Document:

exv4w1

 

Exhibit
4.1

RIGHTS AGREEMENT AMENDMENT

          This Amendment, dated as of April 21, 2007, to the Rights Agreement, dated as of
February 6, 2001 (the “Rights Agreement”), is by and between Terayon Communication Systems, Inc., a
Delaware corporation (the “Company”), and Computershare Trust Company, N.A., as successor in
interest to Fleet National Bank (the “Rights Agent”).

          The Company and the Rights Agent have heretofore executed and entered into the Rights
Agreement. Pursuant to Section 27 of the Rights Agreement, the Company and the Rights Agent may
from time to time supplement or amend the Rights Agreement in accordance with the provisions of
Section 27 thereof and the Company desires and directs the Rights Agent to so amend the Rights
Agreement. All acts and things necessary to make this Amendment a valid agreement according to its
terms have been done and performed, and the execution and delivery of this Amendment by the Company
and the Rights Agent have been in all respects authorized by the Company and the Rights Agent.

     In consideration of the foregoing premises and mutual agreements set forth in the Rights
Agreement and this Amendment, the parties hereto agree as follows:

     1. The first sentence of Section 1(a) of the Rights Agreement is hereby modified and amended
to read in its entirety as follows:

““Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates (as such terms are hereinafter defined)
of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15%
or more of the Common Shares then outstanding, but shall not include Motorola, Inc., a
Delaware corporation (“Parent”), or any Affiliate or Associate thereof, including Motorola
GTG Subsidiary VI Corporation, a Delaware corporation (“Merger Sub”) (collectively,
“Buyer”); provided, however, that Buyer will become an “Acquiring Person” in the event that
Buyer becomes the Beneficial Owner of an aggregate of 15% or more of the Common Shares then
outstanding other than pursuant to the terms of the Agreement and Plan of Merger dated as of
April 21, 2007, as it may be amended from time to time (the “Merger Agreement”), by and
among the Company, Parent and Merger Sub or the transactions contemplated thereby.”

     2. Section l(c) of the Rights Agreement is hereby amended by adding as the final sentence
thereto the following:

“Notwithstanding anything in the Section l(c) to the contrary, Buyer shall not be deemed to
be a Beneficial Owner of or to beneficially own, any securities solely as a result of (i)
the approval, execution or delivery of the Merger Agreement and performance of the
transactions contemplated thereby or (ii) the consummation of the Merger (as defined in the
Merger Agreement).”

 

 

     3. Section l(n) of the Rights Agreement is hereby amended by adding as the final
sentence thereto the following:

“Notwithstanding anything in this Agreement to the contrary, no Shares Acquisition Date
shall be deemed to have occurred solely as a result of (i) the approval, execution or
delivery of the Merger Agreement and performance of the transactions contemplated thereby or
(ii) the consummation of the Merger (as defined in the Merger Agreement).”

     4. Section 3(a) of the Rights Agreement is hereby amended by adding as the final sentence
thereto the following:

“Notwithstanding anything in this Agreement to the contrary, no Distribution Date shall be
deemed to have occurred solely as a result of (i) the approval, execution or delivery of the
Merger Agreement and performance of the transactions contemplated thereby or (ii) the
consummation of the Merger (as defined in the Merger Agreement).”

     5. Section 7(a) of the Rights Agreement is hereby modified and amended to read in its
entirety as follows:

“The registered holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share (or such other number of shares or other securities) as
to which the Rights are exercised, at or prior to the earliest of (i) (x) the Close of
Business on February 6, 2011 or (y) immediately prior to the Effective Time of the Merger
(as defined in the Merger Agreement) (either, as applicable, the “Final Expiration Date”),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the
“Redemption Date”), or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.”

     6. Section 1l(a)(ii) of the Rights Agreement is hereby amended by adding as the final
sentence thereto the following:

“Notwithstanding anything in this Agreement to the contrary, no rights under this Section 1l(a)(ii) shall
arise or be triggered, and no event described in Section 11(a)(ii) shall be
deemed to have occurred, solely as a result of (i) the approval, execution or delivery of
the Merger Agreement and performance of the transactions contemplated thereby or (ii) the
consummation of the Merger (as defined in the Merger Agreement).”

     7. Section 13(a) of the Rights Agreement is hereby amended by adding as the final sentence
thereto the following:

“Notwithstanding anything in this Agreement to the contrary, none of the events described
in clauses (x) through (z) of the first sentence of this Section 13(a) shall be deemed to
have occurred solely as a result of (i) the approval, execution or delivery of the

 

 

Merger Agreement and performance of the transactions contemplated thereby or (ii) the
consummation of the Merger (as defined in the Merger Agreement).”

     8. Section 21 of the Rights Agreement is hereby amended by adding as the final sentence
thereto the following:

“In the event the transfer agency relationship in effect between the Company and the Rights
Agent terminates, the Rights Agent will be deemed to resign automatically on the effective
date of such termination; and any required notice will be sent by the Company.”

