILITATION
                               CENTER, LP
                                   By:    Texas Heritage Oaks Nursing and
                                          Rehabilitation Center GP, LLC, its
                                          general partner

                               TOWN AND COUNTRY MANOR, LP
                                   By:    Town and Country Manor GP, LLC, its
                                          general partner

                               VALLEY HEALTHCARE CENTER, LLC
                               VILLA MARIA HEALTHCARE CENTER, LLC
                               WEST SIDE CAMPUS OF CARE, LP
                                   By:    West Side Campus of Care GP, LLC, its
                                          general partner

<PAGE>

                               WILLOW CREEK HEALTHCARE CENTER, LLC

                               By:    \s\ Roland G. Rapp
                                      ------------------------------------------
                               Name:  Roland G. Rapp
                               Title: Secretary

                               AGENT AND SOLE LENDER

                               CAPITALSOURCE FINANCE LLC

                               By:    \s\ J. Anthony Romero
                                      ------------------------------------------
                               Name:  J. Anthony Romero
                               Its:   Portfolio Manager