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(i) Amendment No. 1 dated as of June 6, 2013 (this “Amendment”), to the Fourth Amended and Restated Credit Agreement dated as of April 12, 2012 (the “Existing Credit Agreement”), among SKILLED HEALTHCARE GROUP, INC., a Delaware corporation (“Company”), the LENDERS from time to time party thereto and CREDIT SUISSE AG, as Administrative Agent for Lenders (in such capacity, “Administrative Agent”) and as Collateral Agent for Lenders (in such capacity, “Collateral Agent”).

WHEREAS, Company, Administrative Agent and certain lenders (“Existing Lenders”) are party to the Existing Credit Agreement;

WHEREAS, Company, Collateral Agent and certain subsidiaries of Company party thereto (the “Subsidiary Guarantors”) are party to (a) the Amended and Restated First Lien Security Agreement dated as of June 15, 2005 (as amended, supplemented or otherwise modified through the date hereof, the “Security Agreement”), and (b) the Amended and Restated First Lien Subsidiary Guaranty dated as of June 15, 2005 (as amended, supplemented or otherwise modified through the date hereof, the “Subsidiary Guaranty” and, together with the Security Agreement and the other Collateral Documents, the “Existing Collateral Documents”); and

WHEREAS, upon the terms and subject to the conditions set forth herein, Company, Administrative Agent and certain lenders under the Existing Credit Agreement that comprise Requisite Lenders (as defined in the Existing Credit Agreement) under the Existing Credit Agreement wish to amend certain provisions of the Existing Credit Agreement, the Security Agreement and the Subsidiary Guaranty;

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

Section 1.    DEFINITIONS.

Capitalized terms used and not defined herein (including in the preliminary statements hereto) shall have the meanings assigned to such terms in the Existing Credit Agreement. The provisions set forth in subsection 1.3 of the Existing Credit Agreement are hereby incorporated by reference herein, mutatis mutandis. The term “Amendment Arranger” means Credit Suisse Securities (USA) LLC, in its capacity as sole lead arranger and bookrunner for this Amendment.

Section 2.    AMENDMENT OF THE EXISTING CREDIT AGREEMENT.

A.    Subsection 1.1 of the Existing Credit Agreement is hereby amended by inserting the following defined terms in the appropriate alphabetical order therein:

“Amendment No. 1” means Amendment No. 1, dated as of the Amendment No. 1 Effective Date, to this Agreement.

“Amendment No. 1 Effective Date” means June 6, 2013.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

“Excluded Swap Obligation” means, with respect to any Subsidiary Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the guarantee under the Subsidiary Guaranty of such Subsidiary Guarantor of, or the grant by such Subsidiary Guarantor of a Lien to secure, such Swap Obligation (or any guarantee thereof) is or

becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation thereof) by virtue of such Subsidiary Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee under the Subsidiary Guaranty of such Subsidiary Guarantor, or the grant by such Subsidiary Guarantor of a Lien, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or Lien is or becomes illegal.

“Loan Modification Agreement” means a Loan Modification Agreement in form and substance reasonably satisfactory to the Administrative Agent, Company and one or more Accepting Lenders.

“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Swap Obligations” means with respect to any Subsidiary Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

B.    Subsection 1.1 of the Existing Credit Agreement is hereby further amended by replacing the definitions of the following terms with the definitions that follow:

“Agreement” means this Fourth Amended and Restated Credit Agreement dated as of April 12, 2012, as amended by Amendment No. 1.

C.    Subsection 2.4(B)(v) of the Existing Credit Agreement is hereby amended by replacing the words “Fourth Restatement Effective Date” with the words “Amendment No. 1 Effective Date” in each place they appear in such subsection.

D.    The Existing Credit Agreement is hereby amended by inserting a new subsection 2.10 in the appropriate place as follows:

A. Company may, by written notice to Administrative Agent from time to time, make one or more offers (each, a “Loan Modification Offer”) to all the Revolver Lenders of one or more Classes (each Class subject to such a Loan Modification Offer, an “Affected Class”) to make one or more Permitted Amendments (as defined in subsection 2.10C below) pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable to Company. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the date on which such Permitted Amendment is requested to become effective (which shall not be less than 10 Business Days nor more than 30 Business Days after the date of such notice, unless otherwise agreed to by the

Administrative Agent). Permitted Amendments shall become effective only with respect to the Revolving Loans and Revolving Loan Commitments of the Revolving Lenders of the Affected Class that accept the applicable Loan Modification Offer (such Revolving Lenders, the “Accepting Lenders”) and, in the case of any Accepting Lender, only with respect to such Revolving Lender’s Revolving Loans and Revolving Loan Commitments of such Affected Class as to which such Revolving Lender’s acceptance has been made.