     9. The Rights Agreement is hereby amended by adding a new Section 34 to the end of the Rights
Agreement, which new Section 34 shall read in its entirety as follows:

“Section 34. Force Majeure. Notwithstanding anything to the contrary contained herein,
Rights Agent shall not be liable for any delays or failures in performance resulting from
acts beyond its reasonable control including, without limitation, acts of God, terrorist
acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of
computer facilities, or loss of data due to power failures or mechanical difficulties with
information storage or retrieval systems, labor difficulties, war, or civil unrest.”

     10. Except as expressly amended hereby, the Rights Agreement remains in full force and effect
in accordance with its terms.

     11. This Amendment to the Rights Agreement shall be governed by and construed in accordance
with the internal laws of the State of Delaware without giving effect to principles of conflicts of
laws that would require the application of the laws of any other jurisdiction.

     12. This Amendment to the Rights Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed an original, and all such counterparts
shall together constitute but one and the same instrument.

     13. Except as expressly set forth herein, this Amendment to the Rights Agreement shall not by
implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Rights
Agreement, all of which are ratified
and affirmed in all respects and shall continue in full force and effect.

     14. Capitalized terms used herein but not defined shall have the meanings given to them in the
Rights Agreement.

[Remainder of Page Intentionally Left Blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
the Rights Agreement to be duly executed as of the day and year first above
written.

	 	 	 	 	 
	 	Terayon Communication Systems, Inc. 

 	 
	 	By:  	/s/ Mark Richman
 	 
	 	 	Name:  	Mark Richman      	 
	 	 	Title: Chief Financial Officer 	 
	 
	 	Computershare Trust Company, N.A.,	 
	 	as Rights Agent 

 	 
	 	By:  	/s/  Dennis Moccia
 	 
	 	 	Name:  	Dennis Moccia      	 
	 	 	Title:  	Senior  Managing   Director 	 
	 

[Signature Page to Rights Agreement Amendment]<PAGE>
                                                                   EXHIBIT 10.12

                 FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
                           FIRST LIEN CREDIT AGREEMENT

                  This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED FIRST LIEN
CREDIT AGREEMENT (this "AMENDMENT") is dated as of January 31, 2007 and entered
into by and among SKILLED HEALTHCARE GROUP, INC., a Delaware corporation
("COMPANY"), SHG HOLDING SOLUTIONS, INC., a Delaware corporation ("HOLDINGS"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF ("LENDERS"), and
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Administrative Agent (in such capacity,
"ADMINISTRATIVE AGENT") and Collateral Agent (in such capacity, "COLLATERAL
AGENT"), and, for purposes of Section 4 hereof, CERTAIN SUBSIDIARIES OF COMPANY
LISTED ON THE SIGNATURE PAGES HEREOF ("CREDIT SUPPORT PARTIES"), and is made
with reference to that certain Second Amended and Restated First Lien Credit
Agreement dated as of December 27, 2005, by and among Company, Holdings, the
lenders listed party thereto, Administrative Agent and Collateral Agent (as
amended to the date hereof, the "CREDIT AGREEMENT"). Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.

                                    RECITALS

                  WHEREAS, Company and Lenders desire to amend the Credit
Agreement to (i), reduce the interest rate applicable to the Loans, (ii) permit
the Company to repay the Senior Subordinated Notes with a portion of the Net
Securities Proceeds of an IPO, (iii) permit Company to merge into Holdings, and
(iv) make certain other amendments as set forth herein.

                  NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:

SECTION 1.        AMENDMENTS TO THE CREDIT AGREEMENT

1.1      AMENDMENTS TO SUBSECTION 1.1:  DEFINITIONS.

         A. Subsection 1.1 of the Credit Agreement is hereby amended by adding
thereto the following definitions, which shall be inserted in proper
alphabetical order:

         "ESTIMATED ACQUISITION CAPEX AMOUNT" has the meaning assigned to that
term in subsection 7.3.

         "FIRST AMENDMENT" means that certain First Amendment to this Agreement
dated as of January 31, 2007 by and among Company, Holdings, the Lenders party
thereto, and Administrative Agent.

         "IPO" means the consummation of an initial public offering of any of
Company's or Holdings' common Equity Interests pursuant to an effective
registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act.

<TABLE>
                                       <S>              <C>
                                       1                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

         "PERMITTED HOLDINGS MERGER" has the meaning assigned to that term in
subsection 7.7.

         B. The definition of "APPLICABLE MARGIN" in subsection 1.1 of the
Credit Agreement is hereby amended by:

                  (i)  deleting clause (a) thereof in its entirety and
         substituting the following therefor:

         "(a) with respect to any Term Loan, 1.25% per annum in the case of a
         Term Loan that is a Base Rate Loan and 2.25% per annum in the case of a
         Term Loan that is a Eurodollar Rate Loan, and"; and

                  (ii) adding the following new paragraph to the end thereof:

"Notwithstanding the foregoing, after the effective date of the First Amendment,
upon the later of (i) the consummation of the IPO, and (ii) the credit
facilities contemplated hereby obtaining new ratings from both S&P and Moody's,
the Applicable Margin otherwise applicable to any Term Loan as set forth above
shall be reduced by the amount set forth in the table below under the caption
'Applicable Margin Reduction' opposite the applicable ratings for the Term Loans
from S&P and Moody's:

<Table>
<Caption>

            Ratings (Moody's/S&P)         Applicable Margin Reduction
            ---------------------         ---------------------------
            <S>                           <C>
              Ba3/BB- or higher                          0.50%
                    B1/B+                                0.25%
                B2/B or lower                            0%
</Table>

         For purposes of this definition, in the event of a split rating from
         S&P and Moody's, the lower rating shall govern."

         C. The definition of "CHANGE IN CONTROL" in subsection 1.1 of the
Credit Agreement is hereby deleted and replaced with the following:

         "'CHANGE IN CONTROL' means:

         (a) prior to the IPO, Permitted Holders shall cease to beneficially own
         and control at least 50% of the total voting power of the issued and
         outstanding shares of capital stock of Holdings entitled (without
         regard to the occurrence of any contingency) to vote for the election
         of members of the Governing Body of Holdings;

         (b) after the IPO, a Person, either individually or acting in concert
         with one or more other Persons, excluding Permitted Holders, shall
         beneficially own and control more than 30% of the total voting power of
         the issued and outstanding shares of capital stock of Holdings entitled
         (without regard to the occurrence of any contingency) to vote for the

<TABLE>
                                       <S>              <C>
                                       2                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

         election of members of the Governing Body of Holdings, unless Permitted
         Holders shall beneficially own and control a greater percentage of such
         voting power of Holdings;

         (c) the occurrence of a change in the composition of the Governing Body
         of Holdings such that a majority of the members of any such Governing
         Body are not Continuing Members; or

         (d) the occurrence of any 'Change in Control' as defined in the Senior
         Subordinated Note Indenture.

         As used herein, the term 'beneficially own' or 'beneficial ownership'
         shall have the meaning set forth in the Exchange Act and the rules and
         regulations promulgated thereunder."

         D. The definition of "CONSOLIDATED CAPITAL EXPENDITURES" in subsection
1.1 of the Credit Agreement is hereby amended by inserting the words "(including
any Estimated Acquisition CapEx Amount relating thereto)" after the words
"Permitted Acquisition."

         E. The definition of "COMPANY" in subsection 1.1 of the Credit
Agreement is hereby deleted and replaced with the following:

         "'COMPANY' means (i) prior to the Permitted Holdings Merger, Skilled
         Healthcare Group, Inc., and (ii) on and after the Permitted Holdings
         Merger, Holdings."

1.2      AMENDMENT TO SUBSECTION 2.4B: PREPAYMENTS OF LOANS AND REDUCTIONS IN
         REVOLVING LOAN COMMITMENT AMOUNT.

         Subsection 2.4B(iii)(c) of the Credit Agreement is hereby amended by
adding the following proviso immediately prior to the period at the end thereof:

         "; provided further, that with respect to Net Securities Proceeds of
         the IPO, the amount required to be applied to prepay the Term Loans
         pursuant to this subsection 2.4B(iii)(c) shall be equal to the lesser
         of (x) 50% of such Net Securities Proceeds, and (y) the excess of the
         Net Securities Proceeds of the IPO over the amount applied to redeem,
         repurchase or prepay up to $70,000,000 of Senior Subordinated Notes
         (plus accrued interest thereon and any prepayment premium required to
         be paid in connection therewith)."

1.3      AMENDMENTS TO SUBSECTION 6.1: FINANCIAL STATEMENTS AND OTHER REPORTS.

         A. Subsection 6.1(iii) of the Credit Agreement is hereby amended by
adding the following proviso to the end thereof:

         "; provided, however, that, so long as Company is required to file
         reports under Section 13 of the Exchange Act, the requirements of this
         paragraph shall be deemed satisfied by the delivery of the quarterly
         financials of Company on Form 10-Q for the relevant Fiscal Quarter,
         signed by the duly authorized Officer or Officers of Company."

<TABLE>
                                       <S>              <C>
                                       3                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

         B. Subsection 6.l(iv) of the Credit Agreement is hereby amended by
adding the following proviso to the end thereof:

         "; provided, however, that, so long as Company is required to file
         reports under Section 13 of the Exchange Act, the requirements of this
         paragraph shall be deemed satisfied by the delivery of the year-end
         financials of Company on Form 10-K for the relevant Fiscal Year, signed
         by the duly authorized Officer or Officers of Company."