B. Company, each other Loan Party and each Accepting Lender shall execute and deliver to the Administrative Agent a Loan Modification Agreement and such other documentation as the Administrative Agent shall reasonably specify to evidence the acceptance of the Permitted Amendments and the terms and conditions thereof. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement. Each of the parties hereto hereby agrees that, upon the effectiveness of any Loan Modification Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Amendment evidenced thereby and only with respect to the applicable Revolving Loans and Revolving Loan Commitments of the Accepting Lenders of the Affected Class, including any amendments necessary to treat the applicable Revolving Loans and/or Revolving Loan Commitments of the Accepting Lenders as a new “Class” of loans and/or commitments hereunder. Notwithstanding the foregoing, no Permitted Amendment shall become effective under this subsection 2.10 unless the Administrative Agent, to the extent reasonably requested by the Administrative Agent, shall have received legal opinions, board resolutions, officer’s and secretary’s certificates and other documentation consistent with those delivered on the Effective Date under subsection 4.1 of this Agreement.

C. “Permitted Amendments” means any or all of the following: (i) an extension of the final maturity date applicable to the applicable Revolving Loans and/or Revolving Loan Commitments of the Accepting Lenders, (ii) a change in the Applicable Margin and/or fees payable with respect to the applicable Revolving Loans and Revolving Loan Commitments of the Accepting Lenders, (iii) the inclusion of additional fees to be payable to the Accepting Lenders and (iv) such amendments to this Agreement and the other Loan Documents as shall be appropriate, in the judgment of the Administrative Agent, to provide the rights and benefits of this Agreement and the other Loan Documents to each new “Class” of loans and/or commitments resulting therefrom; provided that (A) all borrowings under Revolving Loan Commitments and repayments thereunder shall be made on a pro rata basis (except for (x) payments of interest and fees at different rates on extended Revolving Loan Commitments (and related outstandings) and (y) repayments required upon the maturity date of any non-extending Revolving Loan Commitments), (B) the allocation of the participation exposure with respect to any then-existing or subsequently issued Letter of Credit as between the commitments of such new “Class” and the remaining Revolving Loan Commitments of the related Affected Class shall be made on a ratable basis as between the commitments of such new “Class” and the remaining Revolving Loan Commitments of the related Affected Class and (C) the expiration date with respect to Letters of Credit issued by any Issuing Bank may not be extended without the prior written consent of such Issuing Bank, and (v) such other amendments to this Agreement and the other Loan Documents as shall be necessary or appropriate, in the judgment of the Administrative Agent or as otherwise may be agreed upon by the parties to such Permitted Amendment, to obtain or give effect to the foregoing Permitted Amendments (it being agreed that the Administrative Agent shall be entitled to receive customary agency fees for acting in such capacity for any period after the latest Revolving Loan Commitment Termination Date in effect immediately prior to the effectiveness of any such Permitted Amendment (with Company and the Administrative Agent agreeing to negotiate in good faith the amount of such fees) and that no such Permitted Amendment may affect the rights or duties of, or any fees or other amounts payable to, the Administrative Agent without the prior written consent thereto of the Administrative Agent).

E.    Subsection 7.6B of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

 

Section 3.    AMENDMENT OF THE SECURITY AGREEMENT.

A.    The definition of “Secured Obligations” in Section 2 of the Security Agreement is hereby amended as follows:

(i)    by inserting the words “(other than any Excluded Swap Obligations)” immediately after the words “Secured Swap Agreement” in clause (a) thereof;

(ii)    by inserting the words “(other than any Excluded Swap Obligations)” immediately after the words “Secured Swap Agreements” in the paragraph beginning with the words “in each case together” in such section; and

(iii)    by appending the words “provided that Secured Obligations shall in no event include any Excluded Swap Obligations.” at the end of the paragraph beginning with the words “in each case together” in such section.

Section 4.    AMENDMENT OF THE SUBSIDIARY GUARANTY.

A.    Section 1(a) of the Subsidiary Guaranty is hereby amended as follows:

(i)    by inserting the words “(other than any Excluded Swap Obligations)” immediately after the words “Secured Swap Agreements” in each place they appear in the first paragraph of such section; and

(ii)    by appending the words “provided that Guarantied Obligations shall in no event include any Excluded Swap Obligations.” at the end of the first paragraph of such section.