1.4      AMENDMENTS TO SUBSECTION 6.8: EXECUTION OF SUBSIDIARY GUARANTY AND
         PERSONAL PROPERTY COLLATERAL DOCUMENTS AFTER THE EFFECTIVE DATE.

         Subsection 6.8 of the Credit Agreement is hereby amended by adding the
following paragraph at the end thereof:

         "Notwithstanding anything to the contrary in the foregoing, Company and
         its Subsidiaries shall be deemed to be in compliance with this
         subsection 6.8 with respect to any new Subsidiary if they perform the
         obligations under this subsection 6.8 on or prior to the next
         succeeding date on which financial statements are required to be
         delivered by Company to Administrative Agent pursuant to clause (iii)
         or (iv) of subsection 6.1, so long as the aggregate value of the assets
         of all Subsidiaries for which performance under subsection 6.8 has not
         been made, when added to the aggregate fair market value of all real
         property for which performance has not been made under subsection 6.9A,
         does not exceed $10,000,000 in the aggregate at any time."

1.5      AMENDMENT TO SUBSECTION 6.9: MATTERS RELATING TO ADDITIONAL REAL
         PROPERTY COLLATERAL.

         Subsection 6.9A of the Credit Agreement is hereby amended by adding the
following immediately prior to the period at the end thereof:

         "; provided, however, that notwithstanding anything to the contrary in
         the foregoing, Company and its Subsidiaries shall be deemed to be in
         compliance with this subsection 6.9A if they perform the obligations
         under this subsection 6.9A on or prior to the next succeeding date on
         which financial statements are required to be delivered by Company to
         Administrative Agent pursuant to clause (iii) or (iv) of subsection
         6.1, so long as the fair market value of all real property for which
         performance under subsection 6.9A has not been made, when added to the
         aggregate value of the assets of all Subsidiaries for which performance
         under subsection 6.8 has not been made, does not exceed $10,000,000 in
         the aggregate at any time."

1.6      AMENDMENT TO SUBSECTION 7.3:  INVESTMENTS; ACQUISITIONS.

         Subsection 7.3(vi) of the Credit Agreement is hereby amended by adding
the following proviso immediately prior to semicolon at the end thereof:

         "; provided further, that in connection with any acquisition permitted
         under this clause (vi), Company may elect to estimate the amount of
         capital expenditures that will be expended with respect to the acquired
         business for the twelve-month period

<TABLE>
                                       <S>              <C>
                                       4                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

         commencing with the month in which such acquisition took place (the
         'ESTIMATED ACQUISITION CAPEX AMOUNT'), and notify Administrative Agent
         of such Estimated Acquisition CapEx Amount promptly after such
         acquisition is consummated, in which event such Estimated Acquisition
         CapEx Amount shall be deemed a part of the consideration paid for such
         acquisition for purposes of this clause (vi) (and shall be counted
         against the cap on acquisitions such forth in this clause (vi))."

1.7      AMENDMENT TO SUBSECTION 7.5:  RESTRICTED JUNIOR PAYMENTS.

         Subsection 7.5 of the Credit Agreement is hereby amended by (i)
deleting "and" at the end of clause (iii) thereof and substituting a comma
therefor, and (ii) adding the following immediately prior to the period at the
end thereof:

         "and (v) redeem, repurchase or prepay up to $70,000,000 of the
         aggregate principal amount of the Senior Subordinated Notes (plus
         accrued interest thereon and any prepayment premium required to be paid
         in connection therewith) with the Net Securities Proceeds of an IPO."

1.8      AMENDMENT TO SUBSECTION 7.7: RESTRICTION ON FUNDAMENTAL CHANGES; ASSET
         SALES.

         Subsection 7.7 of the Credit Agreement is hereby amended by adding the
following phrase immediately prior to the period at the end thereof:

         "; and (x) Company may be merged with or into Holdings; provided that
         Holdings shall be the continuing or surviving Person; provided further,
         that Holdings shall, in connection with the merger, change its name to
         "Skilled Healthcare Group, Inc." (a 'PERMITTED HOLDINGS MERGER')."

1.9      AMENDMENT TO SUBSECTION 7.8:  CONSOLIDATED CAPITAL EXPENDITURES.

         Subsection 7.8 of the Credit Agreement is hereby amended by deleting
the reference to "2.50%" contained therein and substituting "3.00%" therefor.

1.10     AMENDMENTS TO SUBSECTION 7.11:  CONDUCT OF BUSINESS.

         Subsection 7.11 of the Credit Agreement is hereby amended by adding the
following at the end thereof: "This subsection 7.11 will no longer apply after a
Permitted Holdings Merger."

1.11     AMENDMENTS TO SUBSECTION 8.14:  CONDUCT OF BUSINESS BY HOLDINGS.

         Subsection 8.14 of the Credit Agreement is hereby amended by adding the
following proviso immediately prior to the semicolon at the end thereof:

         "; provided, however, that this subsection 8.14 will no longer apply
         after a Permitted Holdings Merger."

<TABLE>
                                       <S>              <C>
                                       5                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

SECTION 2.        CONDITIONS TO EFFECTIVENESS

         Section 1 of this Amendment shall become effective only upon the
satisfaction of the following conditions precedent (the date such conditions are
fulfilled is hereafter referred to as the "FIRST AMENDMENT EFFECTIVE DATE"):

         A. AMENDMENT. Administrative Agent shall have executed this Amendment
and received a counterpart of this Amendment that bears the signature of
Company, Holdings, each of the Lenders with Term Loan Exposure, Requisite
Lenders and each of the other Credit Support Parties.

         B. FEES AND EXPENSES. Company shall have paid all fees and expenses due
in connection with this Amendment and that certain engagement letter (the
"ENGAGEMENT LETTER") between Company and Credit Suisse Securities (USA) LLC.

SECTION 3.        REPRESENTATIONS AND WARRANTIES

         In order to induce Lenders and Administrative Agent to enter into this
Amendment and to amend the Credit Agreement in the manner provided herein,
Company and Holdings each represents and warrants to each Lender and
Administrative Agent that the following statements are true, correct and
complete as of the First Amendment Effective Date:

         A. CORPORATE POWER AND AUTHORITY. Each of Company and Holdings has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT").

         B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of each of Company and Holdings.

         C. NO CONFLICT. The execution and delivery by Company and Holdings of
this Amendment and the performance by Company and Holdings of the Amended
Agreement do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings, Company or any of their
Subsidiaries, the Organizational Documents of Holdings, Company or any of their
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on Holdings, Company or any of their Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Holdings, Company or
any of their Subsidiaries, (iii) result in or require the creation or imposition
of any Lien upon any of the properties or assets of Holdings, Company or any of
their Subsidiaries (other than Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders and other Liens permitted
under the Amended Agreement), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of
Holdings, Company or any of their Subsidiaries which have not been obtained,
except for such violations, conflicts, breaches, defaults or failures to obtain
approvals or consents which could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

<TABLE>
                                       <S>              <C>
                                       6                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

         D. GOVERNMENTAL CONSENTS. The execution and delivery by Holdings and
Company of this Amendment and the performance by Holdings and Company of the
Amended Agreement do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state or
other Governmental Authority or regulatory body which have not been obtained,
given or taken, or which will not be obtained, given or taken as and when
required, except for registrations, consents, approvals, notices and other
actions the failure to obtain or take have not and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

         E. BINDING OBLIGATION. This Amendment has been duly executed and
delivered by Company and Holdings and this Amendment and the Amended Agreement
are the legally valid and binding obligations of Company and Holdings,
enforceable against Company and Holdings in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.

         F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Amended Agreement are and will be true, correct and complete in all material
respects on and as of the date hereof and the First Amendment Effective Date to
the same extent as though made on and as of such dates, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on and
as of such earlier date.

         G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.

SECTION 4.        ACKNOWLEDGEMENT AND CONSENT

         Each Subsidiary Guarantor (each individually a "CREDIT SUPPORT PARTY"
and collectively, the "CREDIT SUPPORT PARTIES") has read this Amendment and
consents to the terms hereof and further hereby confirms and agrees that,
notwithstanding the effectiveness of this Amendment, the obligations of such
Credit Support Party under, and the Liens granted by such Credit Support Party
as collateral security for the indebtedness, obligations and liabilities
evidenced by the Credit Agreement and the other Loan Documents pursuant to, each
of the Loan Documents to which such Credit Support Party is a party shall not be
impaired and each of the Loan Documents to which such Credit Support Party is a
party is, and shall continue to be, in full force and effect and is hereby
confirmed and ratified in all respects.

         Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Credit Support Party to any future amendments to the Credit Agreement.

<TABLE>
                                       <S>              <C>
                                       7                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

SECTION 5.        MISCELLANEOUS

         A. REFERENCE TO AND EFFECT ON THE ORIGINAL CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

                  (i) On and after the First Amendment Effective Date, each
         reference in the Loan Documents to the "Credit Agreement,"
         "thereunder," "thereof" or words of like import referring to the Credit
         Agreement shall mean and be a reference to the Amended Agreement.

                  (ii) Except as specifically amended by this Amendment, all
         Loan Documents shall remain in full force and effect and are hereby
         ratified and confirmed.

                  (iii) The execution, delivery and performance of this
         Amendment shall not, except as expressly provided herein, constitute a
         waiver of any provision of, or operate as a waiver of any right, power
         or remedy of Administrative Agent or any Lender under any of the Loan
         Documents.