B.    The Subsidiary Guaranty is hereby amended by inserting a new Section 19 as follows:

19. Keepwell. Each Qualified ECP Guarantor hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each

other Subsidiary Guarantor with respect to such Swap Obligations as may be needed by such other Subsidiary Guarantor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligations (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Section 19 voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 19 shall remain in full force and effect until the Guarantied Obligations have been indefeasibly paid and performed in full. Each Qualified ECP Guarantor intends this Section 19 to constitute, and this Section 19 shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each other Subsidiary Guarantor for all purposes of the Commodity Exchange Act.

Section 5.    REPRESENTATIONS AND WARRANTIES.

To induce the other parties hereto to enter into this Amendment, Company and each other Loan Party hereby represent and warrant to each other party hereto that the representations and warranties of Company and each other Loan Party contained in the Existing Credit Agreement and in any other Loan Documents are true, correct and complete in all material respects on and as of the Amendment No. 1 Effective Date (in each case, except to the extent that any representation and warranty specifically refers to an earlier date, in which case such representation and warranty is true, correct and complete in all material respects as of such earlier date; provided that, if a representation and warranty is qualified as to materiality, such representation and warranty is true, correct and complete in all respects on such respective dates).

Section 6.    EFFECTIVENESS; COUNTERPARTS.

A.    This Amendment shall become effective on and as of the date on which each of the following conditions precedent is satisfied (such date, the “Amendment No. 1 Effective Date”):

(i)    Amendment Arranger shall have received counterparts of this Amendment that, when taken together, bear the signatures of (a) Company, (b) Requisite Lenders, (c) Administrative Agent, (d) Collateral Agent, (e) Amendment Arranger and (f) each Subsidiary Guarantor.

(ii)    Amendment Arranger shall have received an Officer’s Certificate of Company, dated the Amendment No. 1 Effective Date certifying that:

(a)     the representations and warranties set forth in Section 5 hereof are accurate; and

(b)     no Potential Event of Default or Event of Default has occurred and is continuing or would occur after giving effect to the transactions contemplated by this Amendment.

(iii)    Administrative Agent shall have received payment from Company, in immediately available funds, for the account of each Lender that delivers an executed counterpart signature page to this Amendment at or prior to 12:00 p.m., New York City time, on June 4, 2013, an amendment fee equal to 0.25% of each such Lender’s Term Loans and Commitments in respect of Revolving Loans (whether used or unused) outstanding as of the Amendment No. 1 Effective Date.

(iv)    Administrative Agent and Amendment Arranger shall have received all other fees and other amounts due and payable to them in connection with this Amendment and invoiced before the Amendment No. 1 Effective Date, including reimbursement or payment of all out‑of‑pocket

expenses (including fees, disbursements and other charges of counsel) required to be reimbursed or paid by any Loan Party in connection with this Amendment.

B.    This Amendment may be executed in one or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single agreement. Delivery of an executed counterpart of a signature page of this Amendment by facsimile, PDF file or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 7.    EFFECT OF THIS AMENDMENT.

A.    None of this Amendment, the Existing Credit Agreement, or any other Loan Document shall release, limit or impair in any way the priority of any security interests and liens held by Administrative Agent and/or Collateral Agent for the benefit of all or any Lenders or other Secured Parties against any assets of Company or any of its Subsidiaries arising under the Existing Credit Agreement, the Existing Collateral Documents or any other Loan Document, in each case as such documents may be amended, modified or supplemented from time to time.

B.    Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of Lenders, Collateral Agent or Administrative Agent under the Existing Credit Agreement or any other Loan Document. Nothing herein shall be deemed to entitle Company or any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document in similar or different circumstances.

C.    This Amendment shall constitute a “Loan Document” for all purposes of the Existing Credit Agreement and the other Loan Documents.

Section 8.    INCORPORATION BY REFERENCE.

The provisions of subsections 10.2, 10.3, 10.15, 10.16, 10.17 and 10.18 of the Existing Credit Agreement pertaining to expenses, indemnity, applicable law construction, consent to jurisdiction and service of process, and waiver of jury trial are hereby incorporated by reference herein, mutatis mutandis.

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

By:        /s/ John Mitchell            

Name:    John Mitchell

Address:    27442 Portola Parkway, Suite 200

Foothill Ranch, CA 92610

By:    __/s/ John Mitchell___________________

Name:    John Mitchell

Address:    27442 Portola Parkway, Suite 200

Foothill Ranch, CA 92610