         B. HEADINGS. Section and subsection 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 or be given any substantive effect.

         C. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).

         D. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
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.

                [Remainder of this page intentionally left blank]

<TABLE>
                                       <S>              <C>
                                       8                First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

COMPANY:                        SKILLED HEALTHCARE GROUP, INC.

                                By: /s/ Roland Rapp
                                Name: Roland Rapp
                                Title: CAO/Secretary

HOLDINGS:                       SHG HOLDING SOLUTIONS, INC.

                                By: /s/ Roland Rapp
                                Name: Roland Rapp
                                Title: CAO/Secretary

<TABLE>
                                       <S>              <C>
                                       S-1              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

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

                                By: /s/ David Dodd
                                    ---------------------------
                                Name:  DAVID DODD
                                Title:  VICE PRESIDENT

                                By: /s/ James Neira
                                    ---------------------------
                                Name:  JAMES NEIRA
                                Title:  ASSOCIATE

<TABLE>
                                       <S>              <C>
                                       S-2              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

CREDIT SUPPORT PARTIES:

                                ALEXANDRIA CARE CENTER, LLC,
                                a Delaware limited liability company

                                ALTA CARE CENTER, LLC DBA ALTA GARDENS CARE
                                CENTER,
                                a Delaware limited liability company

                                ANAHEIM TERRACE CARE CENTER, LLC,
                                a Delaware limited liability company

                                BALDWIN HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                BAY CREST CARE CENTER, LLC,
                                a Delaware limited liability company

                                BRIARCLIFF NURSING AND REHABILITATION CENTER GP,
                                LLC,
                                a Delaware limited liability company

                                BRIARCLIFF NURSING AND REHABILITATION CENTER,
                                LP,
                                a Delaware limited partnership

                                By:     Briarcliff Nursing and Rehabilitation
                                        Center GP, LLC,
                                        its General Partner

                                BRIER OAK ON SUNSET, LLC,
                                a Delaware limited liability company

                                CAREHOUSE HEALTHCARE CENTER, LLC,
                                a Delaware limited liability company

                                CARMEL HILLS HEALTHCARE AND REHABILITATION
                                CENTER, LLC,
                                a Delaware limited liability company

                                CARSON SENIOR ASSISTED LIVING, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-3              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                CLAIRMONT BEAUMONT GP, LLC,
                                a Delaware limited liability company

                                CLAIRMONT BEAUMONT, LP,
                                a Delaware limited partnership

                                By:     Clairmont Beaumont GP, LLC,
                                        its General Partner

                                CLAIRMONT LONGVIEW GP, LLC,
                                a Delaware limited liability company

                                CLAIRMONT LONGVIEW, LP,
                                a Delaware limited partnership

                                By:     Clairmont Longview GP, LLC,
                                        its General Partner

                                COLONIAL NEW BRAUNFELS CARE CENTER, LP DBA
                                COLONIAL MANOR CARE CENTER,
                                a Delaware limited partnership

                                By:     Colonial New Braunfels GP, LLC,
                                        its General Partner

                                COLONIAL NEW BRAUNFELS GP, LLC,
                                a Delaware limited liability company

                                COLONIAL TYLER CARE CENTER, LP,
                                a Delaware limited partnership

                                By:     Colonial Tyler GP, LLC,
                                        its General Partner

                                COLONIAL TYLER GP, LLC,
                                a Delaware limited liability company

                                COMANCHE NURSING CENTER GP, LLC,
                                a Delaware limited liability company

                                COMANCHE NURSING CENTER, LP DBA COMANCHE TRAIL
                                NURSING CENTER,

                                a Delaware limited partnership

                                By:     Comanche Nursing Center GP, LLC,
                                        its General Partner

<TABLE>
                                       <S>              <C>
                                       S-4              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                CORONADO NURSING CENTER GP, LLC,
                                a Delaware limited liability company

                                CORONADO NURSING CENTER, LP,
                                a Delaware limited partnership

                                By:      Coronado Nursing Center GP, LLC,
                                         its General Partner

                                DEVONSHIRE CARE CENTER, LLC,
                                a Delaware limited liability company

                                EAST WALNUT PROPERTY, LLC,
                                a Delaware limited liability company

                                ELMCREST CARE CENTER, LLC,
                                a Delaware limited liability company

                                EUREKA HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                FLATONIA OAK MANOR GP, LLC,
                                a Delaware limited liability company

                                FLATONIA OAK MANOR, LP
                                DBA OAK MANOR NURSING CENTER,
                                a Delaware limited partnership

                                By:      Flatonia Oak Manor GP, LLC,
                                         its General Partner

                                FOUNTAIN CARE CENTER, LLC,
                                a Delaware limited liability company

                                FOUNTAIN SENIOR ASSISTED LIVING, LLC,
                                a Delaware limited liability company

                                FOUNTAIN VIEW SUBACUTE AND NURSING CENTER, LLC,
                                a Delaware limited liability company

                                GLEN HENDREN PROPERTY, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-4              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                GRANADA HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                GUADALUPE VALLEY NURSING CENTER GP, LLC,
                                a Delaware limited liability company

                                GUADALUPE VALLEY NURSING CENTER, LP,
                                a Delaware limited partnership

                                By:      Guadalupe Valley Nursing Center GP,
                                         LLC, its General Partner

                                HALLETTSVILLE REHABILITATION AND NURSING CENTER,
                                LP,
                                a Delaware limited partnership

                                By:      Hallettsville Rehabilitation GP, LLC,
                                         its General Partner

                                HALLETTSVILLE REHABILITATION GP, LLC,
                                a Delaware limited liability company

                                HALLMARK INVESTMENT GROUP, INC.,
                                a Delaware corporation

                                HALLMARK REHABILITATION GP, LLC,
                                a Delaware limited liability company

                                HALLMARK REHABILITATION, LP,
                                a Delaware limited partnership

                                By:      Hallmark Rehabilitation GP, LLC,
                                         its General Partner

                                HANCOCK PARK REHABILITATION CENTER, LLC,
                                a Delaware limited liability company

                                HANCOCK PARK SENIOR ASSISTED LIVING, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-6              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                HEMET SENIOR ASSISTED LIVING, LLC,
                                a Delaware limited liability company

                                HIGHLAND HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                HOLMESDALE HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                HOLMESDALE PROPERTY, LLC,
                                a Delaware limited liability company

                                HOSPICE CARE INVESTMENTS, LLC,
                                a Delaware limited liability company

                                HOSPICE CARE OF THE WEST, LLC,
                                a Delaware limited liability company

                                HOSPICE OF THE WEST, LP,
                                a Delaware limited partnership

                                By:      Hospice Care of the West, LLC,
                                         its General Partner

                                HOSPITALITY NURSING AND REHABILITATION CENTER,
                                LP DBA LUBBOCK HOSPITALITY HOUSE NURSING AND
                                REHABILITATION CENTER,
                                a Delaware limited partnership

                                By:      Hospitality Nursing GP, LLC,
                                         its General Partner

                                HOSPITALITY NURSING GP, LLC,
                                a Delaware limited liability company

                                LEASEHOLD RESOURCE GROUP, LLC,
                                a Delaware limited liability company

                                LIBERTY TERRACE HEALTHCARE AND REHABILITATION
                                CENTER, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-7              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                LIVE OAK NURSING CENTER GP, LLC,
                                a Delaware limited liability company

                                LIVE OAK NURSING CENTER, LP,
                                a Delaware limited partnership

                                By:      Live Oak Nursing Center GP, LLC,
                                         its General Partner

                                LOUISBURG HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                MONTEBELLO CARE CENTER, LLC,
                                a Delaware limited liability company

                                MONUMENT REHABILITATION AND NURSING CENTER, LP
                                DBA MONUMENT HILL REHABILITATION AND NURSING
                                CENTER,
                                a Delaware limited partnership

                                By:      Monument Rehabilitation GP, LLC,
                                         its General Partner

                                MONUMENT REHABILITATION GP, LLC,
                                a Delaware limited liability company

                                OAK CREST NURSING CENTER GP, LLC,
                                a Delaware limited liability company

                                OAK CREST NURSING CENTER, LP,
                                a Delaware limited partnership

                                By:      Oak Crest Nursing Center GP, LLC,
                                         its General Partner

                                OAKLAND MANOR NURSING CENTER, LP,
                                a Delaware limited partnership

                                By:      Oakland Manor GP, LLC,
                                         its General Partner

                                OAKLAND MANOR GP, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-8              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                PACIFIC HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                PREFERRED DESIGN, LLC,
                                a Delaware limited liability company

                                RICHMOND HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                RIO HONDO SUBACUTE AND NURSING CENTER, LLC,
                                a Delaware limited liability company

                                ROSSVILLE HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                ROYALWOOD CARE CENTER, LLC,
                                a Delaware limited liability company

                                SEAVIEW HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                SHARON CARE CENTER, LLC,
                                a Delaware limited liability company

                                SHAWNEE GARDENS HEALTHCARE AND REHABILITATION
                                CENTER, LLC,
                                a Delaware limited liability company

                                SHG PROJECT DALLAS, LLC,
                                a Delaware limited liability company

                                SHG RESOURCES, LP,
                                a Delaware limited partnership

                                By:      Leasehold Resource Group, LLC,
                                         its General Partner

                                SKILLED HEALTHCARE, LLC,
                                a Delaware limited liability company

                                SOUTH SWOPE PROPERTY, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-9              First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                SOUTHWEST PAYROLL SERVICES, LLC,
                                a Delaware limited liability company

                                SOUTHWOOD CARE CENTER GP, LLC,
                                a Delaware limited liability company

                                SOUTHWOOD CARE CENTER, LP,
                                a Delaware limited partnership

                                By:      Southwood Care Center GP, LLC,
                                         its General Partner

                                SPRING SENIOR ASSISTED LIVING, LLC,
                                a Delaware limited liability company

                                ST. ELIZABETH HEALTHCARE AND REHABILITATION
                                CENTER, LLC,
                                a Delaware limited liability company

                                ST. JOSEPH TRANSITIONAL REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                ST. LUKE HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                SUMMIT CARE CORPORATION,
                                a Delaware corporation

                                SUMMIT CARE PHARMACY, INC. DBA SKILLED CARE
                                PHARMACY,
                                a Delaware corporation

                                SYCAMORE PARK CARE CENTER, LLC,
                                a Delaware limited liability company

                                TEXAS CITYVIEW CARE CENTER GP, LLC,
                                a Delaware limited liability company

                                TEXAS CITYVIEW CARE CENTER, LP DBA CITYVIEW CARE
                                CENTER,
                                a Delaware limited partnership

                                By:     Texas Cityview Care Center GP, LLC,
                                        its General Partner

<TABLE>
                                       <S>              <C>
                                       S-10             First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                TEXAS HERITAGE OAKS NURSING AND REHABILITATION
                                CENTER GP, LLC,
                                a Delaware limited liability company

                                TEXAS HERITAGE OAKS NURSING AND REHABILITATION
                                CENTER, LP DBA HERITAGE OAKS NURSING AND
                                REHABILITATION CENTER,
                                a Delaware limited partnership

                                By:     Texas Heritage Oaks Nursing and
                                        Rehabilitation
                                        Center GP, LLC,
                                        its General Partner

                                THE CLAIRMONT TYLER GP, LLC,
                                a Delaware limited liability company

                                THE CLAIRMONT TYLER, LP,
                                a Delaware limited partnership

                                By:     The Clairmont Tyler GP, LLC,
                                        its General Partner

                                THE EARLWOOD, LLC,
                                a Delaware limited liability company

                                THE HEIGHTS OF SUMMERLIN, LLC,
                                a Delaware limited liability company

                                THE REHABILITATION CENTER OF INDEPENDENCE, LLC,
                                a Delaware limited liability company

                                THE WOODLANDS HEALTHCARE CENTER, LP,
                                a Delaware limited partnership

                                By:     The Woodlands Healthcare Center GP, LLC,
                                        its General Partner

                                THE WOODLANDS HEALTHCARE CENTER GP, LLC,
                                a Delaware limited liability company

                                TOWN AND COUNTRY MANOR GP, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-11             First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                TOWN AND COUNTRY MANOR, LP,
                                a Delaware limited partnership

                                By:     Town and Country Manor GP, LLC,
                                        its General Partner

                                TRAVELMARK STAFFING, LLC,
                                a Delaware limited liability company

                                TRAVELMARK STAFFING, LP,
                                a Delaware limited partnership

                                By:     Travelmark Staffing, LLC,
                                        its General Partner

                                VALLEY REALTHCARE CENTER, LLC,
                                a Delaware limited liability company

                                VILLA MARIA HEALTHCARE CENTER,
                                LLC DBA VILLA MARIA CARE CENTER,
                                a Delaware limited liability company

                                VINTAGE PARK AT ATCHISON, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT BALDWIN CITY, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT GARDNER, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT LENEXA, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT LOUISBURG, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT OSAWATOMIE, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT OTTAWA, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT PAOLA, LLC,
                                a Delaware limited liability company

                                VINTAGE PARK AT STANLEY, LLC,
                                a Delaware limited liability company

<TABLE>
                                       <S>              <C>
                                       S-12             First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

<PAGE>

                                WATHENA HEALTHCARE AND REHABILITATION CENTER,
                                LLC,
                                a Delaware limited liability company

                                WEST SIDE CAMPUS OF CARE GP, LLC,
                                a Delaware limited liability company

                                WEST SIDE CAMPUS OF CARE, LP,
                                a Delaware limited partnership

                                By:     West Side Campus of Care GP, LLC,
                                        its General Partner

                                WILLOW CREEK HEALTHCARE CENTER, LLC,
                                a Delaware limited liability company

                                WOODLAND CARE CENTER, LLC,
                                a Delaware limited liability company

                                By: /s/ Roland Rapp
                                      ------------------------------------------
                                      on behalf of each of the entities listed
                                      above

                                Name:  Roland G. Rapp
                                Title: Secretary and Chief Administrative
                                       Officer

<TABLE>
                                       <S>              <C>
                                       S-13             First Amendment to Second Amended and
                                                                    Restated Credit Agreement
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]